23 Oct 2026 CMB International Global Markets | Equity Research | Company Update

Ping An (2318 HK/601318 CH) 3Q26 preview: NPAT to hit quarterly trough while OPAT

Ping An (2318 HK/601318 CH)

3Q26 preview: NPAT to hit quarterly trough while remainedrobust OPAT remained robust

Ping An is scheduled to report 3Q26 quarterly earnings on 28 Oct (Wed) post-market. We expect Group OPAT to grow 8.1% YoY in 9M26 (1H26: +8.3%), implying broadly intact 3Q growth of 7.6% YoY (vs 1Q/2Q26: +7.6%/+9.0%) unaffected by the quarterly capital market volatilities. Group NPAT could drop 29% YoY in 9M26 per our estimate (vs. 1H26: +36%), dragged by sharp A-share market corrections as CSI300/SHCOMP index was down 13%/6% in 3Q26 (vs. 3Q25: +18%/+13%). NAV could rise 3.0% from year-start, flat QoQ, as a combined result of 1) higher fair value gains from OCI equities i.e. the CSI Dividend/CSI High Dividend Low Vol index rose 9%/10% in 3Q26 and Ping An’s higher-than-most-peers OCI stock exposure (1H26: 66%); 2) China’s 10yr govt. bond yield trending lower in 3Q, which could boost OCI bonds’ fair value, offset by the 3) increase in liability reserve charge. NBV could see a double-digit decline, which we estimate to fall 14% YoY in 9M26. This was weighed by an industry-wide sales slowdown and a one-off negative impact on margin given the high comparative set prior to actuarial assumption changes by end-FY25. Despite an anticipated recovery in 4Q, we revise down our full-year NBV growth forecast to bake in the 3Q26 lag. P&C combined ratio could be better than expected and we forecast to improve 0.5pct YoY to 96.5% in 9M26. Maintain BUY with our H/A-share price target unchanged at HK$81/RMB73.

China Insurance

12-mth Price Performance

 3Q NPAT to hit a quarterly trough within the year while OPAT stayed robust. We expect Group NPAT to decline 29% YoY in 9M26, mainly weighed by A-share market headwinds in 3Q26 (CSI 300/SHCOMP: -13%/-6%, vs. 3Q25: +18%/+13%), offsetting 1H investment gains. Despite this softness, Ping An could outperform peers in 3Q IFRS net earnings given its greater exposure to OCI stocks than peers (1H26: 66% in stock mix/9.6% of insurance funds vs. peers’ average of 40%/4.7%). Group OPAT could grow 8.1% YoY in 9M26, translating into a 7.6% YoY lift in 3Q, of which we expect the L&H, PAB, and AM segments to remain solid drivers.

Source: FactSet

 NBV to fall on premium slowdown and a margin high-base. We forecast NBV to decline 14% YoY in 9M26 (vs. 1H26: +11%), dragged by an industry-wide sales slowdown against a strong comparative prior to the PIR cuts in Sep 2025, the feedthrough impact of tighter bancassurance regulation, and a one-off negative margin impact given the base set before the actuarial assumption changes by end-2025. 4Q NBV recovery could come along with the ramp-up of the 2027 jumpstart sales, yet the agency force would still need more time shifting towards life products with extended payment terms. We revise down our FY26E NBV growth forecast to 4%.

 P&C COR likely better than previous estimates. We estimate P&C combined ratio to improve 0.5pct YoY to 96.5% in 9M26 despite under the backdrop of increasing natural catastrophe (NAT CAT) claims in 3Q. The COR improvement could be a result of 1) ongoing tightening of expense control, allowing the decrease of expense ratio more than offset the increase in claims ratio (CMBI est); 2) robust underwriting prints in 1H26 left space for claims on major catastrophes in 3Q26. On the premiums front, we maintain our forecast on low single-digit growth in 9M.

Auditor: Ernst & Young

Recent reports:

• 1. Group OPAT strengthened by AM; NBV largely in-line, Aug 25, 2026

• 2.1H26 preview: 2Q OPAT strength persists while NBV takes a breather, Jul 22, 2026

• 3.. 1Q OPAT a slight beat; positive outlook for full-year NBV and life OPAT acceleration, Apr 29, 2026

• 4. 1Q26 preview: Expect resilient OPAT, NPAT to slide on equity swings; solid NBV uptrend, Apr 22, 2026

• 5. Group OPAT back to double-digit rise; expect CSM to return to positive growth in 2026E, Mar 30,2026

• 6. Banca fuelling NBV growth in jumpstart sales; 4Q earnings could ease on growth stock corrections, 23 Jan 2026

 TP unchanged; yield topped among peers. The stock is trading at 0.47x FY26E P/EV and 0.7x FY26E P/B with an avg. 3yr forward ROE >13% and a yield close to 7% amid recent share price corrections, standing as the highest among peers. We expect a clearer guidance on 4Q-to-date life sales momentum and updates for the 2027 jumpstart sales during the call. Maintain BUY, with our H/A-share TP unchanged at HK$81/RMB73 which implies 0.8x FY26E P/EV and 1.2x FY26E P/B.

