The high dividend and undervaluation allocation value of Sunshine Insurance (06963), which delivered steady performance during a period of pressure in the industry, highlighted the high dividend and undervaluation allocation value

In recent years, China's insurance industry has accelerated its transformation to high-quality development centered on value creation under the new “Ten Rules of the Country” policy in 2024. The industry has initially completed the restructuring of its development logic in nearly two years.

However, in the first half of 2026, this transformation entered a period of substantial stress testing. The pressure stems from the resonance of multiple factors: first, low interest rates are compounded by the full implementation of new insurance contract guidelines, and interest rate fluctuations have intensified the impact on both sides of capital; the second is the implementation of the second phase of “repayment” to further tighten capital constraints; the third is that the debt side deepens “integration of reporting”, lowers dividend insurance demo interest rates, and expands the negative product list, and continues to be pressured on the three sides of the cost, cost, and product.

Under such changes in the industry, Sunshine Insurance (06963), which handed over steady performance, is a sample worth observing. According to the 2026 interim financial report released by the company on August 28, Sunshine Insurance's total premium income during the reporting period was 90,906 billion yuan, up 12.5% year on year; net profit to mother was 4.694 billion yuan, up 38.5% year on year; the group included value of 124.93 billion yuan, up 7.2% from the end of the previous year, and total assets of 702,834 billion yuan, up 4.4% year on year.

The achievement of these interim results stemmed from Sunshine Insurance's keen insight into industry trends and early layout. The company took the initiative to internalize external supervision into its own business strategy and continued to further advance the “New Sunshine” strategy. This enabled it to show strategic strength and operational resilience when the industry faced multiple pressures, stabilized the basic operating market, and opened up space for subsequent value release and structural optimization. Its value in the capital market is also expected to be revalued.

Channel changes show the resilience of the life insurance business, and actuarial technology runs through the entire financial insurance chain

Since 2026, compliance supervision in the insurance industry has continued to be upgraded, and a number of documents have been issued one after another to regulate the development of the industry. Among them, in March, the Department of Personal Insurance Supervision of the General Administration of Financial Supervision issued the “Notice on Matters Relating to Further Strengthening the Management of Bank Agency Channel Fees” (Gold Life Insurance Letter (2026) No. 65), which was fully implemented on July 1.

As a further deepening of the “integration of bank reporting” banking insurance in August 2023, Document No. 65 upgraded fee control from “managing total commissions” to a “fee management structure”, with the aim of squeezing out the moisture of real expenses rather than shifting costs from the bright side to the dark side.

Under this constraint, the channel logic of the industry has substantially changed: the banking insurance channel has changed from “fighting for processing fees” to “deep integration of value ratio, service capabilities and banking ecology”; individual insurance channels have moved from “manpower tactics” to “team quality”, and the scale of hedging has shrunk with increasing core human capacity.

In this accelerated shift in industry logic, Sunshine Insurance has shown obvious development resilience as early as 2025 during the promotion period of “integrated reporting and banking” regulations as early as 2025. In the context of the further deepening of the “integration of reporting and banking” in the first half of 2026, the company's coping ideas and operating performance have typical observational value.

During the reporting period, Sunshine Life insisted on “putting equal emphasis on both banks” and used a differentiated model to match the needs of the customer base; Sunshine Financial Insurance used the “Life Watch Project” as the core gripper to improve risk pricing and cost management capabilities, thus allowing the company to show strong initiative in dealing with this round of deepening supervision.

Specifically, individual insurance firmly promoted high-quality development and transformation, deepened the “one body, two wings” strategy, strengthened customer management capacity building, implemented the “five-step customer management method” standardized operation process, upgraded the hierarchical management and cultivation system of teams, and improved operational efficiency. The per capita production capacity of individual insurance activities was 37,000 yuan, an increase of 31.3% over the previous year.

After a marked increase in per capita production capacity, the company's personal insurance achieved total premium income of 18.52 billion yuan during the reporting period, an increase of 20.7% over the previous year, including 4.62 billion yuan in new instalments of premiums, an increase of 60.0% over the previous year.

The banking insurance business, on the other hand, anchors the main value line. The channel side consolidates superior channels, expands new strategic channels, and deepens ecological co-construction between outlets and teams; the team side optimizes quality and implements hierarchical management; the production and service side improves the service matrix for all categories and multiple levels of products. In the first half of the year, the total premiums of banking insurance were 44.68 billion yuan, an increase of 26.1% over the previous year; of these, the premiums for the new order size were 23.61 billion yuan, an increase of 83.4% over the previous year, and the production capacity per person active was 154,000 yuan.

At the financial insurance level, Sunshine Insurance uses the “three life tables” as the center to integrate accurate pricing and resource allocation capabilities throughout the auto insurance, non-car insurance, and agricultural insurance sectors to promote the transformation of operations from “scale-driven” to “risk screening, structural optimization, and value creation.” The essence of this layout is to upgrade actuarial technology to run through the entire chain of financial insurance products, channels, claims processing, and services.

During the reporting period, the original premium income of financial insurance (excluding guarantee insurance) was 24.012 billion yuan, up 5.3% year on year, and net profit was 800 million yuan, up 55.1% year on year. Furthermore, the car insurance structure continues to be optimized, and the share of premiums for family cars and new energy vehicles has increased.

Build an “anti-fragile” asset allocation system and accelerate the joint layout of assets and liabilities

Deepening the “integration of reporting and banking” not only impacted the channel side, but also affected the profit side. As “integration of reporting and banking” deepens rigid restrictions on the cost side, directly cuts off the profit source of fee spreads, compounded by the pressure on interest spreads and losses brought about by the current low interest rate environment, and the full implementation of the new accounting standards amplifying the impact of asset fluctuations on profits, as well as multi-dimensional pressures such as repayment of second-generation two-phase installments and imposing hard capital constraints on alternative investments, debt-side expansion can no longer cover up asset-side shortcomings. “Linked asset liability management” has changed from a strategic slogan to a hard constraint relating to survival.

