CMSCMaintains "Strong Buy" Rating for PICC P&C (02328) Capital Structure Resonates Driving High Profit Growth

CMSC released a research report stating that PICC P&C (02328) drives high profits in the third quarter of 2025. Looking ahead for the whole year, with the continuous growth of the overall automobile market sales volume, the company's vehicle insurance premium is expected to steadily increase, and the vehicle insurance COR is expected to be controlled within 96%. The comprehensive implementation of "reporting and management integration" for non-vehicle insurance is expected to benefit leading insurance companies with outstanding compliance operations, risk management, and service capabilities. As a leader in the property and casualty insurance industry, the company's competitive advantages are expected to continue to be highlighted, with stable ROE and high dividend yield, making it a long-term investment value. The current valuation of the company corresponds to 1.36x PB, maintaining a "strong recommendation" rating. The report cites the company's third quarter report for 2025, achieving a net profit of 40.268 billion, a year-on-year increase of +50.5%, and a Q3 quarterly increase of +91.5%. The comprehensive cost ratio is 96.1%, a year-on-year decrease of -2.1 percentage points, and the annualized total investment return rate is 5.4%, a year-on-year increase of +0.8 percentage points. In the first three quarters of the year, the company achieved a net profit of 40.268 billion, a year-on-year increase of +50.5% (previously announced growth rate of 40%-60%), with a Q3 quarterly increase of +91.5%. From the underwriting side, the original premium for the first three quarters was 443.182 billion, a year-on-year increase of +3.5%; the comprehensive cost ratio is 96.1%, a year-on-year decrease of -2.1 percentage points, mainly due to the company's continuous strengthening of fine expense management, improving operational efficiency, and underwriting profit of 14.865 billion, a year-on-year increase of +130.7%. From the investment side, the company's annualized total investment return rate in the first three quarters was 5.4%, a year-on-year increase of +0.8 percentage points; the total investment return was 35.9 billion, a year-on-year increase of +33.0%, mainly due to the rise in the capital market and the company's optimization of asset allocation by moderately increasing the allocation of high-quality equity assets. Furthermore, the company adheres to the internal development of vehicle insurance business, innovative development of commercial non-vehicle insurance, and high-quality development of policy-related business. In the first three quarters, the income from vehicle insurance services was 227.632 billion, a year-on-year increase of +3.7%; the comprehensive cost ratio was 94.8%, a year-on-year decrease of -2.0 percentage points; and achieved underwriting profit of 11.729 billion. The income from non-vehicle insurance services was 158.289 billion, a year-on-year increase of +9.3%; the comprehensive cost ratio was 98.0%, a year-on-year decrease of -2.5 percentage points; and an underwriting profit of 3.136 billion.