Ping An Insurance's 1Q26 operating profit and new business value remained solid; Buy rating maintained

Overview

This report is Goldman Sachs' review of Ping An Insurance Group's 1Q26 results. The core view is that although 1Q26 net profit fell 7% year-on-year due to weak equity markets and market volatility, operating profit, life insurance new business value, P&C underwriting performance, and solvency remained broadly solid, so the share price may react positively to the results.

Core views

Goldman Sachs maintains Buy ratings on Ping An Insurance's A-shares and H-shares. 1Q26 OPAT rose 8% year-on-year and was above consensus, mainly due to better-than-expected asset management profits and lower-than-expected consolidation adjustments; life insurance OPAT maintained 5% growth and NBV rose 21% year-on-year; the P&C combined ratio improved to 95.8%, while premium income grew 7% year-on-year. The decline in net profit mainly came from life insurance and P&C NPAT falling 41% and 13% year-on-year, respectively, but this impact had already been anticipated by the market and had limited effect on balance sheet strength.

Analysis framework

The report uses earnings breakdown, consensus comparison, segment profit analysis, solvency observation, and SOTP valuation methodology. Goldman Sachs compares actual 1Q26 results with the company's compiled consensus expectations and FY26E forecast progression, and on this basis slightly raises FY26E-FY28E earnings forecasts by 1%-4%. The target price is based on an SOTP framework, applying different valuation methods to life insurance, P&C insurance, and Ping An Bank.

Methodology notes

• Valuation methodsSOTP

  sum-of-the-parts valuation

  Goldman Sachs sets its 12-month target price using the SOTP method: life insurance is valued based on FY27E P/B and ROA forecasts, P&C insurance is valued based on FY27E ROE-implied P/B, and Ping An Bank is valued based on a target P/PPOP.

• factor_profileGS Factor Profile

  Goldman Sachs factor profile

  The GS Factor Profile compares a stock's relative position versus the market and industry peers across growth, financial returns, valuation multiples, and composite indicators. For financial stocks, it mainly uses metrics such as EPS, sales growth, ROE, P/E, P/B, and P/D.

• relative_ratingGoldman Sachs Buy/Neutral/Sell framework

  relative rating within the coverage universe

  A Buy rating indicates that the stock has higher total return potential relative to its coverage universe, and the price target usually includes price upside and expected dividends over the target-price time horizon.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• 2318.HK

  core covered H-share target

  Strengths

  Buy rating; target price HK$75; 1Q26 operating profit, new business value, and improved P&C underwriting support upside potential.

  Weaknesses

  Net profit declined year-on-year, with life insurance and P&C NPAT dragged by the equity market and a volatile environment.

  Comparison

  Versus the current price of HK$60.05, the target price implies 24.9% upside.

  Risks

  Further decline in operating profit or CSM, worsening sales mix, or investment losses/impairments in non-insurance businesses.

• 601318.SS

  A-share target of the same company under coverage

  Strengths

  Buy rating; target price Rmb77; valuation framework is consistent with the H-shares and benefits from the same fundamental improvements.

  Weaknesses

  Also exposed to volatility in life insurance profits, P&C earnings, and capital market uncertainty.

  Comparison

  Versus the current price of Rmb57.63, the target price implies 33.6% upside.

  Risks

  Share price and valuation may be affected by A-share market risk appetite, interest rates, and investment return volatility.

• Ping An Life

  main life insurance segment

  Strengths

  1Q26 OPAT rose 5% year-on-year, NBV rose 21% year-on-year, and new sales rose 46% year-on-year.

  Weaknesses

  1Q26 NPAT fell 41% year-on-year, and NBV margin declined due to end-FY25 assumption changes and a higher proportion of participating products.

  Comparison

  Goldman Sachs uses FY27E P/B for valuation, implying about 1.9X/2.4X for H-shares/A-shares.

  Risks

  Further deterioration in sales mix, increased sensitivity to interest rates and investment returns, and CSM decline.

• Ping An P&C

  P&C insurance segment

  Strengths

  Combined ratio improved to 95.8%, and gross written premiums grew 7% year-on-year, outperforming the industry's roughly flat trend.

  Weaknesses

  1Q26 NPAT fell 13% year-on-year.

  Comparison

  Goldman Sachs values it at about 1.0X P/B based on FY27E ROE of 12%.

  Risks

  Catastrophe losses, a worsening underwriting cycle, or rising loss ratios.

• Ping An Bank

  bank subsidiary and component of SOTP valuation

  Strengths

  1Q26 NPAT grew 3% year-on-year to Rmb8.4bn; FY26E-FY28E bank profit forecasts were raised by about 2%.

  Weaknesses

  The banking business may still be affected by the credit cycle and net interest margin.

  Comparison

  Goldman Sachs uses a target P/PPOP of 2.125X for valuation.

  Risks

  Deteriorating asset quality, rising credit costs, or bank valuation compression.

Key data

• 1Q26 OPATRmb40.8bn, +8% year-on-year3% above the company's compiled consensus forecast.
• 1Q26 net profitRmb25.0bn, -7% year-on-year3% above consensus; the decline mainly came from lower profits in life insurance and P&C insurance.
• Life insurance NBVRmb15.6bn, +21% year-on-yearDriven by 46% year-on-year growth in new sales, partly offset by an approximately 5 percentage point decline in NBV margin.
• P&C combined ratio95.8%, improved 0.8 percentage points year-on-yearThe improvement came from lower catastrophe-related losses, while premiums grew 7% year-on-year.
• Life insurance core solvency adequacy ratio131%Up about 8 percentage points quarter-on-quarter, and broadly stable after excluding the impact of a one-off deferred tax asset recognition.
• P&C core solvency adequacy ratio172%Basically stable compared with FY25's 174%.
• H-share target price and current priceTarget price HK$75.00; current price HK$60.05; upside 24.9%Prices as of the close on 2026-04-28.
• A-share target price and current priceTarget price Rmb77.00; current price Rmb57.63; upside 33.6%Prices as of the close on 2026-04-28.

Impact & implications

The report has a positive investment implication for Ping An Insurance: the decline in net profit does not change the view of operating resilience, and OPAT, NBV, and improved P&C underwriting provide support for valuation recovery. The asset management segment turning from a loss in FY25 to a profit in 1Q26 also helps ease market concerns about asset losses in non-insurance businesses. Keeping the target price unchanged indicates that Goldman Sachs believes the main upside thesis has been validated by the results, though the sustainability of capital markets, sales mix, and investment asset quality still needs to be monitored.

Risks

• Further decline in operating profit or CSM may constrain dividend growth.
• Continued deterioration in sales mix may increase future profit sensitivity to interest rates and investment returns.
• Further investment asset losses or impairments may emerge in non-insurance businesses such as banking and asset management.
• Weak equity markets and sustained market volatility may continue to drag on net profit.
• If the improvement in P&C underwriting cannot be sustained, the combined ratio may come under pressure again.

What to watch

• Whether the asset management segment can deliver a positive OPAT contribution for full-year FY26.
• Whether life insurance NBV growth can continue after the effects of assumption changes fade.
• Whether the core solvency of life insurance and P&C insurance remains stable.
• Whether the P&C combined ratio stays below 96% alongside premium growth.
• Progress in delivering the upgraded FY26E-FY28E earnings forecasts.
• The impact of capital market performance on net investment income and net profit.