CITIC Construction Investment: The insurance sector is currently experiencing a resonance of both capital and liabilities, with significant long-term allocation value

CITIC Construction Investment Research reports indicate that, against the backdrop of a large amount of deposits maturing recently, savings insurance represented by dividend insurance is expected to continue meeting residents’ long-term stable wealth appreciation needs due to its high returns and long-term nature. Coupled with leading insurance companies seizing the opportunity to improve the value rate of bancassurance and increasing their布局, this is likely to drive rapid growth in new policies and NBV. On the asset side, we are optimistic about the spring rally in equity markets boosting profits, while the stabilization and rebound of interest rates support the long-term return center of insurance funds. Additionally, the high growth rate of NBV is expected to remain robust, potentially leading to continuous valuation uplift.

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CITIC Construction Investment: How to View the Current Investment Value of Insurance Stocks?

Recently, with a large amount of deposits maturing successively, savings insurance represented by dividend insurance is expected to continue meeting residents’ long-term stable wealth appreciation needs due to its higher returns and longer terms. Combined with leading insurance companies seizing the opportunity to improve the value rate of bancassurance and increasing their布局, this is likely to drive rapid growth in new policies and NBV. On the asset side, we are optimistic about the spring rally in equity markets increasing profits, while the stabilization and rebound of interest rates support the long-term return center of insurance funds. Additionally, the high growth rate of NBV is expected to remain high, potentially leading to continuous valuation uplift.

Securities: Currently, the valuation of the brokerage sector is at a historic low, with clear policy dividends, and is expected to experience a double boost of valuation recovery and performance growth by 2026. The annualized ROE of listed brokerages reached 7.1% in the first three quarters of 2025. Corresponding PB valuations peaked at 1.60x in August, at 1.47x at the end of Q3, and at 1.36x on February 6, significantly below the valuation range at the same ROE historically, indicating clear room for recovery. Loose monetary policy and foreign capital inflows are injecting incremental funds, while the focus of the “14th Five-Year Plan” on technological breakthroughs and domestic demand recovery is driving corporate earnings rebound. Coupled with deepening capital market reforms boosting confidence, policy measures will fully activate market trading enthusiasm. We particularly recommend three types of brokerages with differentiated competitive advantages: first, leading brokerages with international business and significant valuation recovery space; second, brokerages with a high proportion of large asset management businesses and resilient performance; third, industry leaders with strong comprehensive strength and balanced业务线.

Insurance: The insurance sector is currently experiencing a resonance of both capital and liability improvements, which may realize a double boost of performance growth and valuation recovery, with significant long-term investment value. From a product perspective, against the backdrop of a large amount of deposits maturing successively, savings insurance represented by dividend insurance is expected to continue meeting residents’ long-term stable wealth appreciation needs due to its higher returns and longer terms, supporting rapid growth in new policies and NBV, with the “opening red” performance potentially exceeding expectations. In 2025, life insurance companies’ premiums are expected to increase by 11.4% year-on-year. From a channel perspective, the “reporting and banking integration” has significantly improved the value rate of bancassurance channels, leading leading insurers to continue expanding布局, with the bancassurance channel’s liability growth being a key factor. On the asset side, we are optimistic about the spring rally in equity markets enhancing investment performance. Strategic investors’ policy benefits broaden the channels for insurance funds’ equity allocation, potentially allowing more favorable purchase prices through locked-in issuance, and using OCI stocks or equity method measurement can effectively avoid profit fluctuations caused by market volatility. Regarding valuation, the stabilization and rebound of interest rates are expected to lead to revaluation of existing business value, while the strong demand for savings insurance may raise the future NBV growth center. Under the resonance of existing and new业务, there is still room for valuation uplift of listed insurance companies.

(Source: Yicai)