Performance Overview: Overall performance meets expectations. 1) Net profit attributable to shareholders in H1 2025 increased 11.0% year-on-year to 27.885 billion yuan, primarily benefiting from a 1.5% year-on-year growth in total investment income, with TPL assets and OCI bonds realizing floating gains of 4.739 billion yuan and 2.327 billion yuan respectively, slightly exceeding expectations. 2) OPAT increased 7.1% year-on-year, slightly above expectations. 3) NBV under retrospective accounting increased 32.3% year-on-year to 9.544 billion yuan, mainly driven by enhanced contribution from bancassurance channels boosting overall NBV growth, meeting expectations. 4) EV increased 4.7% from the beginning of the year, in line with expectations. 5) CSM increased 1.2% from the end of last year, with new CSM up 21.4% compared to the same period, slightly exceeding expectations.

Life Insurance New Business Shows Significant Growth, Bancassurance Channel Contribution Enhanced. 1) New business premiums increased 28.5% year-on-year, with individual and bancassurance new business premiums growing -7.7% and +107.7% respectively year-on-year, with bancassurance new business proportion surpassing individual insurance. Individual insurance and bancassurance channel NBV changed -2.5% and +156.0% year-on-year respectively, with proportions changing -21.4pct and +18.2pct year-on-year to 60.0% and 37.8%. 2) Agent workforce expanded with monthly average headcount of 183,000, end-of-H1 2025 headcount of 186,000, new additions of 39,000, up 19.8% year-on-year. 3) Core agent workforce and core agent income contracted but productivity improved. Monthly average core agents totaled 49,000, down 18% year-on-year, with core agent monthly average FYC reaching 7,120 yuan, down 13.4% year-on-year. Core agent monthly average FYP increased 12.7% year-on-year. 4) Bancassurance regular premium new business increased 58.6% year-on-year, with regular premiums accounting for 30.4% of new business; bancassurance value rate improved by 2.3pct. 5) 13-month and 25-month policy persistency rates were -0.3pct and +2.8pct year-on-year to 96.6% and 94.5% respectively, demonstrating excellent business quality.

Non-Auto Insurance Growth Under Pressure, COR Improves Year-on-Year. 1) Property insurance premiums increased 0.9% year-on-year, with auto insurance and non-auto insurance growing 2.8% and -0.8% respectively year-on-year. Among non-auto lines, liability insurance, health insurance, agricultural insurance, and commercial property insurance grew 3.3%, -3.8%, 4.7%, and 11.9% respectively year-on-year. Health insurance showed negative growth compared to the same period, being the main drag on non-auto growth speed. Underwriting profit increased 30.9% year-on-year to 3.55 billion yuan. 2) COR improved 0.8pct year-on-year to 96.3%, with expense ratio down 0.7pct year-on-year to 26.8% and loss ratio down 0.1pct year-on-year to 69.5%. Auto insurance COR improved 1.8pct year-on-year to 95.3%, while non-auto COR deteriorated 0.4pct year-on-year to 97.6%. Excluding personal credit guarantee insurance, non-auto insurance COR improved 2.3pct year-on-year to 94.8%. Agricultural insurance, liability insurance, health insurance, and commercial property insurance all achieved underwriting profitability, with health insurance turning from loss to profit and commercial property insurance further improving profitability.

Continued Allocation to OCI High-Dividend Stocks, Investment Yield Declines. 1) H1 2025 FVOCI equity scale increased 25.9% from year-end to 95.719 billion yuan, with proportion of total equities rising 4pct to 33.8%. 2) NII, TII, and CII (all non-annualized) decreased 0.1pct, 0.4pct, and 0.6pct year-on-year to 1.7%, 2.3%, and 2.4% respectively. The decline in TII and CII was mainly due to the impact of decreased fair value changes in fixed-income assets measured at fair value through profit or loss in the current period compared to the same period last year. 3) Estimated full-year OCI equity instrument investments (including high-dividend, preferred shares, perpetual bonds, etc.) price appreciation of approximately +1.7%, down 5.2pct year-on-year; other debt instruments price appreciation of approximately +0.4%, down 4.8pct year-on-year.

Investment Recommendation: In the short term, the agent channel on the liability side is significantly impacted by high base effects and predetermined interest rate adjustments, while bancassurance new business contribution surpasses individual insurance. Under comprehensive promotion of branch deepening, it may maintain high growth and provide strong support for overall value. We expect continued improvement in new business, with 2025 NBV potentially maintaining positive growth momentum. In the long term, the dual-engine model of individual insurance and bancassurance is gradually taking shape, with sustainable value growth anticipated. Current CPIC A-share and H-share PEV ratios are 0.63x and 0.51x respectively, with dividend yields of 2.7% and 3.4% respectively.

Risk Warning: Significant decline in long-term interest rates, substantial equity market retreat, new business sales significantly below expectations.

Contact: Tang Liangliang (18205587358)

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Note: The reports in this article are based on research reports publicly released by Industrial Securities Economic and Financial Research Institute. For specific report content and related risk warnings, please refer to the complete version of the report.

Securities Research Report: "CPIC 2025 Interim Report Review: Investment-Driven Net Profit Slightly Exceeds Expectations, Bancassurance Value Contribution Significantly Enhanced"

External Release Date: August 30, 2025

Report Issuing Institution: Industrial Securities Co., Ltd. (licensed for securities investment advisory business by China Securities Regulatory Commission)

Report Analyst: Tang Liangliang S0190523080002

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