20260429-招银国际-中国平安-601318.SH-1Q_OPAT_a_slight_beat_positive_outlook_for_full-year_NBV_and_life_OPAT_acceleration_5页_885kb

Ping An Summary

Core Content

Ping An (2318 HK/601318 CH) reported solid first-quarter (1Q) results, with Group Operating Profit After Tax (OPAT) exceeding expectations, growing by 7.6% YoY to RMB40.8bn. The company is expected to maintain a positive outlook for full-year Net Business Value (NBV) and Life OPAT growth acceleration in 2026E.

Main Points

1. Group OPAT Performance

• Group OPAT: Increased by 7.6% YoY to RMB40.8bn, slightly beating the estimate of RMB39.2bn.
• Drivers:
  • Life & Health (L&H) OPAT: Rose by 4.6%, aligning with forecasts.
  • Ping An Bank (PAB): Profit increased by 3.0%.
  • Asset Management (AM): OPAT surged by 193.3%, driven by enhanced brokerage and asset management activities amidst equity market volatility.

2. Net Profit After Tax (NPAT)

• Group NPAT: Declined by 7.4% YoY to RMB25bn, slightly better than the estimate of RMB24.3bn, due to heightened market headwinds.

3. Net Asset Value (NAV)

• Group NAV: Grew by 1.8% YoY to RMB1.02tn, in line with forecasts.

4. Life NBV

• Life NBV: Increased by 20.8% YoY to RMB15.6bn, driven by strong new business sales (+45.5% YoY) despite a margin contraction of 4.8pct YoY to 23.5%.

5. P&C Underwriting

• Combined Ratio (COR): Improved by 0.8pct YoY to 95.8%, surpassing the estimate of 96.1%.
• Non-auto Premium: Rose by 19.5% YoY to RMB38bn, outperforming the industry average of 5.3% YoY growth.
• P&C OPAT: Declined by 13.4% YoY to RMB3.5bn due to lower investment returns, despite strong underwriting performance.

6. Valuation and Investment Thesis

• Price Target (TP):
  • H-share: HK$86, implying 0.83x FY26E P/EV and 1.2x P/B.
  • A-share: RMB75, implying the same valuation multiples.
• Current Valuation:
  • Trading at 0.6x FY26E P/EV and 0.8x P/B.
• Investment Thesis:
  • Life OPAT Acceleration: Expected as CSM approaches an inflection point.
  • PAB Profit Enhancement: Stabilized NIM and non-interest income growth.
  • AM Derisking Progress: Continued easing of AM drag, leading to valuation re-rating.
  • Technology and Healthcare Ecosystem: Advanced deployment and innovation in these areas.
  • Shareholder Returns: Management's focus on dividend growth and capital efficiency.

Key Information

1. Earnings Summary

• EPS (Reported): RMB7.16 (FY24A), RMB7.68 (FY25A), RMB8.20 (FY26E), RMB8.72 (FY27E), RMB9.44 (FY28E).
• Consensus EPS: RMB8.03 (FY26E), RMB8.53 (FY27E), RMB8.94 (FY28E).
• P/B (x): 1.1 (FY23A), 1.0 (FY24A), 1.0 (FY25A), 0.8 (FY26E), 0.8 (FY27E), 0.7 (FY28E).
• P/Embedded Value (x): 0.7 (FY23A), 0.6 (FY24A), 0.6 (FY25A), 0.6 (FY26E), 0.6 (FY27E), 0.5 (FY28E).
• Dividend Yield (%): 4.7 (FY23A), 4.9 (FY24A), 5.3 (FY25A), 5.5 (FY26E), 5.8 (FY27E), 6.2 (FY28E).

2. Stock Performance

• H-share (2318 HK): Current price HK$60.1, with a price target of HK$86.
• A-share (601318 CH): Current price RMB57.6, with a price target of RMB75.
• Performance:
  • 1-mth: H-share: +1.3%, A-share: +1.2%.
  • 3-mth: H-share: -15.4%, A-share: -11.0%.
  • 6-mth: H-share: +6.9%, A-share: -0.2%.

3. Financial Highlights

• Total Investment Assets: Remained stable at ~RMB6.55tn, up 0.9% YoY.
• Non-controlling Interests: Increased to RMB450.465bn in FY26E.
• Total Shareholders' Equity: RMB1.140997tn in FY26E.
• Dividend Payout Ratio (%): 35.6% (FY26E), expected to decline slightly over time.

Key Risks

• Regulatory Tightening: On life insurance and financial conglomerates.
• Equity Market Volatility: Could affect investment returns.
• Low-Interest Rate Environment: May pressure investment income.
• Pricing Competition in P&C: May impact profitability.
• Asset Quality Deterioration: Risk to financial stability.
• Capital Decline: May weigh on dividend growth and overall performance.

Catalysts

• Life CSM Release: Expected to drive NBV growth in 2026E.
• AM Derisking: Continued progress expected to enhance profitability.
• Improved OPAT Payout Ratio: Could support valuation re-rating.
• Equity Market Rallies: May improve investment returns.
• New Protection Products: Such as participating critical illness policies.

Company Overview

• Founded in 1988, Ping An is a leading financial conglomerate with businesses in life and P&C insurance, banking, brokerage, trust, and other financial services.
• Technology-Driven Strategy: Focus on digital transformation and innovation.
• Key Subsidiaries:
  • Ping An Bank (PAB): A major subsidiary with a 58% Group stake.
  • Ping An Healthcare and Technology (1833 HK): A listed internet-health company with a 53% Group stake.

Conclusion

Ping An is positioned for continued growth and valuation improvement, driven by its core business performance, ongoing de-risking efforts, and strategic focus on technology and healthcare. The company's financial strength and shareholder returns are key factors in its investment appeal. The stock is currently undervalued, with a strong price target based on SOTP valuation and positive growth expectations for 2026E.