PING AN

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Ping An 2026 Interim Results Press Conference

[AI Key Takeaways]

Financial Performance

- Operating profit attributable to shareholders grew by 8.3% to RMB 84.2 billion, maintaining strong growth momentum

- Net profit attributable to shareholders increased by 36.1% year-on-year to RMB 92.6 billion

- The Group's overall revenue growth rate reached 15%, with growth momentum continuing to be unleashed.

- New Business Value (NBV) for life insurance grew by 11.2%, achieving improvements in both volume and quality.

Business Progress

- Life insurance remains committed to value-oriented transformation, with participating policies accounting for over 90% of the mix; the NBV margin for agents rose by 3.5 percentage points quarter-on-quarter.

- Contributions from non-agent channels reached 38%, demonstrating significant progress in channel diversification.

- Premiums for new energy vehicle insurance grew by 21.5%, capturing a market share of 28%.

- Ping An Bank reported a net interest margin of 1.8%, maintaining a leading position in the industry.

Next Quarter Guidance

- We are highly confident in the sustainable future growth of operating profit, underpinned by the optimization of multiple forward-looking indicators.

- We expect NBV to achieve robust growth for the full year.

- We have strong confidence in the sustained growth of NBV over the next two to three years.

- In the second half of the year, we will further solidify our business foundation by adhering to the 16-character guideline focused on high-quality growth.

opportunity

- The life insurance industry is entering a golden period of development, possessing unique advantages in a low-interest-rate environment

- Launching innovative products such as specialized Alzheimer's disease insurance to tap into new customer segments

- Collaborating with high-quality managers through private equity (PE) to secure early positions in technology projects within the primary market

- Leveraging AI empowerment to achieve intelligent operations, reducing costs and improving efficiency

[AI Conference Transcript]

Shen Ruisheng

Good morning, members of the media. It is already noon now. Thank you all for attending Ping An's 2026 Interim Results Press Conference. I am Shen Ruisheng, Group Board Secretary. Today's press conference will be co-hosted by myself and Chen Yao, General Manager of Ping An Group's Brand and Publicity Department, at the Shanghai venue. This press conference is being conducted via simultaneous live video streaming from the on-site meeting.

First, let me introduce the management team present at the on-site press conference. The management team at our Hong Kong venue today includes Chairman Ma Mingzhe and Co-CEO Guo Xiaotao. Next, please allow Chen Yao to introduce the management team at the Shanghai venue.

Chen Yao

Thank you. The management team attending the press conference at the Shanghai venue includes General Manager and Co-CEO Xie Yonglin, and Deputy General Manager and Chief Financial Officer Fu Xin. The press conference will begin with the Deputy General Manager introducing the performance growth rates for the first half of 2026, followed by a Q&A session with the management teams from both locations. Now, please welcome the Deputy General Manager.

Fu Xin

Thank you, Ms. Chen Yao. I sincerely appreciate the media representatives for taking time out of their busy schedules to attend Ping An's press conference. Thank you all for your long-standing trust and continued support of Ping An. First, allow me to present Ping An's interim performance results.

Please turn to page 5. In the first half of 2026, as we have all felt, the international landscape has been complex and volatile, with the market presenting both opportunities and challenges. Ping An has continued to deepen its strategy of 'Integrated Finance + Healthcare and Elderly Care,' delivering an interim report card characterized by stable progress and high-quality growth.

Looking at several key metrics, our overall operations have shown stable progress. In terms of profit growth, our attributable operating profit increased by 8.3%, maintaining strong momentum. Attributable net profit also rose by 36.1% year-on-year. Regarding revenue, we can see a continuous acceleration, with the Group's total revenue growing by 15%, indicating sustained release of growth momentum.

Net assets have further thickened, increasing by 2.8% on top of a trillion-yuan base, resulting in a solid and robust balance sheet. Looking at operational data for core businesses, our life insurance segment has persisted in its value-oriented transformation, with New Business Value (NBV) growing by 11.2%, achieving improvements in both volume and quality.

In property and casualty insurance, our business has improved in quality and efficiency, with a Combined Ratio (COR) of 95.1%, the best level in five years. Our investment returns have also demonstrated significant resilience, with a comprehensive investment yield of 2.1%, delivering stable returns across cycles. This operational and business stability provides the foundation for our sustainable dividend payouts.

