Institutions expect listed insurers to hit full-year earnings trough in Q3, advise seizing window to build positions at low levels

21世纪经济··CN·Read original
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Affected by A-share volatility in the third quarter and a high base in the same period last year, institutions including JPMorgan and Huatai Securities expect listed insurers' third-quarter earnings this year to face phased pressure and likely mark the full-year earnings trough. Huatai Securities expects major listed insurers' pre-tax profits in the third quarter may fall into losses, with combined pre-tax losses of 109.6 billion yuan under an optimistic scenario and 200.2 billion yuan under a conservative scenario, while the median year-on-year decline in pre-tax profits for the first three quarters is roughly between 27% and 73%. JPMorgan forecasts the industry's third-quarter net profit may fall 53% year-on-year, after a sharp 223% increase in the second quarter. Institutions stress that the profit fluctuations mainly stem from unrealised gains and losses in equity markets rather than deterioration in core business, and thanks to relatively high profit accumulation in the first half, companies overall are still expected to remain profitable in the first three quarters. Divergence among individual stocks is clear: JPMorgan expects China Life Insurance and New China Life Insurance's net profits to fall 89% and 70% year-on-year respectively, while Huatai Securities predicts Ping An Insurance and China Pacific Insurance will deliver relatively better third-quarter earnings. JPMorgan recommends using market weakness as an opportunity to add positions in Ping An Insurance and China Life Insurance, and expects major insurers' new business value to grow 22% year-on-year in 2026.

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