UBS has released a research report stating that Ping An Insurance (Group) Company Of China, Ltd. (SEHK: 02318) revealed at its Financial Enterprise Day that it targets mid-to-long-term double-digit growth in total value of new business (VNB), and the bank maintains its "Buy" rating on the H-shares with a target price of HK$82.
The bank estimates that operating profit will grow 10% year-on-year in 2026, implying a 22% year-on-year increase in the fourth quarter.
The report notes that the company's sales timetable for the "good start" campaign remains largely unchanged, with the main products being participating annuities and whole life insurance, which can be supplemented with critical illness riders; the company aims to lengthen the payment period, which is favorable for profit margins and cash flow stability.
The bancassurance channel may recover in the first half of 2027, though it still faces challenges such as a high base in the first quarter and Document No. 65; currently, non-Ping An-affiliated banks account for about 60% of bancassurance VNB, and their share is expected to rise further in 2027.
On the agent front, the company expects its agent workforce to remain broadly stable at around 300,000, and aims to improve quality through high-caliber recruitment and training, while also seeking to increase the proportion of younger customers to capture lifetime value.
The bank expects the company's operating profit (OPAT) to grow steadily, supported by a recovery in the contractual service margin (CSM), fading headwinds in the asset management segment, and business diversification; even if interest rates remain low for an extended period, CSM recovery can still be underpinned by the accumulation of new business and management measures such as improved renewal rates.
The bank notes that the company currently has no external financing plans, prioritizes shareholder returns through dividends over buybacks, and that long-term dividends per share should grow in line with the group's operating profit.
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