GF Securities gives a "Buy" rating: China Taiping (00966) net profit surges by 221%, dividends increase 3.5 times, is the valuation still undervalued?

Zhitong Finance APP learned that China Taiping (00966) has delivered an above-expected annual report: in 2025, attributable net profit surged 220.9% year over year. Dividend per share jumped from HK$0.35 to HK$1.23, an increase of more than 250%. A research report released by GF Securities said the company has significantly increased its dividend payout, far exceeding market expectations, demonstrating management’s strong confidence in future business growth and solvency. The company has taken the lead in rolling out a transformation toward dividend-focused insurance products, and the product-structure adjustment pressure for 2026 has basically been absorbed. Using the EV method to assign a 0.45x PEV valuation, the stock’s fair value is HK$29.34 per share, and a “Buy” rating is given.

GF Securities believes there are two key drivers behind the earnings surge: first, investment business profit grew 150% year over year; narrowing underwriting financial losses by 14% has led to a clear improvement in investment performance. Second, optimization in tax treatment lowered the tax rate from 42.2% to -9.5%; a large amount of tax-exempt income was released, resulting in a tax reversal.

The value side is also steady. New business value (NBV) increased 5.3% year over year, and the NBV margin rose to 21.3%. Embedded value (EV) grew 19.8% year over year, with its growth rate leading peers. The positive contribution of investment deviation to EV increased sharply from 1.1% to 8.6%. The company’s net assets grew 33.9% year over year, and its balance sheet continues to improve.