HK Stock Market Move | "Domestic insurance stocks collectively rise, net profit of the top three listed insurance companies in the first three quarters increase significantly, and the sector's valuation center is expected to rise."

The domestic insurance stocks collectively rose, as of the time of this article, Ping An Insurance (02318) rose by 4.11% to HKD 50.65, New China Life Insurance (01336) rose by 3.69% to HKD 28.1, China Life Insurance (02628) rose by 3.66% to HKD 17, and CHINA TAIPING (00966) rose by 1.93% to HKD 13.72. Guotai Junan Securities pointed out that the net profit of listed insurance companies in the first three quarters of 2024 increased significantly year-on-year: China Life Insurance +174%, New China Life Insurance +117%, The People's Insurance +77%, China Pacific Insurance +66%, Ping An Insurance +36%. The recovery of the equity market and the new regulations on equity have improved the flexibility of investment services and driven performance growth beyond expectations. Looking ahead, favorable policies will continue to support the high-quality development of the insurance industry. The "New Ten Policies" for insurance specify the direction of development, and the guidance on the entry of medium and long-term funds into the market combined with the relaxation of SFISF tools on the asset side will support the development of commercial insurance and annuity products. The liability side is expected to continue to grow at high quality, with a continuous reduction in liability costs to alleviate interest rate spread risks, and the valuation center of the insurance sector is expected to rise. Sinolink stated that insurance companies are expected to continue high-speed profit growth in Q4. In the life insurance sector, following the further reduction of the RMB deposit reference interest rate by state-owned banks in July, the 2.5% scheduled interest rate for traditional insurance still has a relative advantage. The strengthening of market confidence under the policy combination also benefits the sales of dividend insurance. In addition, the increase in scheduled interest rates may lead to an increase in value rates, and the new business premium for the first quarter of 2025 may be under pressure, but the NBV is expected to achieve positive growth. In the medium to long term, economic expectations are improving, and with the positive shift in real estate policies and the expected economic recovery, the cyclical logic of life insurance may begin to emerge. In the non-life insurance sector, the overall performance in the third quarter exceeded expectations, with a prominent feature of high dividends. It is recommended to focus on related H-share targets in the non-life insurance sector.