Ping An recorded robust 3Q earnings with Group net profit and L&H NBV doubled in third quarter. Group OPAT attributable to shareholders grew 5.5% YoY to RMB 113.8bn, translating into a 22.1% YoY increase in 3Q24 on track for a steady recovery (1Q24: -3.0%/2Q24: +1.9% YoY). L&H and P&C accelerated attributable OPAT growth to 8%/455% YoY in 3Q, driven in part by more promising investment results and improved underwriting structure. Group attributable NPAT rose 36.1% YoY in 9M24, implying a surge of 1.51x YoY in 3Q24. L&H NBV rose 34.1% YoY to RMB35.2bn, more than doubled in 3Q24, thanks to excessive margin expansion.

Entering into 4Q24, as business shows more clarity, we expect Ping An could grow its NBV over 20% in FY24E, and is likely to sustain this momentum into 1Q25, as mgmt. guided on the call that “the channels are prepared for the jumpstart in FY25 as well as exerting effort to close the book this year with a perfect end”. With rebounded investment income and a low base in 4Q23, we believe a better-than- expected 2H24 earnings is attainable. Given that, we revise up the FY24-FY26E EPS forecast by 14%/7%/3% to RMB 7.44/7.57/7.90 (table), underpinned by a clearer outlook for both solid insurance and investment results. Maintain BUY, we

revise up our price target based on SOTP (table) to HK$65.1, implying 1.09x FY24E P/B and 0.73x FY24E P/EV. n 3Q NBV more than doubled; number of life sales agents stabilized. Ping An

L&H achieved a 34.1% YoY rise in NBV to RMB35.2bn in 9M24, implying more- than-doubled growth by 110.2% YoY to RMB12.8bn in 3Q. All channels contributed to NBV rise, of which agency NBV was up 31.6% YoY to RMB28.6bn in 9M24, composing >80% of total NBV. We estimate it almost doubled (+95% YoY) in 3Q24. Bancassurance NBV surged 68.5% YoY primarily driven by margin expansions with a product mix shifting to par product sales since Sep.

NBV from community finance jumped 300% YoY thanks to a better 13-month persistency ratio (+6.6pct). NBV margin rose to 25.4%, up 7.3pct like-for-like, and in 3Q, we reckon it increased to 27.7% (CMBI estimate), +1.2pct from 2Q24.

We attribute this to 1) lower pricing interest rates in Sep and Oct opened up space for margin increase; and 2) a product mix shifting to par product sales.

Agency force stabilized in 3Q24 to 362k, +4.3% from year start /+6.5% QoQ.

This was in line with our previous projection that the top life insurers’ agency scale could stabilize by end-FY24 and/or in 1H25. We project Ping An L&H to

achieve FY24 NBV growth by 23% YoY with a FYP margin at ~26%. n P&C highlight on OPAT growth w/ an optimized CoR. Ping An P&C’s OPAT

surged 4.55x YoY to RMB4.0bn in 3Q24. Combined ratio (CoR) was down 1.5pct to 97.8% in 9M24, given better risk screening and contracted business of high net loss, i.e. guarantee insurance. Driven by increased insurance revenue (+4.5%) and narrowed CoR (-1.5pct), the UW profit in 9M24 was at RMB5.4bn, +2.28x YoY on a low base last year. Auto CoR deteriorated by 0.8pct to 98.2% due to higher cost of debt from a lower RDR under IFRS17 and elevated NAT CAT claims in 3Q24. Looking ahead, we expect that as the impact of guarantee insurance fades, non-auto CoR could further drop to compensate for the rising claims from auto. We project FY24 CoR to land at 98.3% by year end.

Expect valuation upside. The stock is trading at 0.54x FY24 P/EV and 0.81x FY24 P/B, +0.6/+0.2SD above 3-yr historical avg., ranking top among H-share listed Chinese insurers (now at 0.2x-0.6x FY24 P/EV and 0.5x-1.0x FY24 P/B).

We see limited downside given the fundamentals turnaround could support a valuation rebound. Looking ahead, we envisage Ping An to benefit from a more certain outlook for sustainable profitability, as 4Q23 was a low base of net loss.

Alongside balanced asset allocation and improved liability structure supported by product mix and a Group-wide customer base, we think Ping An is likely to extend its steady growth in NBV and profitability into 4Q24. We revise up our

FY24-26 earnings forecast by 14%/7%/3% to RMB 7.44/7.57/7.90. Maintain BUY and raise TP to HK$65.1, implying FY24E 1.09x P/B and 0.73x P/EV.