CPIC (2601 HK) Summary
Core Content and Key Highlights
CPIC (China Pacific Insurance) reported strong financial performance in FY24, with notable growth in key metrics such as Life OPAT, Net Profit, and DPS. The company beat expectations on Life OPAT and NBV, demonstrating its effective value growth and asset-liability management capabilities in a low interest rate environment.
- Life OPAT: Increased by 6.1% YoY to RMB 27.6bn, exceeding the forecast of +2%.
- Group OPAT: Rose by 2.5% YoY to RMB 34.4bn.
- Net Profit: Reached RMB 45.0bn, up 64.9% YoY, at the upper end of the profit alert range of 55%-70%.
- DPS: Grew by 6% YoY to RMB 1.08, implying a 30.2% payout ratio.
- NBV: Surged by 57.7% on a like-for-like basis to RMB 17.3bn, outperforming forecasts. The revision of EV assumptions (LT investment return and RDR) negatively impacted NBV by -23%, but the company still delivered strong results.
- P&C CoR: Increased to 98.6% YoY, driven by a higher loss ratio (+1.7pct) and lower expense ratio (-0.8pct), with Auto CoR deteriorating to 98.2% YoY.
- Investment Income: Total investment income rose 131% YoY to RMB 120.4bn, led by increased dividends and fair value gains from FVTPL.
Valuation and Forecast
- Target Price: HK$34.00, implying a 0.54x FY25E P/EV and 1.05x P/B.
- EPS Estimates: Revised to RMB 4.18/4.63/5.17 for FY25E-FY27E, with a downward adjustment of -3%/-1%/+0.9% respectively.
- ROE: Expected to be 13.4% in FY25E, with a 3yr forward ROE of 14%.
- Dividend Yield: Projected to rise to 5.0% in FY25E and 6.0% in FY27E.
Key Forecasts Table
| Metric |
FY25E (RMB bn) |
FY26E (RMB bn) |
FY27E (RMB bn) |
| EPS |
4.18 |
4.63 |
5.17 |
| Group NPAT |
40.2 |
44.5 |
49.7 |
| NBV |
14.8 |
16.5 |
18.5 |
| NBV Margin (FYP basis) |
17.3% |
17.8% |
18.2% |
| EV |
608.1 |
659.2 |
714.3 |
| ROE |
13.4% |
14.1% |
14.9% |
| P&C CoR |
98.5% |
98.5% |
98.4% |
Shareholding and Performance
- Shareholding Structure:
- Shanghai International Group: 7.2%
- BlackRock, Inc.: 6.1%
- Share Performance:
- 1-month: +7.8%
- 3-month: +0.4%
- 6-month: -7.6%
Financial Summary
Income Statement Highlights
| Metric |
FY22A (RMB mn) |
FY23A (RMB mn) |
FY24A (RMB mn) |
FY25E (RMB mn) |
| Net Profit |
38,222 |
27,911 |
46,441 |
41,532 |
| Insurance Service Results |
32,939 |
33,705 |
34,901 |
35,692 |
| Net Investment Income |
20,106 |
8,445 |
30,736 |
26,045 |
Balance Sheet Highlights
| Metric |
FY22A (RMB mn) |
FY23A (RMB mn) |
FY24A (RMB mn) |
FY25E (RMB mn) |
| Total Assets |
2,071,336 |
2,343,962 |
2,834,907 |
3,331,146 |
| Total Liabilities |
1,869,664 |
2,076,258 |
2,516,426 |
2,994,777 |
| Total Shareholders' Equity |
201,672 |
267,704 |
318,481 |
336,369 |
Per Share Data
| Metric |
FY22A |
FY23A |
FY24A |
FY25E |
FY26E |
FY27E |
| DPS |
1.02 |
1.02 |
1.08 |
1.13 |
1.25 |
1.37 |
| EPS (Reported) |
2.56 |
2.83 |
4.67 |
4.18 |
4.63 |
5.17 |
| ROE |
12.6% |
12.2% |
16.6% |
13.4% |
14.1% |
14.9% |
Valuation Metrics
- P/Embedded Value (x): 0.4 (FY25E)
- P/B (x): 0.7 (FY25E)
- P/EV (x): 0.54 (FY25E)
- Dividend Yield (%): 5.0% (FY25E)
Key Risks
- Prolonged low interest rate environment
- Intensified equity market fluctuations
- Lower-than-expected new business sales
- P&C CoR worse than expectations
Analyst Recommendations
- Rating: BUY (Maintain)
- Target Price: HK$34.00
- Upside: 37.1% from current price of HK$24.80
Disclaimer and Disclosures
- The report is prepared for informational purposes only and not for individual investment advice.
- Information is subject to change without notice.
- CMBIGM is not a registered broker-dealer in the U.S. and is not subject to U.S. rules on research reports.
- The report may be distributed only to certain investors in the U.S., Singapore, and the U.K. as specified.
