Ping An Insurance Group - H: First Take: Cash generation strengthens in 1H26 as Life CSM returns to growth

Research evidence excerpt

Asia Pacific Equity Research

20 August 2026

Ping An Insurance Group - H

First Take: Cash generation strengthens in 1H26 as

Life CSM returns to growth

Our First Take: Ping An Group’s 1H26 results appear broadly in line with our

expectations and confirm that key financials are turning around, supported by

business growth, stronger cash generation and balance sheet expansion. Highlights

include (1) Rmb84.2B of 1H26 operating profit after tax, OPAT, up 8.3% oya and

ahead of our forecast of Rmb84.1B, (2) Rmb24.8B of 1H26 new business value

(NBV), up 11% oya versus JPMe of Rmb25.5B, and (3) a group core capital ratio

of 166% as of June-26, up 4.9%p YTD. The proposed interim DPS was slightly

below our forecast at Rmb0.98, up 3.2% oya versus JPMe of Rmb1.02, although

this represents only part of the full year dividend. Importantly, the life reserve,

CSM, has started to grow, with the gap narrowing between new business CSM of

Rmb29.8B (vs. Rmb25.2B in 1H25) and CSM release of Rmb33.6B (vs.

Rmb34.6B in 1H25). Positive CSM variance YTD also points to further core

earnings growth potential in 2027 and beyond, subject to the life sales outlook. At

the holding company level, free cash reached Rmb81.7B as of Jun 26, up 20%

YTD, with dividends from subsidiaries, especially Ping An Life, sufficiently

covering shareholder dividend payments. Despite fundamental improvements, the

stock has delivered only -17% YTD performance versus HSI:+0.3%. On 5x

FY27E P/E and a 6% yield, we see an attractive risk reward profile. Key areas to

watch are management guidance on FY26-27 life NBV growth, year-end dividend

expectations, and the monetisation of Ping An Group/Ping An Life’s 253mn/48mn

customers (as of Jun-26) through healthcare and elder care services. Stay OW.

Overweight

2318.HK, 2318 HK

Price: HK$54.10

20 Aug 2026

Price Target: HK$95.00

PT End Date: 31 Dec 2027

Insurance

MW Kim AC

(852) 2800-8517

J.P. Morgan Securities (Asia Pacific) Limited/

J.P. Morgan Broking (Hong Kong) Limited

Dan Wang

(86-21) 6106-6349

SAC Registration Number: S1730524080001

J.P. Morgan Securities (China) Company

Limited

Julia Kim

(852) 2800-8540

J.P. Morgan Securities (Asia Pacific) Limited/

J.P.…