2024H1 net profit to mother +15.4% YoY to HK$6.027 billion. 1) Life Insurance: 2024H1 achieved an NBV of 7.335 billion HKD, +85.5% YoY, with NBV +59.8% YoY and Banking Insurance NBV +303.7% YoY. 2) Industrial insurance. 2024H1 achieved insurance service performance of HK$0.5 billion, +27.6% year over year, and a comprehensive cost ratio of 97.0%, -0.6 pct year over year. 3) On the investment side, investment assets increased 9.4% to HK$1476.4 billion at the end of 2023, total investment income +57.1% to HK$37.242 billion, and the annualized total return on investment was +1.38 pct to 5.27% year over year.

Life insurance: 1) New policy premiums: 2024H1 achieved a new policy premium of HK$28.53 billion, or -8.8%, of which the premium for the new policy was HK$19.07 billion, 7.3% year over year, and 94.6, or -30.0%; the first-year premium for individual long-term insurance was HK$14.95 billion, +11.7%. 2) NBV: 2024H1 achieved an NBV of 7.335 billion HK$7.335 billion, of which the NBV was HK$5.239 billion, +59.8% YoY, and the Bank Insurance NBV was HK$1.873 billion, +303.7% YoY; the overall NBVM for life insurance was 24.6%, +12.4pct compared to the same period last year, of which NBVM was 27.5%, +8.9pct YoY, and +16.4 pct PCT, we expect that the significant increase in banking insurance NBVM will mainly benefit from the implementation of “integrated reporting and banking”, which has reduced handling fees and commission rates.

Industrial insurance: 2024H1 achieved insurance service performance of HK$0.5 billion, +27.6% year over year, and a comprehensive cost ratio of 97.0%, -0.6 pct year over year. 1) Domestic production insurance business: 2024H1 achieved the original premium of HK$18.753 billion, of which the vehicle insurance premium was HK$10.39 billion, +0.9% YoY, the water insurance premium was HK$0.426 billion, +17.9% YoY, and the non-water insurance premium was HK$7.93 billion, +2.2% YoY. 2) Overseas industrial insurance business: The 2024H1 overseas industrial insurance business achieved the original premium of HK$3.02 billion, +8.7% over the same period last year. The comprehensive cost rates for Taiping Hong Kong/Taiping Macao/Taiping Singapore/Taiping Indonesia were 92.1%/80.6%/46.9%/85.6%/88.5%, respectively, +0.4pct/ +12.4pct/ -46.6pct/ -6.4pct/+6.9pct.

Investment side: Taiping Investment's assets increased 9.4% to HK$1476.4 billion at the end of 2023, with total return on investment +57.1% to HK$37.242 billion, and the annualized total return on investment was +1.38 pct to 5.27% year over year. We estimate that the impressive performance of the investment side was mainly due to the company seizing structural market opportunities in the first half of 2024. Among them, the high dividend strategy performed well, driving the comprehensive return on investment to outperform the Shanghai and Shenzhen 300 full income index.

Investment advice: The value of the company's new business has surged, and the life insurance business has performed well; the COR for industrial insurance has declined slightly, and the overall performance is improving. In the second half of the year, the company will continue to adhere to the general requirements of “five focuses” and actively promote the Group's high-quality transformation around “transforming methods, restructuring, improving quality, and increasing efficiency”. We are optimistic about the company's long-term development potential. Considering significant improvements on the company's debt side and investment side, we adjusted 24-26 net profit to HK$6.929/8.149/8.442 billion, respectively, or +11.9%/17.6%/3.6% year-on-year. Currently, the company's PEV is 0.15X, which is in a historically low ranking, maintaining a “buy” rating.

Risk warning: New order sales fall short of expectations; company claims and expenses fall short of expectations; equity markets fluctuate greatly.