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Jefferies Financial: Mainland China's insurance industry second quarter performance exceeds expectations, raising the industry's full-year profit forecast by 9% to 23%.
Jefferies Financial released a report on September 5th, stating that the performance of the mainland insurance industry in the second quarter exceeded expectations, mainly due to good investment income, which greatly increased profitability. The bank has raised its full-year profit forecast for the industry by 9% to 23%. The low base in the second half of the year lays a solid foundation for further recovery in the industry. The bank believes that in the case of declining interest rates, the insurance industry will have a longer road to recovery in the second half of the year and beyond. The bank's preference order is PICC Group, China Pacific Insurance, Ping An Insurance, and China Life Insurance, respectively. Among them, the bank has raised the target price for China Life Insurance from HKD 12 to HKD 13, and the target price for New China Life Insurance from HKD 16.5.
Hong Kong stocks surged | The People's Insurance (01339) rose more than 3%, leading the mainland insurance companies. Citigroup said that the majority of insurance companies performed better than expected in the first half of the year.
Mainland insurance companies continued their recent upward trend. As of the time of writing, the People's Insurance (01339) rose 3.05%, to HKD 3.04; PICC P&C (02328) rose 2.93%, to HKD 10.54; China Pacific Insurance (02601) rose 2.23%, to HKD 20.65; Ping An Insurance (02318) rose 0.85%, to HKD 35.4.
Head insurance asset management profit remained stable with slight increase in the first half of the year, but the industry is generally concerned about increased pressure in the second half of the year. "Stocks and bonds both face challenges."
① According to multiple insiders in the insurance asset management industry, the investment performance of various institutions in the bond market improved in the first half of the year. However, the subsequent challenges of the stock and bond markets will test the investment capabilities of these institutions. ② Some industry experts pointed out that currently, it is difficult to invest in non-standard (products). The latest data shows that the business of innovative products in insurance asset management contracted in the first half of the year, and the issuance of non-standard bond rights is still in a downward trend.
The Best Brand List in China has been revealed: Ping An Insurance shows remarkable resilience and achieved the fourth best performance nationwide!
"China's brand explores new growth paths and grows resiliently across cycles." On September 3rd, Interbrand, a global brand strategy consulting and design company, released the "2024 China Best Brands Ranking", with Ping An Insurance ranking fourth among domestic brands. Ping An has long adhered to a customer-centric service philosophy, dedicated to providing comprehensive financial and medical retirement services that are worry-free, time-saving, and cost-saving, with a brand value of up to 168.121 billion yuan. The list states that in response to cyclical pressures, Chinese brands have taken four new paths of value growth: expansion outward, deepening downward, precision reach, and strengthening.
Citi generally raises target prices for mainland insurance companies, with most of them outperforming expectations in the first half of the year.
According to Citigroup's report, the performance of most life and property insurance companies in the first half of the year exceeded expectations. Due to product repricing, reduced bank commissions, increased attention to long-term products, and cost control, the gross margin of life insurance companies has returned to an expansion track, with new business value growing by 11% to 1.1 times annually. The balance of Contractual Service Margin (CSM) also increased by 1% to 3% annually. The bank also added that although the nationwide natural catastrophe (NAT CAT) risk losses have surged, the combined operating ratio (CoR) of the three major property insurance companies remained at a stable level in the first half of the year, with PICC (01339.HK) at 96.2.
Statistics of capital trend in the Shanghai-Hong Kong Stock Connect (T+2) on September 4th
Capital trend of Stock Connect on September 4th