Cathay Securities and Haitong Securities: Maintain "Buy" rating for PICC P&C with a target price of HKD 22.82

According to the Zhitong Finance APP, Guotai Junan released a research report stating that it maintains a "Buy" rating for PICC P&C (02328), giving a target price of HKD 22.82 with a P/B of 1.6 times for 2025. The company's net profit for the first three quarters of 2025 is expected to increase by 50.5% year-on-year, driven by improvements in underwriting profitability and investment service performance, with underwriting profit at CNY 14.865 billion, up 130.7% year-on-year; total investment income at CNY 35.9 billion, up 33.0% year-on-year. As of Q3 2025, the net assets attributable to shareholders increased by 12.3% compared to the beginning of the year, showing steady growth. The EPS forecast for 2025-2027 is maintained at CNY 2.14/2.40/2.55, with optimism about the resonance of assets and liabilities driving steady profit growth for the company.

The report states that in the first three quarters of 2025, the company's property insurance premium income increased by 3.5% year-on-year, with auto insurance premium income up 3.1% year-on-year, mainly benefiting from steady growth in the number of vehicles and a stabilization and recovery in average premiums; non-auto insurance premium income increased by 3.8% year-on-year, mainly driven by growth in health insurance. The COR for the first three quarters of 2025 improved by 2.1 percentage points to 96.1%, benefiting from reduced catastrophe claims and strengthened cost control; it is estimated that the Q3 single-quarter COR is 99.1% (compared to underwriting losses in the same period). By insurance type, the auto insurance COR is 94.8% (down 2.0 percentage points year-on-year), and the non-auto insurance COR is 98.0% (down 2.5 percentage points year-on-year). The firm is optimistic about the company's continued effectiveness in reducing claims and controlling costs, aiming to achieve an underwriting profit target of a COR of 96% or less for auto insurance and 99% or less for non-auto insurance in 2025.

The firm pointed out that thanks to the rise in the capital market in the first three quarters of 2025 and the optimization of the company's allocation structure, with a moderate increase in high-quality equity assets, the company achieved an annualized total investment return of 5.4% in the first three quarters of 2025, an increase of 0.8 percentage points year-on-year. The unexpected recovery in the equity market and significant improvement in expense ratios serve as catalysts for the stock price