1Q OPAT a slight beat; positive outlook for full-year NBV and life OPAT acceleration

Ping Anpostedsolid1Q results, with Group OPATup7.6% YoY to RMB40.8bn,outpacingourestimateofRMB39.2bn (link). This increase can be attributedto 1) aresilientL&H OPATuptrend(+4.6%vs CMBI est: +4.5%); 2) PAB profit turnaround(+3.0%); and 3)a notable surge inAM profitability (+193.3%).Group NPATfell 7.4%YoY toRMB25bn,slightly betterthan ourestimateofRMB24.3bn, due toheightenedmarket headwindsin 1Q26.Group netasset value(NAV)grew 1.8% from year-startto RMB1.02tn, inline with ourforecast.Life NBVgrew20.8% YoY toRMB15.6bn(vs.CMBI est: RMB15.4bn),primarily driven by new business sales (+45.5% YoY)partially offset by asofteningmargin(-4.8pct YoY).P&C UW performancewas abeat,with COR down 0.8pct YoY to 95.8%andnon-auto premiumrising19.5% YoY,whichexceeded the industry average growth of 5.3%YoY in 1Q26.Mgmt.mentioned in the call that achieving double-digit NBV growth in 2026E is abaseline target, and we arepositive onahigh-teens NBVuptickandlifeOPATaccelerationin 2026E as CSM approaches aninflection point.Maintain BUY,withourSOTP-basedH/A-shareTP at HK$86/RMB75,implying0.83x FY26E P/EV. China Insurance 1Q OPAT a slight beat, driven by L&H/PAB/AM.Group OPAT growth in 1Q26was mainly driven by increases in Life & Health (+4.6%), Ping An Bank (+3.0%) andAM (+193.3%). L&H OPAT growth was broadly in line with our forecast, with newbusiness CSM likely to achieve a promising rise amid stable interest rates. Thebanking business returned to positive growth, driven by 1) a stabilized NIM (1Q26:1.79%vs FY25:1.78%),and 2)non-interest income growth from wealthmanagement and bond investments. AM OPAT amounted to RMB3.2bn in 1Q26,nearly tripling from 1Q25,thanks toupside from brokerage and asset managementbusinessesamid heightened equityvolatility, which bolstered trading activity.Wemaintain our view that continued easing of the AM drag and expected LifeOPAT acceleration should drivethe Group’svaluationre-rating over time.L&H OPAT in-line; NBVrose onhigher new business sales.Life NBV grew Source: FactSet 20.8% YoY to RMB15.6bn, driven by strong new policy sales (+45.5%) partiallyoffset by a 4.8pct YoY decline in margin to 23.5%. Mgmt. noted that this margincontraction was not due to product or channel skewness, but rather the fact thatthecomparable 1Q25 figures were not adjusted for changes in actuarialassumptions. Overall, NBV margin stood stable vs. the year-start level of 23.4%.Bancassurance was the leading channel for NBV growth,with its contribution(together with community finance)rising 6.8pct YoY to 31% in 1Q26. Agentheadcount declined 5.4% from year-start to 0.33mn, partly due to seasonality. Weexpect NBV toreachhigh-teens YoY growth in 2026Eled by new bizsales.P&C underwriting beat; OPAT weighed by investment.P&C CORimproved 0.8pct YoY to 95.8% in 1Q26, better than our estimate of 96.1%,due to lowerNAT CAT claims and continued expense rate controls across non-auto insurancelines. Total premium rose 6.8% YoY to RMB91bn, with auto insurance down 0.6%YoY to RMB53bnand non-auto up 19.5% YoY to RMB38bnin 1Q26. Per mgmt.,non-auto premium growth was mainly driven by health insurance. UW profitgrew28.4% YoY to RMB3.5bn, butthiswaspartiallyoffset by a decline in investmentreturns, resulting in a 13.4% YoY decreasein P&C OPAT in 1Q26. Auditor: Ernst & Young Related reports: 1.1Q26 preview: Expect resilient OPAT,NPAT to slide on equity swings; solid NBVuptrend,Apr 22, 2026 2.Group OPAT back to double-digit rise;expect CSM to return to positive growth in2026E, Mar30,2026 3.Banca fuelling NBV growth in jumpstartsales; 4Q earnings could ease on growthstock corrections, 23 Jan 2026 Maintain BUYwithTP of HK$86/RMB75.The stock is trading at 0.6x FY26E P/EVand 0.8x FY26E P/B. We are positive on the prospect of Ping An’s core businessimprovement, including1) Life OPAT acceleration in 2026E as CSM approachesthe inflection; 2) PAB profit enhancement; and 3) ongoing progress on AM de-risking. Maintain BUY with our SOTP-basedTP at HK$86 (H-share, unchanged)and RMB75 (A-share, added), implying 0.83x FY26E P/EV and 1.2x FY26E P/B.Earnings Summary 4.China Insurance-Easing solvency riskfactors to steer insurance funds into long-term stockholdings, 8 Dec 2025 5.3Q earnings beat; improving businessqualitywith catalysts across-the-boardworth to expect, 31 Oct, 2025 6.1H25 a mixed bag: NBV beat whileOPAT in line, Aug 28, 2025 Stable NIY; CIY recorded a larger decline.In 1Q26, NIY was broadly stable at0.8% (unannualized) vs. 0.9% in 1Q25, boding well for a stabilized trend inmarket interestrate.CIY posted a larger decline of 1.1pct YoY to 0.2%(unannualized), mainly due to heightened equity market headwinds in 1Q. Totalinvestment assets remained stable at ~RMB6.55tn, up 0.9% from year-start. Catalysts:1) Life CSM release andbalance growth inflection in 2026E; 2)continuedAM OPAT outperformance led by faster-than-expected de-riskingprogress; 3) accelerating OPAT payoutratiogrowth; 4) significant ralliesin equitymarkets; 5)new protection-