Bank of America Securities: Raises Ping An Insurance (02318) target price to HK$67.5, strong investment income in the last quarter driving net profit beyond expectations.

Bank of America Securities released a research report stating that based on higher investment income assumptions, they have raised Ping An Insurance's profit forecast for 2025 by 26%, and raised profit forecasts for 2026 to 2027 by 4% to 5%. The target price for H shares has been raised from HK$64.8 to HK$67.5, and the target price for A shares has been raised from RMB 62.7 to RMB 65.2. The bank reiterates a "buy" rating on Ping An H shares. Ping An Insurance reported a net profit of RMB 132.9 billion for the first three quarters of 2025, a year-on-year increase of 11%, exceeding expectations. Net profit for the third quarter of 2025 increased by 45% year-on-year, mainly driven by strong investment income, due to the good performance of the Shanghai and Shenzhen 300 Index and the ChiNext Index. The new business value of life insurance for the first three quarters of 2025 increased by 46% year-on-year. The new business profit margin increased from 17.6% to 25.2%, consistent with the trend in the first half of 2025. After-tax operating profit for the first three quarters of 2025 increased by 7% year-on-year. Bank of America Securities expects that Ping An Insurance's after-tax operating profit for the full year of 2025 will increase by 10% year-on-year, and dividends will increase by 7%. The comprehensive investment return rate (unannualized) and net investment return rate for the first three quarters of 2025 were 5.4% and 2.8%, respectively, compared to 4.4% and 3.1% for the same period in 2024.