1H盈利超预期；ZA银行盈利速度超出预期；将TP上调至港币23港元

ZhongAn (6060 HK) 1Hearningsaclear beat; ZA Bank turned profitfasterthanexpected; raise TP to HK$23 ZhongAn delivered strong 1H results, withnet profit surging 11.04x YoY to RMB668mn, translating to 66% of our previous full-year forecasts driven by significantprofit uplifts inallthree core business segments. For P&C insurance, 1H25 CoRdropped 2.3pct YoY to 95.6%, with comprehensive loss ratio down 6pct YoY to54.7% offset by a rise of comprehensive expense ratio by 3.7pct YoY to 40.9%,which led to a more-than-doubled underwriting profit of RMB 627mn (+123%). ZABankturned a net profit of HK$49mn in 1H25, ahead of the market expectation forbreakeven by year-end. Technology business reduced net loss by 32.2% YoY toRMB 56mn, driven by continued digital transformation for operating efficiency.Total/net investment yields remained stable at 3.3%/2.1% in 1H25. ConsideringoutperformingP&C insurance and ZA Bank profitability and a full-year breakevenguidance for the tech business, we revise up our FY25-27E EPS forecasts toRMB0.80/0.94/1.08(previous: RMB 0.67/0.75/0.88), and revise up our SOTP-based TP to HK$23 (prev. HK$20.4), implying 1.5xFY25E P/B. Maintain BUY.P&C UWP morethandoubled with improved CoR across ecosystems.In Target PriceHK$23.00(Previous TPHK$20.40)Up/Downside14.3%Current PriceHK$20.12 China Insurance Nika MA(852) 3900 0805nikama@cmbi.com.hk Stock Data 1H25,total premiumsgrew9.3% YoY to RMB16.7bnthanks to significant upliftsofhealth/auto/consumer finance premiums(up by38.3%/34.2%/23.6% YoY).Digital lifestyleGWPslid 16.3% YoY to RMB6.2bndue to sluggishe-commerceshipping returnpolicy.Innovative business sustained strong demands with totalGWPrising40% YoY to RMB2.49bn, supported bygrowthof pet (+53%) and low-altitude economypremiums(+20%). P&C CoR improved 2.3pct YoY to 95.6%,given an enhancedloss ratio(down 6pct YoY to 54.7%), offset by a risingexpense ratio(up3.7pct YoY to 40.9%). To breakdown,theCoR of consumerfinance/health/autoecosystems was 94%/92.9%/91.2%,down 5.1pct/2.8pct/3.0pct YoYrespectively. Underwriting profitsurged 123% YoY to RMB627mn in1H25,withconsumer finance/health/autorising611%/95%/91% YoY.We revisedown our FY25E CoR forecast to 96.6% (prev. 96.9%), to reflectthestrengthenedUW profitability across lines amid changes ofpremiummix. ZA Bank’s breakeven fasterthanexpected.ZABankturned a net profit ofHK$49mnin1H25, ahead of market expectation on the bank’s profit turnaroundby year-end. Net revenue reached HK$457mn in 1H25, up 82.1%YoY with netinterest income/non-interest income up 43%/272% YoY to HK$297mn/160mn.Net interest margin (NIM) was 2.38%, up 0.1pct YoY,outpacing the industryaverage given a continuous diversification of the bank’s loan products. Cost-to-income ratio wasdown 52pct YoY to 67%dueto improved operating efficiency.With expanding wealth management business, we think the bank’s revenue mixcould further diversify with a higher contribution of non-interest income (1H25:54%, up 43pct from end-FY24), which could help reduce the interest ratesensitivity to theUSFed’s pivot in 2H25E, in our view.We raise our forecast onZA Bank net profit to HK$82mn in FY25E, given a more balanced earnings profile,enhancedwealth management balanceandupside from the HKstablecoinissuerlicense approvals in 2H25E tofurtherincreasethe bank’s reserve assets. Source: FactSet Auditor: PricewaterhouseCoopers Related reports: 1.Placement may cause limited downsidedespiteshort-term volatilities,Jun 26,20252.HK Stablecoins outlook opens up theheadroom for valuation re-rating; uplift TPto HK$20.4, Jun 3 20253.Tech export outof the red; ZA Bank ontrack for breakeven, 24 Mar 20254.Digital lifestyle leading growth; ZA Bankandtechnology export breakeven ontrack, 28 Mar 20245.Strong investment and UW profitsdrive 1H23 earnings turnaround,Aug 28,2023 New TP raised to HK$23.The stock is trading at 1.28x FY25E P/B, higher thanits3-year averageby 0.4STD (Fig.4). GivenoutperformingP&C underwritingprofitsand faster-than-expected ZA Bank turnaround, we raise our SOTP-derivedTP to HK$23.0 (prev. HK$20.4), based on 1) 1.31x P/B fordomestic P&Cinsurance by referring toa 10% discount on P/B of PICC P&C; 2) 15x P/E(unchanged)for domestic tech export, and 1.0x ARR multiple for Peak 3; and 3)2.8x FY25E P/B for ZA Bankby benchmarking toglobal digital banks (Fig.2). Key forecasts change Valuation Peerscomparable Disclosures& Disclaimers Analyst CertificationThe research analyst who is primary responsible for the content of this research report, in whole or in part,certifies that with respect to the securities or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensationwas, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analyst nor his/her associates (