Faced with this pressure, Sunshine Asset Management's coping logic is not passive defense, but rather uses balance and liability matching as the center to build an “anti-fragile” asset allocation system — one end locks in interest rate spreads safety cushions through long-term interest rate bonds and smoothes profit fluctuations under the new principles of amortization costs and high-dividend OCI assets; the other end uses countercyclical first-level market layout and reserves in the direction of new quality productivity to expand profit boundaries on the premise of controlling pullback. This three-tier structure of “fixed income matches liabilities, equity increases to hedge against inflation, and accounting classification management fluctuations” essentially finds a dynamic optimal solution between capital constraints and profit targets.

Based on this “anti-fragility” asset allocation system, in the first half of 2026, Sunshine Insurance's total asset management scale reached 667.76 billion yuan, an increase of 4.3% over the end of the previous year; it achieved a total investment income of 12.43 billion yuan, an increase of 16.2% over the previous year.

Further, Sunshine Asset Management's ability has surpassed “managing one's own money”. It is evolving into a market-based asset management platform — the multi-asset and multi-strategy system supports the resilient growth of third-party businesses, and has been selected as one of the IPE Global 500 (250th in the world in 2026, 50th in China) for four consecutive years, indicating that its asset management capabilities already have export value. Third-party assets were managed on trust during the reporting period of 191,015 billion yuan.

At the same time, the company's debt business is deeply embedded in national strategies such as Beijing-Tianjin-Hebei collaboration, advanced manufacturing, and the “Belt and Road”, which not only obtained long-term stable returns, but also upgraded insurance funds from “financial investors” to “patient capital of the real economy”, establishing the unique coordinates of medium-sized insurers in the “Five Major Articles” of finance.

Deeply cultivate customer needs throughout the life cycle and build barriers to differentiation

As the transformation and transformation of the industry continues to deepen, the underlying logic of the industry has begun to fundamentally shift, and the dilemma that the development path under the old “scale-driven” model gradually fails has become more prominent. Building long-term differentiated competitiveness under the new industry situation has become a must-answer strategic question for the long-term development of medium-sized insurers.

However, in this performance of Sunshine Insurance, the answers given by Sunshine Insurance have become more and more clear, that is, to establish a closed loop of “sales-product-service” collaboration in customer operations. This is also one of the key supports that Sunshine Insurance can continue to develop steadily under multiple pressures in the development of the industry.

During the reporting period, Sunshine Insurance was guided by accurate insight and actively meeting the differentiated needs of customers throughout the life cycle to create a closed loop of customer operations linked to sales, products and services. Specifically, Sunshine Life deepens the “Smart Sunshine” strategy: the sales side enhances middle and high customer operations, and the product side relies on the “three five seven” system to cover “one older, one less, one higher”.

Among them, the Yinfa Customer Group promotes “annuity and long-term care” scenario-based products, the children's customer group promotes exclusive critical illness insurance, and the high-net-worth customer group establishes an agile customization mechanism; the service side continues to iterate in the fields of health, pension, and education. Health focuses on launching 22 new services, and the elderly has built a multi-level ecological matrix, and education provides a full plan for further education.

Sunshine Financial Insurance upgrades customer management top-level design: individual clients, transforming teams into all-round insurance consultants. The product revolves around high-frequency scenarios such as travel and health, and promotes the transformation of car insurance customers to comprehensive coverage. Claim robots are online 7 x 24 hours a day, and satisfaction is stable at least 9 points; group clients, “partnership actions” have been implemented in depth, completing the iteration of the ABCD classification system, and risk reduction services in segments such as hotels, warehousing, and onshore wind power doubled year-on-year, creating “online monitoring+offline response”.

By deepening the needs of customers throughout the life cycle, Sunshine Insurance can transform a one-time sales relationship into long-term customer value management. This allows the company to build a sustainable source of death and fee differences on the debt side and build a differentiated advantage other than cost competition on the channel side, thus taking an active position in the inevitable trend of the industry shifting from “selling insurance policies” to “selling full-cycle risk services.”

Summary:

Sunshine Insurance has proven with steady performance that during the painful period when the industry is moving towards high-quality development, the company has the ability to cross the cycle with differentiated competitive advantages. This performance is triggering the capital market to re-examine the investment value of Sunshine Insurance, and several brokerage firm research reports have provided strong supporting evidence.

Among them, Orient Securities said that Sunshine Life Insurance's banking insurance is driving rapid growth in new orders and NBV, improving underwriting profits in the core financial insurance business, and increasing investment asset expansion and equity allocation to enhance income elasticity. It gave Sunshine Insurance a “buy” rating based on expectations that the fundamentals of Sunshine Insurance will continue to improve. The target price is HK$5.35, which has room for a significant increase from the closing price of HK$3.45 on August 28.

However, the typical characteristics of “high dividend+undervaluation” make Sunshine Insurance's allocation value even more prominent. Sunshine Insurance paid out RMB 0.19 per share in 2025, with a dividend rate of 34.65%, which remained stable for four consecutive years; based on the stock price at the end of August 2026, the TTM dividend rate was about 6.3%, which is the highest among H-share listed insurers. While it has high dividends, the undervaluation characteristics of Sunshine Insurance are also remarkable. Societe Generale Securities said that Sunshine Insurance's current PEV is only 0.27, which is in the historical 23% fraction, and the configuration is relatively cost-effective.