For the interim period of 2026, we propose a cash dividend of RMB 0.98 per share, a 3.2% year-on-year increase, continuing the growth trend seen over the past decade. This increase represents one of the highest levels in the last three years. We remain committed to creating long-term returns for our shareholders.

Please turn to page 6. This slide shows our operating profit performance. In the first half of 2026, attributable operating profit reached RMB 84.2 billion, up 8.3% year-on-year, demonstrating very strong momentum. The growth rate has further accelerated compared to the first quarter. Forward-looking indicators for operating profit also show a positive trend, such as the improvement in both volume and price of NBV in life insurance, the continuous optimization of COR in property and casualty insurance, and the leading net interest margin in banking.

Therefore, these indicators give us great confidence in the sustainable future growth of our operating profit. We will provide detailed reports on these specifics in the section on operational highlights.

On page 7, we can see the attributable net profit. In the first half of this year, our attributable net profit reached RMB 92.6 billion, with a growth rate of 36.1%. This growth is driven by two main factors: first, the stable growth of our core businesses, and second, our long-term stable investment returns and strategic asset allocation.

In the first half of the year, structural differentiation in the capital markets was very pronounced. Amidst this divergence, the company maintained strategic discipline in its investments, increasing allocations to high-quality, high-dividend assets as our core holdings. This 'ballast stone' approach is indeed the envy of peer insurers. We will report in detail on the asset allocation strategy for insurance funds later.

Turning to page eight, we can observe the investment performance of our insurance funds. A key characteristic of insurance capital is its ability to traverse economic cycles; therefore, we have presented the ten-year investment return yield for insurance funds on the left. Adhering to a comprehensive asset-liability matching strategy, our average Comprehensive Investment Income (CI) yield reached 4.9% over the past decade, while our average Net Investment Income (NI) yield stood at 4.8%.

These figures represent a leading position within the industry and exceed our internal actuarial assumptions for investment returns. This constitutes a robust performance level, aligning well with the inherent characteristics of insurance fund investments.

On the following page, page nine, we see that such investment results stem from a prudent, cycle-spanning asset allocation strategy. As of June 30, 2026, the Company's investable assets totaled RMB 6.6 trillion, representing a year-on-year increase of 1.9%.

Overall, the bar chart on the left demonstrates that our asset allocation structure is highly robust, primarily consisting of fixed income, equities, and alternative investments. Regarding fixed income, many peers acknowledge Ping An's expertise in this area, a strength accumulated over thirty years. Indeed, we have built a significant portfolio of high-yield, long-duration bonds.

This achievement benefits from our investment team's proactive positioning in recent years, securing stable coupons and establishing a solid safety margin with attractive yields, which serve as our core holdings. Secondly, regarding equities, our current equity allocation stands at 20%. We maintain a 'barbell' strategy for equity investments, focusing on long-term allocations and continuously increasing our holdings of high-quality, sustainable, high-dividend assets.

Within our equity portfolio, the proportion of stocks measured at fair value through other comprehensive income (FVOCI) reached 66%, an increase of nine percentage points from the beginning of the year. These high-quality, high-dividend assets consistently contribute dividends and returns, serving as the ballast for our equity investments. Finally, alternative investments currently account for 7%, where we emphasize return generation, risk management, and diversification.

This segment includes income-generating properties, a topic of significant interest to investors. Our real estate investment balance stands at 3.1%, with over 85% allocated to high-quality income-generating properties. The overall scale is substantial, and the risks are mitigated by focusing exclusively on income-generating properties in first- and second-tier cities, which provide stable returns. This summarizes our investment allocation.

On page ten, we present our net assets attributable to shareholders. We continue to maintain a solid foundation on the trillion-yuan platform. Our net assets increased by 2.8% from the beginning of the year, reaching RMB 102.8 billion. This steady and robust growth provides a solid foundation for sustainable dividends and consistent shareholder returns.

The next page addresses solvency, a key concern for both stakeholders and regulators. Our solvency position remains very ample. As of the end of June 2026, under the C-ROSS Phase II rules, Ping An Group, Ping An Life, and Ping An Property & Casualty all demonstrate strong metrics. On the left, we show the core solvency adequacy ratio, and on the right, the comprehensive solvency adequacy ratio. Both are at robust levels, exceeding regulatory requirements by more than double.

We are confident that through further optimized asset-liability management, we will maintain a healthy and stable solvency level in the future.

