Ping An Q1 Preview: Solid operations, market volatility pressure net profit

Overview

This report is UBS's preview of Ping An Insurance (Group)'s Q1 2026 results. The company plans to release its first-quarter earnings after the market close on April 28, 2026. UBS believes operating trends remain solid, with life insurance, asset management, and banking supporting OPAT growth, while weak equity market performance will weigh on NPAT.

Core views

The core view is that the operating fundamentals are better than the accounting earnings: on the one hand, life insurance CSM is supported by a more stable interest-rate environment, AUM for insurance funds continues to expand, banking is expected to resume earnings growth, and the asset management segment is also supported by cross-checks related to Ping An Securities; on the other hand, weak equity markets pressure group NPAT. UBS believes Ping An Insurance is more resilient than peers, owing to a relatively high share of FVOCI within its equity holdings and a lower base.

Analysis framework

The report analyzes Q1 earnings expectations, life insurance new business value, P&C combined ratio, investment portfolio allocation, valuation, and risks, and evaluates investment attractiveness using OPAT, NPAT, VNB, P/B, P/OPAT, dividend yield, and an SOTP valuation framework.

Methodology notes

• Valuation methodsSOTP

  sum-of-the-parts valuation

  UBS uses the SOTP method to value Ping An Insurance, reflecting the value of its different business segments such as insurance, banking, investments, and asset management.

• Valuation methodsP/B

  price-to-book ratio

  The report notes that Ping An's A shares trade at 0.94x P/B and, together with a mid-teens long-term ROE, the valuation is considered attractive.

• Valuation methodsP/OPAT

  price-to-operating profit ratio

  The report uses 12-month forward P/OPAT to assess operating profit valuation; Ping An stands at 6.6x, corresponding to an approximately 10% CAGR in OPAT from 2025E to 2030E.

• Insurance operationsVNB

  new business value

  UBS expects Q1 2026 VNB to grow 20% year on year, with strong new business sales offsetting part of the margin pressure.

• Insurance operationsCombined Ratio

  property & casualty combined ratio

  UBS expects the P&C combined ratio to improve by 0.5 percentage points year on year to 96.1%, benefiting from better cost and operating efficiency and lower natural catastrophe losses.

Asset mapping & comparison

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

• Ping An Insurance (Group) A-share 601318.SS

  core coverage name

  Strengths

  Solid OPAT growth, high VNB growth, improving P&C combined ratio, and attractive valuation and dividend yield.

  Weaknesses

  NPAT is dragged by the decline in equity markets, and life insurance margins are affected by product mix and actuarial assumption changes.

  Comparison

  With 57% of equity holdings in FVOCI, above the 19%-37% range of major peers, net profit is more resilient than peers.

  Risks

  Credit risk, weaker-than-expected NBV, intensified P&C competition, property-sector risks, volatility in investment returns, and solvency risk.

• Insurance funds equity assets

  an important asset allocation that affects investment returns and NPAT volatility

  Strengths

  The company maintains a balanced equity strategy between FVTPL and FVOCI, and between growth and value, while focusing on high-dividend, low-volatility portfolios.

  Weaknesses

  Weak equity markets directly suppress investment returns and group NPAT.

  Comparison

  The high-dividend portfolio uses the CSI Dividend Low Volatility Index as an important reference benchmark.

  Risks

  Market declines, rising volatility, and valuation adjustments to equity assets.

• Gold allocation

  a potential supplementary allocation asset

  Strengths

  Current gold exposure is very small and still below the regulatory cap of 1%, leaving room for opportunistic additions.

  Weaknesses

  The report does not indicate that gold allocation has become a major source of earnings.

  Comparison

  Compared with equity assets, gold allocation remains at a very low level.

  Risks

  Gold price volatility, regulatory limits, and timing risk for allocation.

Key data

• Report date2026-04-13UBS Global Research publication date.
• Expected earnings release date2026-04-28Ping An plans to release its Q1 2026 results after the close.
• 12-month ratingBuyUBS maintains a Buy rating.
• Target priceRmb84.10The report says the target price is maintained.
• Current priceRmb57.75Price as of April 13, 2026.
• Expected group OPAT growthQ1 2026 year on year +5%Driven by life insurance, asset management, and banking.
• Expected group NPAT changedecline by a mid-to-high single-digit percentage year on yearMainly dragged by weakness in equity markets.
• Expected VNB growthQ1 2026 year on year +20%Strong new business sales offset part of the margin pressure.
• Expected P&C combined ratio96.1%Down 0.5 percentage points year on year.
• Equity financial assets as a share of insurance funds22%The company believes this ratio is unlikely to rise materially.
• FVOCI share of equity holdings57%Above the 19%-37% range of major peers, supporting NPAT resilience.
• 2026E dividend yield4.9%A-share basis; the report views the dividend policy as clear.

Impact & implications

The investment implication of the report is mildly positive: short-term accounting net profit is affected by capital market volatility, but operating profit, new business value, and P&C underwriting efficiency still show resilience; if equity markets stabilize, OPAT growth accelerates, and the dividend policy remains clear, there is still room for valuation re-rating.

Risks

• Credit risk is more prominent than systemic risk.
• NBV growth in life insurance falls short of expectations.
• P&C underwriting losses emerge due to intensified competition.
• A worsening property-sector crisis.
• Changes in capital or solvency regulatory requirements.
• Investment return volatility affects embedded value assumptions.
• Natural catastrophe risk.
• Surrender pressure caused by interest-rate volatility.
• Asset-liability duration mismatch.
• Channel and product risks.
• Insufficient solvency risk.

What to watch

• Actual OPAT, NPAT, and VNB performance in the Q1 2026 results on April 28, 2026.
• Whether life insurance new business sales can continue to offset margin pressure.
• Whether the P&C combined ratio falls to 96.1% as expected.
• Equity market performance and its impact on NPAT and NAV.
• Changes in FVOCI and FVTPL allocation within equity assets.
• Whether there are signs of increased allocation to the high-dividend, low-volatility portfolio and gold.
• The pace of earnings recovery at Ping An Bank and Ping An Securities' contribution to the asset management segment.