Investment Rating - The report maintains a "BUY" rating for PICC P&C, indicating a potential return of over 15% over the next 12 months [16]. Core Insights - The full-year combined ratio (CoR) for FY24 was reported at 98.8%, which is a 1.0 percentage point increase year-on-year, primarily due to a rise in the loss ratio [1][8]. - The management provided an optimistic guidance for FY25, expecting the auto and non-auto CoR to be less than 96% and 99% respectively, which is an improvement compared to previous years [1][8]. - The net profit for FY24 is projected to be RMB 32.2 billion, reflecting a year-on-year increase of 30.9%, aligning with forecasts [1][2]. - The report revises the EPS forecasts for FY25-27 upwards by 6%, 11%, and 18% to RMB 1.58, 1.74, and 1.93 respectively, driven by improved CoR composition [1][9]. Financial Performance - Total insurance revenue for FY24 is expected to reach RMB 485.2 billion, marking a 6.1% year-on-year increase, with auto and non-auto insurance service revenue rising by 4.5% and 8.8% respectively [8]. - The underwriting profit is anticipated to drop by 44% year-on-year to RMB 5.7 billion, with a significant loss recorded in Q4 [1][8]. - The dividend per share (DPS) for FY24 is set at RMB 0.54, a 10.4% increase year-on-year, indicating a payout ratio of 37.3% [1][2]. Valuation Metrics - The target price for PICC P&C has been revised to HK14.00, representing a 9.9% upside from the current price of HK$14.38 [3][10]. - The stock is currently trading at a price-to-book (P/B) ratio of 1.09x for FY25E, with an average 3-year forward return on equity (ROE) estimated at 13.5% [10][12]. - The report highlights a dividend yield of 4.7% for FY25, increasing to 5.7% by FY27 [2][13].
中国财险：Optimized CoR guidance beat expectations-20250401