Earnings Summary:

(YE 31 Dec) FY24A FY25A FY26E FY27E FY28E EPS, diluted (RMB) 6.99 7.44 6.98 8.34 9.06 Consensus EPS (RMB) n.a n.a 8.05 8.85 9.60

• P/B (x) 0.8 0.7 0.7 0.7 0.6

• P/Embedded value (x) 0.5 0.5 0.5 0.4 0.4 Dividend yield (%) 6.2 6.5 6.9 7.4 7.9 ROE (%) 13.9 14.0 12.4 13.0 14.0 Source: Company data, Bloomberg, CMBIGM estimates

PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE MORE REPORTS FROM BLOOMBERG: RESP CMBR OR http://www.cmbi.com.hk

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 Key risks: 1) regulatory tightening on life insurance and financial conglomerates; 2) heightened equity market volatility; 3) a prolonged low-interest rate environment; 4) intensified pricing competition in P&C industry; 5) asset quality deterioration; and 6) a significant decline in Group capital level weighing on DPS growth, etc.

 Company description:Founded in 1988, Ping An is a leading financial conglomerate with businesses spanning life and P&C insurance, pension, banking, brokerage, trust, and other financial services. The company pursues a technology-empowered growth strategy across core financial businesses of insurance, banking, brokerage, and asset management. As of FY25, Ping An ranked as the second-largest Life and P&C insurer in China by total written premiums. The banking business segment is operated by its subsidiary Ping An Bank (000001 CH, 58% Group stake), which has a focus on retail and SME businesses. Ping An Healthcare and Technology (1833 HK, 53% Group stake) was listed in May 2018 as China’s first listed internet-health company.

Focus Charts

Fig 1. Ping An’s P/EV(x) trading below 2yr mean-1STD

Fig 2. Ping An’s P/B(x) trading below 2yr mean-1STD

Source: Bloomberg, CMBIGM estimates | Note: stock price data quoted by market close on 22 Oct (Thu).

Source: Bloomberg, CMBIGM estimates | Note: stock price data quoted by market close on 22 Oct (Thu).

Fig 3. Listed insurers’ OCI stocks allocation in 1H26

Fig 4. Stocks categorized in FVTPL vs. FVOCI in 1H26

Source: Company data, CMBIGM

Source: Company data, CMBIGM

Fig 5. CSI 300/SHCOMP index & CNGB10YR yield (%)

Fig 6. CSI dividend/CSI High Div Low Vol performance

Source: Bloomberg, Wind, CMBIGM | Note: stock price data quoted by market close on 22 Oct (Thu).

Source: Bloomberg, Wind, CMBIGM | Note: stock price data quoted by market close on 22 Oct (Thu).

Financial Summary

INCOME STATEMENT 2023A 2024A 2025A 2026E 2027E 2028E

YE 31 Dec (RMB mn) Insurance revenue 536,440 551,186 559,502 562,225 566,269 585,092 Insurance service expenses (440,178) (449,102) (453,268) (454,804) (456,846) (471,872) Net expenses from reinsurance contracts held (3,731) (3,601) (5,066) (4,412) (4,848) (5,002) Insurance service results 92,301 98,127 100,970 102,827 104,380 108,012 Net finance (expenses)/income from insurance contracts

(123,959) (172,662) (179,978) (214,143) (239,253) (267,544)

Net finance (expenses)/income from reinsurance contracts

542 960 336 503 502 528 Interest income 118,503 123,627 135,798 124,419 141,407 157,539 Net investment income 33,324 161,074 154,544 200,168 227,190 253,097 Other gains/(losses) from changes in fair value (9,940) (19,814) (13,795) (26,417) (27,920) (28,467) Net investment results 18,470 93,185 96,905 84,530 101,926 115,154 Net interest income from banking operations 118,947 93,913 88,662 84,848 83,916 82,795 Net interest income/(expenses) from non-banking operations

(24,346) (19,405) (20,533) (19,879) (18,752) (18,173) Loan loss provisions (62,833) (56,245) (54,738) (49,732) (47,144) (44,350) Other fee and commission income/(expenses) (8,773) (7,841) (9,779) (11,327) (11,894) (12,517) Other income 68,804 65,191 73,345 73,969 74,695 75,481 Other expenses (129,813) (139,117) (137,291) (142,113) (145,833) (150,073) Foreign exchange gains/losses 120 380 618 (167) (167) (167) Other results 7,912 (17,338) (7,481) (8,235) (7,193) (7,116) Profit before tax 120,117 170,495 185,590 178,504 198,433 215,302 Income taxes (10,843) (23,762) (27,289) (32,465) (28,845) (30,531) Net profit 109,274 146,733 158,301 146,039 169,588 184,770 Net profit attributable to shareholders 85,665 126,607 134,778 126,306 150,986 164,101

