PICC Group has announced its 3Q26 results: for 9M26, the attributable net profit (NP) fell by 32% YoY to RMB31,817mn, with a 3Q26 attributable net loss of RMB4,928mn (vs. an attributable NP of RMB20,292mn in 3Q25), due to capital market volatility. On the investment side, the 9M26 unannualized total investment yield was 3.5%, down from 3.7% in 1H26, affected by equity market fluctuations. On the liability side, 3Q26 first-year premiums (FYP) for life and health (L&H) insurance grew by 2.4% YoY to RMB20,311mn, driven by single-premium life insurance business. PICC P&C’s 9M26 combined ratio (COR) improved by 0.3pp YoY to 95.8%, with underwriting performance remaining resilient. Considering the company’s sustained P&C underwriting advantages, we maintain BUY on both the A- and H-shares.
L&H insurance: new business sales under pressure
For 3Q26, PICC Life’s FYP grew by 12% YoY to RMB15.1bn, driven by single-premium growth (+331% YoY), while regular-pay premiums fell by 63% YoY, reflecting growth pressure from a high base in 3Q25 and the impact of Circular 65 on bancassurance. For 3Q26, PICC Health’s FYP fell by 18% YoY to RMB5.2bn, with both single-premium and regular-pay FYP declining, also affected by the high base in 3Q25. The company did not disclose the growth rate of new business value (NBV); we estimate that 3Q26 performance was under pressure. Profit wise, PICC Life’s 3Q26 NP turned from a profit of RMB7,112mn for 3Q25 to a loss of RMB3,471mn, and PICC Health turned from a profit of RMB2,728mn for 3Q25 to a loss of RMB1,801mn, owing to capital market volatility, with single-quarter profitability constrained. We expect the company’s 2026 L&H insurance NBV to decline by 2% YoY.
Earnings forecasts and valuation
Factoring in volatile investment returns, we cut our 2026/2027/2028 EPS forecasts by 52/19/20% to RMB0.59/0.89/0.95, and lower our DCF-based A-/H-share target prices to RMB9.20/HKD7.20 (previous: RMB10.0/HKD8.0). Considering the favorable growth prospects of the L&H insurance business and sound P&C underwriting performance, we maintain BUY on both the A- and H-shares.
Risks: Slower NBV growth than we expect, slowed P&C premium growth, a sharp COR hike, and heavy investment losses.