Ping An posted solid 1Q results, with Group OPAT up 7.6% YoY to RMB40.8bn, outpacing our estimate of RMB39.2bn (link). This increase can be attributed to 1) a resilient L&H OPAT uptrend (+4.6% vs CMBI est: +4.5%); 2) PAB profit turnaround (+3.0%); and 3) a notable surge in AM profitability (+193.3%). Group NPAT fell 7.4% YoY to RMB25bn, slightly better than our estimate of RMB24.3bn, due to heightened market headwinds in 1Q26. Group net asset value (NAV) grew 1.8% from year-start to RMB1.02tn, in line with our forecast. Life NBV grew 20.8% YoY to RMB15.6bn (vs. CMBI est: RMB15.4bn), primarily driven by new business sales (+45.5% YoY) partially offset by a softening margin (-4.8pct YoY). P&C UW performance was a beat, with COR down 0.8pct YoY to 95.8% and non-auto premium rising 19.5% YoY, which exceeded the industry average growth of 5.3% YoY in 1Q26. Mgmt. mentioned in the call that achieving double-digit NBV growth in 2026E is a baseline target, and we are positive on a high-teens NBV uptick and life OPAT acceleration in 2026E as CSM approaches an inflection point. Maintain BUY, with our SOTP-based H/A-share TP at HK$86/RMB75, implying 0.83x FY26E P/EV.

1Q OPAT a slight beat, driven by L&H/PAB/AM. Group OPAT growth in 1Q26 was mainly driven by increases in Life & Health (+4.6%), Ping An Bank (+3.0%) and AM (+193.3%). L&H OPAT growth was broadly in line with our forecast, with new business CSM likely to achieve a promising rise amid stable interest rates. The banking business returned to positive growth, driven by 1) a stabilized NIM (1Q26: 1.79% vs FY25: 1.78%), and 2) non-interest income growth from wealth management and bond investments. AM OPAT amounted to RMB3.2bn in 1Q26, nearly tripling from 1Q25, thanks to upside from brokerage and asset management businesses amid heightened equity volatility, which bolstered trading activity. We maintain our view that continued easing of the AM drag and expected Life OPAT acceleration should drive the Group’s valuation re-rating over time.

L&H OPAT in-line; NBV rose on higher new business sales. Life NBV grew 20.8% YoY to RMB15.6bn, driven by strong new policy sales (+45.5%) partially offset by a 4.8pct YoY decline in margin to 23.5%. Mgmt. noted that this margin contraction was not due to product or channel skewness, but rather the fact that the comparable 1Q25 figures were not adjusted for changes in actuarial assumptions. Overall, NBV margin stood stable vs. the year-start level of 23.4%. Bancassurance was the leading channel for NBV growth, with its contribution (together with community finance) rising 6.8pct YoY to 31% in 1Q26. Agent headcount declined 5.4% from year-start to 0.33mn, partly due to seasonality. We expect NBV to reach high-teens YoY growth in 2026E led by new biz sales.

P&C underwriting beat; OPAT weighed by investment. P&C COR improved 0.8pct YoY to 95.8% in 1Q26, better than our estimate of 96.1%, due to lower NAT CAT claims and continued expense rate controls across non-auto insurance lines. Total premium rose 6.8% YoY to RMB91bn, with auto insurance down 0.6% YoY to RMB53bn and non-auto up 19.5% YoY to RMB38bn in 1Q26. Per mgmt., non-auto premium growth was mainly driven by health insurance. UW profit grew 28.4% YoY to RMB3.5bn, but this was partially offset by a decline in investment returns, resulting in a 13.4% YoY decrease in P&C OPAT in 1Q26.

