ZhongAn (6060 HK) Summary
Core Content
ZhongAn reported a strong first-half (1H26) performance, with a net profit of RMB1.55bn, more than doubling from the previous year and significantly exceeding market expectations of RMB550mn. The outperformance is attributed to two key drivers: strong underwriting results and equity-driven fair value gains.
Key Highlights of 1H26
- Underwriting Profit: RMB773mn, up 17.8% YoY, with a combined ratio (CoR) improving to 95.5% (from 95.6% in 1H25).
- Investment Income: Surged to RMB1.6bn, up 150% YoY, primarily due to fair value gains from TPL equities amid a strong stock market.
- Core Equity Exposure: Increased to 13.2% of the insurance portfolio, up from 9.1% in FY25, but management indicated this level is unlikely to rise further in 3Q.
- ZA Bank Performance: Net profit reached HK$71mn, up from HK$49mn in 1H25, with a net margin of 12.2% and a net interest margin (NIM) of 2.99%.
- Technology Segment: Turned a profit of RMB17mn in 1H26, marking a significant turnaround.
Earnings & Financial Performance
Earnings Summary (YE 31 Dec)
| Metric |
FY24A |
FY25A |
FY26E |
FY27E |
FY28E |
| Net Profit (RMB mn) |
603 |
1,102 |
1,781 |
1,514 |
1,674 |
| EPS (Reported) (RMB) |
0.41 |
0.70 |
1.06 |
0.90 |
0.99 |
| Consensus EPS (RMB) |
n.a |
n.a |
0.83 |
0.91 |
0.98 |
| Combined Ratio (%) |
96.9 |
95.8 |
95.6 |
95.4 |
95.2 |
| P/B (x) |
0.7 |
0.6 |
0.6 |
0.5 |
0.5 |
| ROE (%) |
2.9 |
4.8 |
6.8 |
5.4 |
5.7 |
Financial Summary (YE 31 Dec)
- Insurance Revenue: RMB34.5bn in 1H26, up from RMB33.5bn in 1H25.
- Total Assets: RMB48.7bn in 1H26, up from RMB46.7bn in FY25.
- Total Liabilities: RMB21.5bn in 1H26, down from RMB24.4bn in FY25.
- Shareholders' Equity: RMB27.2bn in 1H26, up from RMB25.4bn in FY25.
- Net Profit Attributable to Shareholders: RMB1.781bn in FY26E, up from RMB1.102bn in FY25A.
Earnings Drivers
- P&C Underwriting: Improved CoR to 95.5%, with gains in Health and Digital Lifestyle ecosystems.
- Investment Gains: Strong fair value changes in equity holdings, with net investment income and fair value changes in roughly equal split.
- ZA Bank: Continued profitability with net revenue of HK$578mn and a net margin of 12.2%.
- Technology Segment: Turned a profit of RMB17mn, a positive development for the company.
Key Performance Metrics
- GWP by Ecosystems:
- Digital Lifestyle: RMB7.7bn (+25% YoY)
- Health: RMB6.7bn (+7% YoY)
- Auto: RMB1.5bn (+4% YoY)
- Consumer Finance: RMB0.56bn (-79% YoY)
- Insurance Premiums: Total premiums slightly declined by 0.6% YoY to RMB16.6bn.
Valuation & Price Target
- Current Price: HK$10.92
- Target Price: HK$18.00 (unchanged)
- Valuation Metric (P/B): 0.6x FY26E, close to its historical low.
- Earnings Forecast Adjustment: Raised FY26-28E EPS forecasts to RMB1.06/0.90/0.99 from previous RMB0.80/0.88/0.99.
Strategic Focus & Outlook
- ZA Bank: Strategic focus on retail wealth management is expected to drive AUM growth and further earnings upside.
- Auto & Health: Expected to see growth in GWP and insurance revenue, though Auto growth lagged the 30% guidance due to weak new vehicle sales.
- Consumer Finance: GWP and insurance revenue are expected to fall to a low-single digit contribution as the de-risking process continues.
- Investment Income: Expected to normalize from a high base in 2H26E.
Key Risks
- Intensified industry competition impacting premium sales and wallet share.
- Deteriorated loss ratio due to economic shocks or increasing catastrophic claims.
- Expense overruns.
- Prolonged low-interest rate environment and equity market volatility.
- Slower-than-expected topline growth for ZA Bank and margin deterioration.
Analyst Ratings
- CMBIGM Rating: BUY
- Potential Return: Over 15% over next 12 months.
Related Reports
- Net earnings weakened in 2H; ZA Bank hit first full-year profit, Mar 24, 2026
- 1H earnings a clear beat; ZA Bank turned profit faster than expected; raise TP to HK$23, Aug 26, 2025
- Placement may cause limited downside despite short-term volatilities, Jun 26, 2025
- HK Stablecoins outlook opens up the headroom for valuation re-rating: uplift TP to HK$20.4, Jun 3 2025
- Tech export out of the red; ZA Bank on track for breakeven, 24 Mar 2025
- Digital lifestyle leading growth; ZA Bank and technology export breakeven on track, 28 Mar 2024
Shareholding Structure
| Shareholder |
% Ownership |
| Ping An Insurance Group |
9.2% |
| Shenzhen Jiadexin Inv Co Ltd |
8.2% |
Stock Data
| Metric |
Value (HK$) |
| Market Cap (mn) |
17,224.3 |
| Avg 3 mths t/o (mn) |
99.1 |
| 52w High/Low |
20.20/9.00 |
| Total Issued Shares (mn) |
1,577.3 |
Share Performance
| Period |
Absolute |
Relative |
| 1-mth |
2.6% |
0.4% |
| 3-mth |
2.7% |
3.1% |
| 6-mth |
-30.6% |
-27.2% |
