Huachuang Securities: Net profit of China Taiping (00966) surged 90.3% year-on-year in the first half of the year, maintaining the “recommended” rating target price of HK$26.7

The Zhitong Finance App learned that according to a research report released by China Taiping (00966), the 2026 interim results showed that the Group's net profit to mother increased 90.3% year-on-year to HK$12.873 billion, and net assets to mother increased 8.9% from the end of the previous year to HK$103,638 billion. The overall performance was impressive. The bank maintained a “recommended” rating for the company and awarded 0.4x PEV in 2026, corresponding to a target price of HK$26.7.

Huachuang Securities believes that the company's asset side benefited from equity market conditions, and that the debt side seized the growth opportunities of the banking insurance channel to achieve rapid growth in new orders, and that a two-pronged approach promoted impressive performance growth in the first half of the year. As dividend insurance transformation continues to advance and investment-side flexibility is gradually released, the company's valuation repair has solid support.

The Huacheng Securities report mentioned that the increase in new orders in the life insurance business cushions the pressure on the value ratio of dividend insurance transformation. In the first half of 2026, the company's new life insurance business value (NBV) increased 1.4% year-on-year to $6.268 billion. Among them, the insurance and banking insurance channels increased 9.4% and 17.5%, respectively. The total premiums for new long-term insurance policies of the three channels increased 11.2% year on year, hedging the decline in NBV profit margins to a certain extent. Huachuang Securities predicts that the decline in value ratio is mainly affected by the transformation of dividend insurance. During the reporting period, dividend insurance accounted for 97.8% of first-year long-term insurance premiums, an increase of 10.7 percentage points over the previous year, and debt-side transformation continued to deepen.

Financial insurance premiums have increased steadily, and COR has risen slightly due to the market environment. The original premiums for financial insurance increased 1.4% year on year in the first half of the year, and the comprehensive cost ratio (COR) rose 1.3 percentage points year on year to 98%. It is expected to be mainly affected by cost side factors, and overall underwriting profits will remain. Looking at the subregions, domestic financial insurance division premiums increased 5.9% year on year. Auto insurance and non-car insurance, which are the main players, increased 4.7% and 6.1% year on year respectively; overseas market performance was divided, and Taiping Hong Kong and Taiping Singapore COR were optimized.

Investment income increased significantly, and the share of fund allocations continued to rise. By the end of the first half of 2026, the Group's investment assets reached HK$194.1.5 billion, an increase of 11.4% over the end of the previous year. The decline in the interest rate center still suppresses the return on net investment, but equity assets contributed to good excess returns. The return on investment of the Group's FVTPL secondary equity assets reached 14.5% in the first half of the year. The Group's net/total return on investment (annualized) during the period was 2.85% and 5.21%, respectively, with year-on-year changes of -0.26 and +2.53 percentage points, respectively; the comprehensive return on investment (unannualized) was 2.98%, up 1.12 percentage points year-on-year. In terms of allocation structure, bonds accounted for 73.7%, down 2.4 percentage points from the end of the previous year; stocks and funds accounted for 18.1%, up 1.5 percentage points from the end of the previous year. The increase was mainly due to the increase in fund share.