Shares of Chinese domestic insurance companies are extending their recent rally, with significant gains recorded during Thursday's trading session.

NCI (01336) advanced 5.14% to HK$49.92, while PICC GROUP (01339) climbed 3.85% to HK$6.21. PING AN (02318) moved up 3.43% to HK$57.35, CPIC (02601) rose 3.15% to HK$31.48, and CHINA LIFE (02628) added 1.87% to HK$30.54.

Behind the headlines, a wave of improved first-half investment performance is providing the fundamental support. Multiple insurers have posted substantial jumps in total investment income, driven by optimized portfolio allocation strategies and a recovering capital market. CHINA LIFE reported total investment income of RMB 314.504 billion for H1, a surge of 146.7% year-on-year. PICC GROUP saw its figure reach RMB 66.327 billion, up 59.9%. PING AN recorded RMB 136.929 billion, an increase of 42.3%. NCI posted RMB 57.525 billion, growing 27%, while CPIC achieved RMB 66.022 billion, a 16.1% rise.

According to a research note from Guotai Haitong Securities, all listed insurers have now released their interim results, and the overall performance has aligned with market expectations. A favorable combination of improved asset and liability dynamics is propelling the sector towards sustained positive momentum.

The brokerage also pointed out that the long-term valuation benchmark continues to be influenced by interest rate trends and asset-liability matching levels. However, it anticipates that listed insurers will keep refining their asset allocation, steadily increasing exposure to equity assets to boost comprehensive investment returns. This approach is expected to stabilize corporate profits and shareholder dividends. The firm maintains an "overweight" rating on the industry, citing optimism over a valuation recovery from historically low levels.