Investment-driven performance was outstanding. In the first three quarters, the company achieved net profit of 38.31 billion yuan to mother, yoy +65.5%, exceeding our expectations. Among them, benefiting from the rapid recovery of the capital market and low base (3Q23 net profit to mother yoy -54.3%), 3q24's net profit to mother YOY +173.6% increased to 13.178 billion yuan.

NBV surpassed expectations. 1-3Q24's NBV yoy +37.9% (same period last year was not restated) to 14.238 billion yuan, exceeding our expectations (we expect NBV yoy +33.5%), and the year-on-year increase was a further 15.1pct higher than 1H24. Among them, 3Q24NBV yoy +75.3% to 5.201 billion yuan, showing strong growth. The premium for new orders in the first three quarters was -5.0% yoy to 70.671 billion yuan, and the year-on-year decline was 6.7pct narrower than 1H24; among them, the Q3 quarter YOY was +14.8% to 21.651 billion yuan for new orders. NBVM yoy+6.2pct to 20.1% in the first three quarters, a further increase of 1.4 pct compared to 1H24. It is expected to mainly benefit from “integration of reporting and banking”, product structure and channel structure optimization. Looking at the segmented channels:

Individual insurance performance was outstanding, and manpower indicators continued to improve: 1-3Q24/3Q24, 24 new insurance channel YOY +16.3%/+36.6% to 33.832/9.312 billion yuan, mainly benefiting from the dual effects of the pre-release of customer demand brought about by falling predetermined interest rates and the decline in the year-on-year base. The average monthly core workforce of the company in the first three quarters was +2.4% to 0.058 million people, and the monthly core workforce was +15.0% to 0.061 million yuan per month. The entrance for additional staff was improved, and the number of new recruits/monthly FYP yoy per person was +15.5%/+35.0%.

Bank Insurance 3Q24 achieved a positive year-on-year increase in new orders: 1-3Q24/3Q24 Bank Insurance channel new orders yoy -18.4%/+7.5% to 24.015/10.035 billion yuan. After entering Q3, the year-on-year base declined significantly, compounded by gradual adaptation to the new business model under the “integration of reporting and banking”, and achieved a positive year-on-year increase in new channel orders in a single quarter. The business structure improved. In the first three quarters, personal long-term insurance periods and new YOY orders increased by 23.2% to 10.202 billion yuan.

Financial insurance COR was slightly higher than expected and is expected to be mainly affected by the disaster. 1-3Q24 financial insurance service revenue yoy +4.1% to 145.202 billion yuan, auto insurance/non-car insurance premiums yoy +3.3%/+12.2%; the comprehensive cost ratio was 98.7%, the same year-on-year, higher than our expectations (we expect yoy-0.91pct to 97.8%), which is expected to be mainly affected by the increase in compensation rates due to the Q3 disaster.

The investment performance was impressive, and the scale of OCI's equity increased sequentially. By the end of September, the Group's investment assets reached 2.58 trillion yuan, a sharp increase of 14.9% over the end of the previous year; benefiting from the rapid rebound in the Q3 stock market, the company achieved a net/total return on investment (unannualized) of 2.9%/4.7% in the first three quarters, -0.1 pct/+2.3 pct year-on-year. By the end of September, the company's financial assets classified as AC/FVOCI/FVTPL (balance sheet caliber) accounted for 2.9%/68.0%/29.1%, respectively, and -0.2pct/+0.8pct/-0.6pct month-on-month; of these, FVOCI equity was 126.832 billion yuan, an increase of 5.467 billion yuan over the previous month.

Investment analysis opinion: Maintain a “buy” rating and maintain profit forecasts. China's Taibao has a clear operating alpha core target within the insurance sector, and its downward advantage in “promoting development” policies is expected to be further highlighted. As of October 30, the company's stock price corresponding to PEV (24E) was 0.46x, maintaining a “buy” rating.

Risk warning: The impact of regulatory policies exceeds expectations, long-term interest rates continue to decline, equity markets fluctuate greatly, and disasters are frequent.