The company disclosed the 2024 interim report, achieving net profit of 6.027 billion HKD, +15.4% year on year; life insurance NBV 6.694 billion yuan, with no restated base +83.6% year over year, +108.3% year over year under comparable caliber; and total annualized return on investment of 5.27%, +1.38pt year over year.

The growth rate of life insurance NBV has exceeded expectations, and the ability of banking insurance to create value has improved markedly. 1) The 2024H1 company achieved a life insurance NBV of 6.694 billion yuan, with no restated base of +83.6%, and a year-on-year ratio of +108.3% after the restatement. It is expected to have the best performance among listed insurers and is expected to significantly lead the industry throughout the year; NBV Margin was 24.6%, +12.4pt year over year, mainly due to the combined effects of banking insurance integration, product structure optimization, and reduction of predetermined interest rates; 2) Looking at each channel, the first-year premium payment rate for each long-term insurance policy was +11.7%, and the NBV compared to +9.5. NBV Margin +8.9pt to 27.5% year over year; Bank Insurance long-term insurance premiums were -30.4% YoY, NBV +303.7% YoY, and NBV Margin +16.4pt to 20.0% yoy. 3) The number of agents is 0.228 million, a net decrease of 0.007 million from the beginning of the year. The scale of manpower has basically stabilized and is expected to pick up during the year; monthly per capita premium payment was 23,415 yuan, +62.5% from the beginning of the year, and the team quality improved markedly. 4) The monthly continuation rates of personal insurance and banking insurance were 98.8% and 98.6%, respectively, and the monthly continuation rates were 95.1% and 97.8% respectively, maintaining the industry-leading level of excellence. 5) Life insurance EV 243.5 billion yuan, +9.5% compared to the beginning of the year; contract service margin was 195.9 billion yuan, +2.8% compared to the beginning of the year.

Financial insurance and reinsurance benefits continue to improve. 1) 2024H1's domestic financial insurance achieved insurance service revenue of HK$16.663 billion, +3.5% year over year. Among them, auto insurance and non-car insurance premiums accounted for 55.4% and 44.6% respectively, and the business structure continued to be optimized; the comprehensive cost ratio was 97.0%, -0.6pt year on year. 2) Reinsurance achieved insurance service revenue of HK$4.333 billion, of which life insurance and non-life insurance premiums accounted for 24.7% and 75.3% respectively; the comprehensive cost ratio was 96.7%, -9.1 pt year on year.

Equity investment outperformed the market by a large margin. The Group's investment assets at the end of the second quarter were HK$1476.4 billion, +9.4% from the beginning of the year; the OCI stock size was HK$37.3 billion, a net increase of 14.9 billion from the beginning of the year. The high dividend strategy types held performed well, driving the overall comprehensive return on stock investment to 15.6%, and the annualized total return on investment was +1.38pt to 5.27% year on year; however, against the backdrop of low interest rate levels, the company's annualized net return on investment was -0.16pt to 3.47% year-on-year. It benefited from the bond bull market +2.62 pt to 5.58% year over year. In addition, the company invested about HK$18.4 billion in real estate debt financial products, accounting for 1.1% of total assets, a decrease of 0.3 pt from the end of last year, and the solvency of the financiers was strong.

Net profit continued to grow by double digits. 2024H1 achieved net profit of HK$6.027 billion, or +15.4% year over year; of these, insurance service performance was +38.0% year over year, net investment performance +360.7% year over year, and profit before tax was +110.7% year over year, but tax expenses increased significantly by HK$7.227 billion year over year. The net operating profit growth rate for each business segment was life insurance +4.9%, domestic financial insurance +100.3%, overseas financial insurance +74.5%, asset management +183.3%, reinsurance turned loss into profit, and other business losses of HK$0.305 billion, respectively.

Maintain a “Highly Recommended” investment rating. The company continued its strong performance in the interim report, with significant improvements in return on investment, and the historical risks on the asset side were gradually cleared; the debt-side NBV growth rate greatly exceeded expectations, and it is expected to maintain its leading edge throughout the year. Currently, the company's stock price is only 0.11 times the 2024 PEV. It is expected that there will be plenty of room for further growth. The undervalued low position contrasts strongly with the high fundamentals, and continues to maintain “highly recommended”.

Risk warning: Life insurance development is struggling, product attractiveness is declining, team transformation is lower than expected, economic growth is weak, regulations are tight, stock market is sluggish, and interest rates are declining.