Ping An of China is one of the comprehensive financial groups with the most complete domestic financial licenses and the widest range of business. The company was founded in 1988 and is the first domestic joint stock insurance company. Since its establishment, the company has gradually expanded its business into the fields of industrial insurance, life insurance, securities, trusts, banking, asset management, technology and healthcare, forming a comprehensive business structure with “comprehensive finance+medical care+technological innovation”.

By the end of the third quarter of 2024, the company achieved operating income of 775.38 billion yuan, an increase of 9.99% year on year; achieved net profit of 119.18 billion yuan, an increase of 36.09% year on year. Both revenue and net profit to mother ranked first among listed insurers, and its comprehensive strength was strong.

Ping An Life Insurance: Brand advantages and channel construction consolidate the company's wealth management advantages. By building an integrated comprehensive financial ecosystem, the company is deeply involved in the supply of value-based insurance products, and the company's brand and value effects are highlighted. In terms of agent channels, promote the positive circular development of agent channels with high quality, efficiency, and high retention. The average monthly income of 2024H1 Ping An Group agents is 1,162 yuan, and the average monthly income of life insurance agents is 9,608 yuan, all about double that of 2021. In terms of banking insurance channels, the exclusive agency relationship between Ping An Life Insurance and Ping An Bank allows insurance profits to stay more within the group. The bank's large retail customer base and wide range of outlets provide strong support for Ping An product sales.

Ping An Financial Insurance: Technology helps build a “moat”. As one of the “old three” companies in China's property insurance industry, Ping An Insurance's business scale and market share rank among the top two in the industry. Over the years, the company has relied on its competitive advantage and scale effect to achieve a good business growth rate. The average growth rate of the financial insurance business in the past five years was 5.3%. Ping An Industrial Insurance is deeply involved in technological and systematic construction, and has formed a digital operation platform with the “Ping An Good Car Owner” app as the core, empowering multiple business links such as underwriting, service, and claims, and creating the company's differentiated competitive advantage.

Investment business: The allocation is steady and balanced, and the real estate investment strategy is shifting to property investment. The scale of the company's investment assets has maintained a steady growth trend, and the investment structure is stable. As of June 30, 2024, the size of the insurance fund portfolio exceeded 5.2 trillion yuan, an increase of 10.2% over the beginning of the year. The share of Ping An Real Estate's investment in investment assets is declining, and the company continues to strengthen real estate investment risk management and control. Over the past few years, the company has continued to strengthen the level of risk management and control for real estate investment, and the scale and share of real estate investment have shown a downward trend. Combined with the adjustment of the company's investment strategy in the corresponding field, the overall risk level is manageable.

Profit forecasting and valuation: Ping An of China adheres to the strategic layout of “comprehensive finance+medical care” and continues to promote resilience in debt-side business development. We expect the company's EPS from 2024 to 2026 to be 5.98/6.55/7.54 yuan/share. The current stock price is 0.63/0.59.0.54 times the company's P/EV, and the corresponding target price is 69.99 to 75.68 yuan/share. Currently, there is still room for 23% to 33% to rise, giving the first coverage a “superior to the market” rating.

Risk warning: profit forecasting and valuation risk; increased market competition; risk of declining interest rates; continued fluctuation in investment returns; risk of rising debt-side costs due to channel fees; stricter regulations, etc.