Amid industry pressure, SUNSHINE INS (06963) delivers stable performance, highlighting the value of its high dividend and low valuation for quality development.

In recent years, under the policy orientation of the 2024 revised "National Ten Measures," China's insurance industry has accelerated its transition towards high-quality development centered on value creation. The industry has roughly completed the reconstruction of its development logic over the past two years. However, in the first half of 2026, this transformation is entering a substantial pressure testing phase. The pressures stem from multiple resonating factors: first, the low interest rates combined with the full implementation of new insurance contract standards, which have intensified the impact of interest rate fluctuations on both assets and liabilities; second, the second phase of "Solvency II" has further tightened capital constraints; third, the liability side is deepening the integration of "reporting and operating," reducing demonstration interest rates for participating insurance, and expanding the negative product list, applying continuous pressure from the perspectives of costs, expenses, and products. In this changing industry landscape, the steady performance of SUNSHINE INS (06963) stands out as a notable case for observation. According to the company's mid-term financial report released on August 28, 2026, SUNSHINE INS's total premium income during the reporting period was 90.906 billion yuan, a year-on-year increase of 12.5%; net profit attributable to the parent was 4.694 billion yuan, up 38.5%; its embedded value was 124.93 billion yuan, an increase of 7.2% from the end of the previous year, and total assets reached 702.834 billion yuan, a year-on-year growth of 4.4%. The achievement of these mid-term results can be attributed to SUNSHINE INS's keen insight into industry trends and proactive positioning. The company has internalized external regulatory guidance into its operational strategy and has consistently advanced the "New Sunshine" strategy, which has enabled it to demonstrate strategic resilience and operational flexibility despite multiple pressures in the industry. This has stabilized its operational fundamentals and opened up space for subsequent value release and structural optimization, with hopes for a revaluation of its value in the capital market. Channel transformation shows the resilience of life insurance business, while actuarial technology spans the entire chain of non-life insurance. Since 2026, regulatory compliance in the insurance industry has been continuously upgraded, with several documents issued in succession to regulate industry development. Among them, in March, the Office of Life Insurance Supervision from the Financial Regulatory Administration issued the "Notice on Further Strengthening the Management of Expenses in Bank Proxy Channels" (Jin Shouxian Han [2026] No. 65), which will be fully implemented starting July 1. As a further deepening of the bank-insurance "integration of reporting and operations" in August 2023, Document No. 65 upgraded expense management from "controlling total commissions" to "managing expense structure," aiming to eliminate any excess in reported expenses rather than merely shifting them from visible to hidden. Under this constraint, the industry's channel logic has experienced a substantial transformation: the bank insurance channel has shifted from "competing for commissions" to "competing for value rates, service capabilities, and deep integration with banking ecosystems"; individual insurance channels have transitioned from "massive tactics" to "quality teams," enhancing core manpower production capacity to offset scale contraction. In this accelerated switch in industry logic, SUNSHINE INS has emerged as an early example of channel transformation among medium-sized listed insurance companies, demonstrating noticeable development resilience as early as the regulatory promotion phase of "integrated reporting and operations" in 2025. In the context of further deepening "integrated reporting and operations" in the first half of 2026, the company's response strategies and operational performance possess notable observational value. During the reporting period, Sunshine Life upheld a "dual drive from individual and bank insurance" strategy, matching client demands with differentiated models; Sunshine Property & Casualty Insurance utilized the "Life Table Project" as a core initiative to enhance risk pricing and cost management capabilities, thus showcasing strong proactivity in addressing deepened regulatory measures. Specifically, individual insurance firmly advanced quality development transformation, deepening the "one body with two wings" strategy, strengthening customer management capability, implementing standardized operating processes for the "Five-Step Customer Management Method," and upgrading team grading management and training systems to enhance operational efficiency, with the per capita production capacity for individual insurance activities at 37,000 yuan, a year-on-year increase of 31.3%. After significantly improving per capita production capacity, the company achieved total premium income from individual insurance of 18.52 billion yuan during the reporting period, up 20.7%, with new single-period premium income of 4.62 billion yuan, a year-on-year increase of 60.0%. Meanwhile, the bank insurance business remained anchored on value. On the channel side, the company consolidated its advantageous channels and expanded new strategic channels, deepening the co-construction of network nodes and team ecosystems; on the team side, the quality was optimized, and graded management was implemented; on the product service side, a full range of multilevel product service matrices was improved. In the first half of the year, total premium income from bank insurance was 44.68 billion yuan, representing a year-on-year growth of 26.1%; of this, new single premium income was 23.61 billion yuan, a year-on-year increase of 83.4%, with per capita production capacity of active participants reaching 154,000 yuan. In the realm of property insurance, SUNSHINE INS, leveraging the "Three Life Tables" as its backbone, integrated accurate pricing and resource allocation capabilities across car insurance, non-car insurance, and agricultural insurance segments, driving business transformation from "scale-driven" to "risk selection, structural optimization, and value creation." The essence of this layout is the upgrade of actuarial technology into a full chain spanning property insurance products, channels, claims, and services. During the reporting period, property insurance original premium income (excluding guaranteed insurance) was 24.012 billion yuan, a year-on-year increase of 5.3%, with net profit reaching 800 million yuan, up 55.1%. Additionally, the structure of car insurance continued to optimize, with the proportion of premiums from household vehicles and new energy vehicles increasing. Building a "anti-fragile" asset allocation system to accelerate the coordination between assets and liabilities. The deepening of "integrated reporting and operations" not only impacts the channels but also affects profitability. Due to the rigid constraints imposed by the deepening of "integrated reporting and operations" on expenses, the profit source from cost differentials has been