Maintain BUY with TP of HK$86/RMB75. The stock is trading at 0.6x FY26E P/EV and 0.8x FY26E P/B. We are positive on the prospect of Ping An’s core business improvement, including 1) Life OPAT acceleration in 2026E as CSM approaches the inflection; 2) PAB profit enhancement; and 3) ongoing progress on AM derisking. Maintain BUY with our SOTP-based TP at HK$86 (H-share, unchanged) and RMB75 (A-share, added), implying 0.83x FY26E P/EV and 1.2x FY26E P/B.

Stable NIY; CIY recorded a larger decline. In 1Q26, NIY was broadly stable at 0.8% (unannualized) vs. 0.9% in 1Q25, boding well for a stabilized trend in market interest rate. CIY posted a larger decline of 1.1pct YoY to 0.2% (unannualized), mainly due to heightened equity market headwinds in 1Q. Total investment assets remained stable at ~RMB6.55tn, up 0.9% from year-start.

Catalysts: 1) Life CSM release and balance growth inflection in 2026E; 2) continued AM OPAT outperformance led by faster-than-expected de-risking progress; 3) accelerating OPAT payout ratio growth; 4) significant rallies in equity markets; 5) new protection-typed product rollouts, i.e. participating critical illness.

Key risks: 1) regulatory tightening on life insurance and financial conglomerates; 2) heightened equity market volatility; 3) prolonged low-interest rate environment; 4) intensified pricing competition in P&C industry; 5) asset quality deterioration; and 6) a significant decline in Group capital level weighing on DPS growth, etc.

Ping An-H (2318 HK): We derive our price target of HK$86 for Ping An-H (2318 HK) based on SOTP, assuming a 12.5% cost of capital and 2.5% terminal growth rate. Our valuation includes 1) 1.3x Life EV, based on ~13% average ROEV in FY26-28E; 2) 0.9x book value (BV) for Ping An P&C; 3) 0.6x BV for PAB; 4) 1.0x BV for AM and other segments; 5) HK$0.8 per share for finance enablement businesses based on P/B-ROE; and 6) a 15% Group conglomerate discount. Our TP implies 0.83x FY26E P/EV and 1.2x FY26E P/B, vs. currently trading at 0.6x FY26E P/EV and 0.8x FY26E P/B.

Ping An-A (601318 HK): We derive our price target of RMB75 for Ping An-A (601318 CH) based on SOTP and by applying a CNY/HKD exchange rate of 1.09 and an H/A discount of 7% referring to an average of year-to-date trading. Our TP implies 0.83x FY26E P/EV and 1.2x FY26E P/B, vs. currently trading at 0.6x FY26E P/EV and 0.9x FY26E P/B.

Investment thesis: Ping An is in the advanced phase of de-risking its property exposure, and with consecutive provisions being made for the AM segment, we expect the AM drag to ease further, which could drive the Group’s valuation rerating over time. As of FY25, the operating loss from AM segment narrowed significantly to RMB3.8bn from RMB11.9bn in the prior year. We believe continued improvement in its core business performance should support a share price re-rating, alongside mgmt.’s focus on shareholder returns and an enhanced balance sheet. We like Ping An for its resilient growth recovery driven by 1) Life OPAT growth acceleration in 2026E, as CSM release approaches an inflection point; 2) continued progress on AM de-risking; and 3) an advanced deployment in technology and the buildout of a healthcare and elderly care ecosystem. We see Ping An as a pioneer in life insurance reform, and expect intra-Group cooperation to further drive synergies and operational efficiency.

Company description: Founded in 1988, Ping An is a leading financial conglomerate with businesses spanning life and P&C insurance, pension, banking, brokerage, trust, and other financial services. The company pursues a technology-empowered growth strategy across core financial businesses of insurance, banking, brokerage, and asset management. As of FY25, Ping An ranked as the second-largest Life and P&C insurers in China by written premiums. The banking business segment is operated by its subsidiary Ping An Bank (000001 CH, 58% Group stake), which has a focus on retail and SME businesses. Ping An Healthcare and Technology (1833 HK, 53% Group stake) was listed in May 2018 as China’s first listed internet-health company.