According to recent reports, The Pacific Securities Co., Ltd. has reiterated its "Buy" rating for Sunshine Insurance (06963). The firm anticipates the company's operating revenues will reach CNY 95.368 billion, CNY 100.325 billion, and CNY 106.974 billion from 2025 to 2027, with net profits attributable to shareholders forecasted at CNY 6.095 billion, CNY 6.550 billion, and CNY 7.152 billion for the same period. The per-share net asset value is projected to be CNY 5.74, CNY 6.11, and CNY 6.51.

In the first half of the year, Sunshine Insurance's new business value (NBV) in life insurance rapidly rebounded, driven by a combination of dividend insurance and interest rate reductions, enhancing its value ratio. Additionally, improvements in the expense ratio of property insurance have resulted in better underwriting performance, while the investment side remains robust and well-capitalized. As channel reform and product structure optimization continue, the company is expected to see further profit enhancements.

The Pacific Securities has highlighted key insights from Sunshine Insurance Group’s mid-year report for 2025. In the first half, the group posted insurance service revenue of CNY 32.441 billion, a year-on-year increase of 3.0%, and net profit attributable to shareholders of CNY 3.389 billion, up 7.8% from the previous year, with a weighted average return on equity (ROE) of 5.7%, an increase of 0.5 percentage points year-on-year.

Life insurance operations showed steady progress, whilst property insurance profitability continued to strengthen. The total premium income and insurance service revenue for the company in the first half of 2025 reached CNY 80.81 billion and CNY 32.44 billion, respectively, marking year-on-year increases of 5.7% and 3.0%. The group’s embedded value stood at CNY 128.49 billion, an 11.0% rise since the beginning of the year. As of the end of the reporting period, the effective customer count reached 30.116 million, with the life insurance NBV at CNY 4.01 billion, a year-on-year increase of 47.3%, and life insurance EV at CNY 106.2 billion, up 13.8% from the start of the year.

The Contract Service Margin (CSM) totaled CNY 56.08 billion, a 10.3% rise since the end of the previous year, while individual premium income amounted to CNY 15.34 billion, a 12.1% year-on-year increase. Bank insurance premium income reached CNY 35.44 billion, a year-on-year growth of 4.2%, with total premium income from other businesses at CNY 4.66 billion, reflecting a 14.9% increase.

The property insurance business structure is continually being optimized, with original premium income reaching CNY 25.27 billion, representing a year-on-year increase of 2.5%. Of this, non-auto insurance premium accounted for 50.6%, an increase of 4.5 percentage points year-on-year, and household vehicle premiums constituted 65.3% of auto insurance, with a 3 percentage point increase. The comprehensive underwriting cost ratio improved to 98.8%, down 0.3 percentage points year-on-year, producing underwriting profits of CNY 0.29 billion, a year-on-year increase of CNY 0.09 billion.

On the investment front, the group maintained its solidity, with total investment assets reaching CNY 591.86 billion by the end of June 2025, achieving total investment returns of CNY 10.70 billion for the first half, equating to an annualized total investment return rate of 4.0% and an annualized comprehensive investment return rate of 5.1%, with a net investment return rate of 3.8%. Fixed-income financial asset investments represented 69.4% of total investments, with bond investments making up 53.3% of total investment assets, while equity financial asset investments accounted for 21.8%, with stocks comprising 14.1%.

The company continues to strengthen asset allocation and risk management, with the proportion of government bond investments up by 3.1 percentage points during the reporting period. The domestic bonds held have a credit rating of 95.1% rated as AAA. The group’s core solvency adequacy ratio and comprehensive solvency adequacy ratio stand at 171% and 233%, respectively. Sunshine Life and Sunshine Property’s core solvency adequacy ratios are 155% and 177%, with comprehensive solvency adequacy ratios of 216% and 247%, both showing improvements since the start of the year, indicating a strengthening solvency position.

Risk warnings include potential macroeconomic recovery falling short of expectations, capital market volatility, and the frequency of natural disasters.