3q25回顾：承保和投资收益双强

3Q25 review: dual strength in underwriting andinvestment income PICC P&Cdelivered robust3Q25resultswith net profitreachingRMB15.8bn, up91.5% YoY,inline withtherangeinprofit alertof57%-122%(CMBI est). Theimprovement was driven by both enhanced underwritingperformanceand robustinvestment income. In 3Q25, insuranceserviceresultssurged 3.3x YoY toRMB5.3bn, up 3.28x YoY,and net investment results amounted to RMB 16.6bn,rising61% YoY. CoR improved 2.1pct YoY to 96.1%, with auto/non-auto CoRimprovedby2.0pct/2.5pct YoY to 94.8%/98.0% respectively. Underwriting profitrose130.7%YoY to RMB14.9bn in 9M25,reaching our full-year estimate (RMB 15bn), with3QUWP turning positive to RMB1.85bn(vs. 3Q24: anUWloss of RMB 2.6bn). TheimprovedUWprofitability in auto and non-autolinescan belargelyattributable tothe insurer’sstringentexpense control,andweexpectin both lines the drop inexpense ratiotomore than offset the increase in claims ratio.Totalinvestmentyield(unannualized)was5.4% in 9M25, up by 0.8pct YoY. Considering stronger-than-expectedinvestmentresultsand improvedexpensemanagement, weraiseourFY25-27E EPS forecastsby 11%/6%/6%to RMB1.86/1.94/2.17 (previous: RMB1.68/1.83/2.04) and lift our TP based on P/B-ROE to HK$23.6. Maintain BUY. Target PriceHK$23.60(PreviousTPHK$21.60)Up/Downside26.3%Current PriceHK$18.69 China Insurance Nika MA(852) 3900 0805nikama@cmbi.com.hk Stock Data Auto CoR improved by stringentcostcontrol.In9M25,autoCoR fell 2.0pctYoY to 94.8%, with autoinsurancerevenue edging up 3.7% YoY to RMB 227.6bn.We estimate the auto CoRin 3Qto be96.1%,slightlyhigher thanthe year-starttarget of <96%.Mgmt. mentioned in call that auto CoR improvedasthe dropofexpense ratio (-2.7pct)morethan offset therise ofclaimsratio(+0.7pct).Autounderwriting profitgrew65% YoY to RMB 11.7bn in 9M25, translating intoa57%YoYuptickto RMB 3.0bn in 3Q25.Autopremiumsgrew 3.1% YoY to RMB 220bn,andmgmt. guided the segment’s premiumincreaseshouldlargelyalign with theretail auto sales growth at ~3% over years. NEV CoRimproved with robust UWprofitabilityfrom household vehicles(1H25:73.4%mix)and strengthenedrepricing onoperating/commercial vehicles.Given proactive expense ratiocontrol andoptimized UW structure, weadjust our estimateson auto CoRto 95.1% (prev.95.8%),and trimauto premiumgrowthto3.2%(prev. 4%). Non-auto UWP turned positive.Non-auto CoR was 98%, down 2.5pct YoY in9M25, thanks toreducedcatastrophiclosses on top ofahighbaseand enhancedunderwriting structure. The segment’s UWPreachedRMB 3.1bnin 9M25(vs.aUWloss of RMB 676mn in 9M24). Non-auto premiums grew 3.7% YoY to RMB43.8bninthe quarter,andpremiumsof A&H, agricultural, liability and commercialpropertylinesrose11.5%/1.3%/0.5%/3.4%YoY.The new regulationon non-autoexpense ratiocontrolfromNovember 1 could be a catalyst for non-auto CoRimprovement in 4Q25E/FY26E,andweestimatethefull-year non-auto CoRtobe99.0%/98.1% in FY25/26E,largelyunchanged.(Fig.1). Auditor: Deloitte Related reports: 1.PICC P&C (2328 HK)-Robust 1Hdeliveryof CoR;overseas expansionyields to a second growth trajectory, Sep1, 20252.PICC P&C (2328 HK)-1Q25 CoRoutperformed, Apr 15, 20253.PICC P&C (2328 HK)-Optimized CoRguidancebeat expectations, Apr 1, 20254.PICC P&C (2328 HK)-3Q CoR missdragged by non-auto claims, Oct 31 20245.PICC P&C (2328 HK)-CoR sequentiallyimproved turning to positive 2Q net profitgrowth; first interim dividend in place, Aug30,20246.PICC P&C (2328 HK)-1Q catastropheinduced claims fully released; FY24 CoRguidance sustained; exp. >40% payout,May7, 2024 Strong equitymarket rally strengthened TII.In9M25, totalinvestmentincomeamounted to RMB 35.9bn,rising33% YoY. Total investment yield (unannualized)edged up 0.8pct YoY to 5.4%, whichcanbe attributable toan increasingscaleand share ofthe insurer’s equity investment exposure. As of 1H25, themixin TPLstocks/funds/OCI stockswasat2.4%/4.6%/6.8% of totalinvestmentassets, withTPL equities (7.0%) relatively lower than most peers.Lookingahead, webelievethe insurer has ampleheadroom toenhance itsTPL stockallocation vs. equityfunds and OCI stocks, steeringtheportfoliointo a more balanced direction. Valuation: raise TP to HK$23.6; maintain BUY.The stock is trading at1.35xFY25EP/B with3yrforward ROEat15%andayieldof >4%. Consideringtheimproved UW structure and upbeatinvestmentperformance, weraiseour FY25-27E EPSestimatesby11%/6%/6%to RMB1.86/1.94/2.17 (vs.previous: RMB1.68/1.83/2.04). Maintain BUY,we raiseourTPtoHK$23.6based on P/B-ROE,implying1.7x FY25E P/B. 7.PICC P&C (2328 HK)-Non-auto CoRbetterthan expected;sustain 40%+payout innext two years, Apr 2, 20248.PICC P&C(2328 HK)-Expect FY23ECoRguidance met; underwriting of NEVsandindividual A&H to drive new growthFeb 5,2024 Downside risks:1)full-year CoR deteriorates due to worse-than-expectedcatastrophic claims; 2) slower-than-expected auto and non-auto premium growth; 3)thenew regulatory action on non-auto expense ratio control takes longer tomaterialize;4) significant interest rate shock;and 5) heightene