directly cut off. Coupled with the pressure from low interest rates leading to margin loss, the comprehensive implementation of new accounting standards amplifying the impact of asset volatility on profits, and capital hard constraints imposed on alternative investments in Solvency II Phase II, the expansion on the liability side can no longer mask the shortcomings on the asset side, making "asset-liability coordinated management" evolve from a strategic slogan into a hard constraint crucial for survival. In response to this pressure, Sunshine Asset Management's approach is not passive defense but focuses on asset-liability matching at its core to build an "anti-fragile" asset allocation systemone end locks in interest rate spreads with long-duration bonds to secure profitability cushions, smoothing profit volatility under the new standards through amortized cost methods and high dividend OCI assets; the other end reserves for reverse-cycle primary market layouts and new productive capabilities to expand yield boundaries while controlling drawdowns. This three-layer architecture of "fixed income supporting liabilities, equity enriching inflation hedge, and accounting classification managing volatility" fundamentally finds a dynamic optimal solution between capital constraints and revenue targets. Based on this "anti-fragile" asset allocation system, by the first half of 2026, SUNSHINE INSs total asset management scale reached 667.76 billion yuan, a growth of 4.3% from the end of the previous year; it achieved total investment income of 12.43 billion yuan, a year-on-year increase of 16.2%. Moreover, Sunshine Asset Management's capabilities have exceeded mere "managing its own money," evolving towards a market-oriented asset management platformits multi-asset and multi-strategy system supports resilient growth in third-party businesses, consistently selected as one of the IPE Global 500 for four consecutive years (ranked 250th globally and 50th in China in 2026), marking its asset management capabilities with the industry position to deliver value externally. During the reporting period, the scale of third-party assets under management reached 191.015 billion yuan. At the same time, the company's debt-related business deeply integrates with national strategies such as the coordinated development of Beijing-Tianjin-Hebei, advanced manufacturing, and the "Belt and Road" initiative, garnering long-term stable returns while elevating insurance funds from "financial investors" to "patient capital for the real economy," establishing a unique coordinate for medium-sized insurance companies within the financial "five major articles." Deepening client needs across their entire life cycle to build differentiated barriers. As the industry's transformational changes continue to deepen, the underlying logic begins to fundamentally shift, with the development path under the old "scale-driven" model becoming increasingly unsustainable. It has become a strategic imperative for medium-sized insurance companies to establish long-term differentiated competitiveness in the new industry landscape. In the performance of SUNSHINE INS, the answer it provides is becoming increasingly clear: build a customer management closed loop that integrates "salesproductsservices," which is one of the key supports allowing SUNSHINE INS to maintain stable growth while facing multiple pressures in industry development. During the reporting period, SUNSHINE INS focused on accurately understanding and actively meeting the differentiated needs of clients throughout their entire life cycles, creating a customer management closed loop that synergizes sales, products, and services. Specifically, Sunshine Life deepened the "Caring Sunshine" strategy: on the sales front, it enhanced the management of middle-to-high-end clients; on the product front, it leveraged the "Three-Five-Seven" system to cover "the elderly, children, and high-net-worth" demographics. For the elderly customer group, it introduced scenario-based products like annuity + long-term care; for children, it launched exclusive critical illness insurance; and for high-net-worth clients, it established agile customization mechanisms. On the service side, it continued to iterate in health, retirement, and education, launching 22 new health services, building a multi-layered ecological matrix for retirement, and providing comprehensive planning for educational advancement. Sunshine Property & Casualty upgraded its top-level design for customer management: for individual clients, the team transitioned to all-round insurance advisors, innovating products around high-frequency scenarios like travel and health, converting car insurance clients into comprehensive protection clients, with claims processing available 24/7 through Siasun Robot & Automation, maintaining a satisfaction rate above 9; for corporate clients, it effectively implemented the Partner Action initiative, completing iterations of the ABCD rating system, with service volume for risk reduction in niche sectors like hotels, warehousing, and onshore wind power doubling year-on-year, establishing a framework of "online monitoring + offline responses." By deeply cultivating the entire life cycle of client, SUNSHINE INS can convert one-time sales relationships into long-term client value management. This enables the company to develop sustainable sources of mortality and expense differentials on the liability side while building differentiated advantages beyond expense competition on the channel side, thereby seizing a proactive position in the inevitable trend of the industry shifting from "selling policies" to "selling comprehensive risk services." In summary: SUNSHINE INS has demonstrated through its stable performance that the company has the capability to navigate through cycles with its differentiated competitive advantages amid the industry's painful transition toward high-quality development. This performance is prompting the capital market to reevaluate SUNSHINE INS's investment value, supported by several leading brokerage reports. Among them, Orient stated that SUNSHINE INSs life insurance sector, driven by bank insurance, is showing rapid growth in new business and NBV, while core underwriting profits in its property insurance business have improved, with expanded investment assets and enhanced equity allocations enhancing income elasticity. Based on expectations of continuously improving fundamentals for SUNSHINE INS, they rated it as "Buy," setting a target price of 5.35 Hong Kong dollars, indicating substantial upside potential from the closing price of 3.45 Hong Kong dollars on August 28. Moreover, the typical characteristics of "high dividends + low valuation" further highlight SUNSHINE INS's allocation value. SUNSHINE INS is projected to distribute 0.19 yuan per share as dividends in 2025, with a dividend payout ratio of 34.65%, maintaining stability for four consecutive years; calculated based on the stock price at the end of August 2026, the TTM dividend yield is approximately 6.3%, ranking among the top in H-share listed insurance companies. While offering high dividends, SUNSHINE INS also exhibits significant low valuation characteristics. Industrial reported that SUNSHINE INS's current PEV is only 0.27, positioning it within the historical 23rd percentile, providing a favorable cost-performance ratio for allocation.