BALANCE SHEET 2023A 2024A 2025A 2026E 2027E 2028E

YE 31 Dec (RMB mn) ASSETS

Cash and amount due from banks and other financial institutions

804,077 1,018,027 1,189,867 1,034,475 1,061,140 1,088,525 Balances with central bank and statutory deposits 329,531 344,608 334,290 310,612 288,610 268,167 Intangible assets 99,078 97,263 83,478 79,972 76,613 73,395 Investments in associates and joint ventures 258,877 185,514 141,251 133,727 136,415 139,157 Property 50,401 48,603 46,934 44,987 43,120 41,331 Investment property 121,406 119,158 128,259 130,752 139,525 149,131 Reinsurance contract assets 22,215 26,084 25,515 27,364 30,086 33,037 Loans and advances to customers 3,320,110 3,294,053 3,320,386 3,365,921 3,522,868 3,697,643 Fixed maturity investments 4,976,779 5,912,846 6,074,144 6,522,106 6,980,625 7,483,529 Equity investments 1,130,853 1,328,664 1,928,348 2,062,071 2,221,310 2,396,547 Derivative financial assets 44,978 68,698 30,002 28,636 31,571 34,807 Deferred tax assets 101,337 122,012 114,640 121,475 128,717 136,392 Other assets 323,775 392,297 481,357 493,009 617,829 768,193 Total assets 11,583,417 12,957,827 13,898,471 14,355,106 15,278,428 16,309,853

LIABILITIES Due to banks and other financial institutes 963,718 838,183 1,104,609 972,826 1,021,468 1,072,541 Customer deposits and payables to brokerage customers

3,534,539 3,710,167 3,809,246 3,739,019 3,814,173 3,890,838

Insurance contract liabilities 4,159,801 4,984,795 5,360,910 6,001,577 6,598,497 7,245,879 Obligations under repurchase agreements 241,803 462,292 643,547 443,435 359,182 290,937 Derivative financial instruments 44,531 74,937 46,862 40,758 41,577 42,412 Deferred tax liabilities 14,148 13,977 6,647 4,511 2,538 1,427 Current tax liabilities 7,117 14,970 11,095 12,585 14,275 16,191 Other liabilities 1,388,743 1,553,225 1,499,030 1,660,469 1,839,295 2,037,379 Total liabilities 10,354,453 11,653,115 12,482,483 12,875,180 13,691,004 14,597,605

EQUITIES

Share capital 18,210 18,210 18,108 18,108 18,108 18,108 Reserves 263,752 221,594 215,070 181,679 165,759 156,663 Retained profits 622,050 693,797 767,241 843,454 944,684 1,055,288 Total shareholders' equity 899,011 928,600 1,000,419 1,043,241 1,128,551 1,230,059 Non-controlling interests 329,953 376,112 415,569 436,685 458,873 482,189 Total equity 1,228,964 1,304,712 1,415,988 1,479,926 1,587,424 1,712,248 Total liabilities & equity 11,583,417 12,957,827 13,898,471 14,355,106 15,278,428 16,309,853

PER SHARE DATA 2023A 2024A 2025A 2026E 2027E 2028E

YE 31 Dec

DPS (RMB) 2.43 2.55 2.70 2.86 3.03 3.27 EPS, diluted (RMB) 4.74 6.99 7.44 6.98 8.34 9.06 Consensus EPS (RMB) n.a n.a n.a 8.05 8.85 9.60 No. of shares outstanding (mn) 18,210 18,210 18,108 18,108 18,108 18,108

PROFITABILITY 2023A 2024A 2025A 2026E 2027E 2028E

YE 31 Dec

Return on equity (ROE) 9.7% 13.9% 14.0% 12.4% 13.0% 14.0% VNB margin (FYP basis) 23.7% 18.5% 23.4% 24.2% 24.2% 24.3% Combined ratio (%) 100.7% 98.3% 96.8% 96.7% 96.5% 96.3%

VALUATION 2023A 2024A 2025A 2026E 2027E 2028E

YE 31 Dec

• P/Embedded value (x) 0.5 0.5 0.5 0.5 0.4 0.4

• P/B (x) 0.8 0.8 0.7 0.7 0.7 0.6 Dividend yield (%) 5.9 6.2 6.5 6.9 7.4 7.9 Source: Company data, CMBIGM estimates. Note: The calculation of net cash includes financial assets. | Note: stock price data quoted by market close on Oct 22, 2026 (Thu).

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CMBIGM Ratings

BUY : Stock with potential return of over 15% over next 12 months HOLD : Stock with potential return of +15% to -10% over next 12 months SELL : Stock with potential loss of over 10% over next 12 months NOT RATED : Stock is not rated by CMBIGM

OUTPERFORM : Industry expected to outperform the relevant broad market benchmark over next 12 months MARKET-PERFORM : Industry expected to perform in-line with the relevant broad market benchmark over next 12 months UNDERPERFORM : Industry expected to underperform the relevant broad market benchmark over next 12 months

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