Huachuang Securities has issued a research report highlighting that China Taiping (00966) delivered an impressive first-half 2026 performance, with net profit attributable to shareholders climbing 90.3% year-on-year to HK$12.873 billion. The company's net assets attributable to shareholders also grew 8.9% from the end of the prior year, reaching HK$103.638 billion. In light of these results, the brokerage has maintained its "recommended" rating on the stock, applying a 0.4x price-to-embedded value (PEV) multiple for 2026, which translates to a target price of HK$26.7 per share.

The firm's analysts attribute the robust interim showing to a dual-pronged strategy: on the asset side, the company capitalized on favorable equity market conditions, while on the liability side, it seized growth opportunities within the bancassurance channel, driving a sharp increase in new business premiums. This coordinated approach has underpinned the stellar earnings growth. With the ongoing transition toward participating insurance products and the gradual release of investment-side flexibility, the analysts believe the company's valuation recovery rests on solid foundations.

Regarding the life insurance segment, the report notes that growth in new business premiums helped cushion the margin pressure stemming from the participating product shift. During the first half of 2026, the company's life insurance new business value (NBV) rose 1.4% year-on-year to RMB 6.268 billion. Breaking this down by channel, agency and bancassurance grew 9.4% and 17.5%, respectively, while combined long-term new business premiums across the three main distribution channels increased 11.2% year-on-year, partially offsetting the decline in NBV margin. Huachuang Securities projects that the margin contraction is largely attributable to the participating insurance transition, as participating products accounted for 97.8% of first-year regular premiums for long-term policies during the period—up 10.7 percentage points year-on-year—signaling deeper liability-side restructuring.

Turning to the property and casualty (P&C) segment, premium growth remained steady, though the combined operating ratio (COR) ticked upward amid shifting market conditions. In the first half, original P&C premiums grew 1.4% year-on-year, while the COR rose 1.3 percentage points to 98%, a movement the analysts attribute primarily to expense-side factors. Despite this, the segment sustained underwriting profitability. Regionally, domestic P&C premiums expanded 5.9% year-on-year, with auto and non-auto lines—the core drivers—increasing 4.7% and 6.1%, respectively. Overseas markets, however, showed mixed results, with Taiping Hong Kong and Taiping Singapore achieving improved COR figures.

Investment returns saw a notable uptick, accompanied by a rising allocation to funds. As of the end of June 2026, the group's total investment assets stood at HK$1.9415 trillion, up 11.4% from the end of the previous year. While the downward trend in interest rates continued to weigh on net investment yields, equity holdings delivered strong excess returns, with the FVTPL secondary equity portfolio generating a 14.5% investment return during the period. The group's annualized net and total investment yields came in at 2.85% and 5.21%, respectively, reflecting changes of -0.26 percentage points and +2.53 percentage points year-on-year. The non-annualized comprehensive investment yield reached 2.98%, up 1.12 percentage points from the prior year. In terms of asset allocation, bonds represented 73.7% of the portfolio, down 2.4 percentage points from year-end 2025, while equities and funds accounted for 18.1%, an increase of 1.5 percentage points, driven primarily by a larger fund allocation.