On the next page, we can see our dividend distribution. I believe that many investors and media friends are very concerned about our dividend situation, which is also the part that long-term value investors care about most. The estimated interim dividend for 2026 is RMB 0.98 per share, a year-on-year increase of 3.2%. This interim increase hit a three-year high, with the total dividend payout reaching RMB 17.7 billion.

Management attaches great importance to shareholder returns, adhering to a medium-to-long-term linkage between dividends and operating profit. Dividend payouts have grown continuously for nearly a decade, with cumulative dividends exceeding RMB 390 billion. Our dividend policy remains stable and is highly competitive within the industry. I believe that our steady operations in the first half of the year and high-quality growth in core indicators demonstrate our confidence in the long-term stability of operating profit, which serves as the best support for our dividend policy.

Having just reviewed the group's overall performance, I will now highlight the key operational highlights and achievements of the group for the first half of the year.

For the first highlight, please turn to page 14, which covers our New Business Value (NBV). As analyst friends mentioned earlier, our NBV has seen excellent growth over the past few years. This double-digit growth stems from our unwavering commitment to high-quality development and transformation in life insurance over recent years.

We can see that our NBV achieved growth in both volume and price. In terms of volume, or scale, our growth rate in the first half reached 11.2%, maintaining double-digit growth for three consecutive years. Regarding quality, which we believe is even more noteworthy, we have continuously increased the proportion of participating policies to adapt to the low-interest-rate environment.

In the new business during the first half, participating policies accounted for over 90%. We share our investment capabilities and excess returns with customers, while also strengthening the flexibility of our balance sheet. Secondly, we proactively optimized our business structure by increasing the proportion of high-margin, long-duration regular premium business.

In the first half, we can see that the new business value margin for agents increased by 3.5 percentage points quarter-on-quarter. Meanwhile, as shown by the figure in the bottom right corner, the proportion of long-term regular premiums continues to rise. These indicators are crucial areas of focus in our daily operations going forward. We welcome continued attention from media friends to supervise and ensure our high-quality development. This concludes the first highlight.

In life insurance, we can observe the diversified channel transformation that media friends have closely followed in recent years. On this page—please turn to the next page—you can see a 38% growth in the bar chart on the left, which is a direct metric measuring our multi-channel transformation.

The contribution from non-agent channels has reached 38%, rising several percentage points since the beginning of the year and approaching 40%. Breaking it down by key channels: first, undoubtedly, is the agent channel. Through its continuous high-quality transformation, the per-capita new business value of our agent channel increased by 14% year-on-year in the first half, with per-capita productivity also seeing double-digit growth. The results of this high-quality transformation are very evident.

Second, let's look at the bancassurance channel, specifically Ping An Bank's bancassurance channel, which is widely admired across the market and often studied by peers. Our team boasts high caliber, with many colleagues graduating from prestigious universities such as Cambridge and Oxford, as well as top domestic institutions like Tsinghua University, Peking University, and Renmin University of China, joining Ping An Bank's bancassurance team.

With such a high-caliber background, the result is high productivity. Secondly, we achieve high productivity. Thirdly, this high productivity translates into high income. More importantly, the retention rate of this team is nearly 100%. They strongly identify with Ping An's development, which in turn provides them with excellent opportunities for sustained career growth and attractive income.

For such a team, our bancassurance productivity ranks first in the market. Our average monthly premiums approach RMB 500,000, which is 25 times the market average and 15 times that of leading foreign insurers. This demonstrates the high quality of our bancassurance channel.

The third key channel, which is also a differentiated feature of Ping An, is our community finance channel. As a unique differentiated channel for Ping An, it adheres to what we call a 'farmer-style' development strategy, focusing on deepening relationships with existing customers. In addition to collecting renewal premiums, which increases our renewal rates and enhances sustainable distributable value, its more important role is to expand new business.

In the first half of the year, we reported a figure showing that our New Business Value (NBV) doubled year-on-year, with a growth rate of 109.8%, marking a continuous breakthrough in value contribution. We believe our diversified channel strategy will support high-quality growth for our life insurance business in the future and serves as a key driver for this growth. This concludes the section on life insurance.

The third highlight I would like to report concerns our property and casualty (P&C) insurance segment. Our P&C insurance business scale is growing steadily, and operational efficiency and quality are improving from an already strong base. Regarding business scale, our premium income in the first half of 2026 was RMB 178.8 billion, representing a 4% year-on-year increase, a growth rate that leads the market.

In terms of operational quality, our Combined Ratio (COR) in the first half was 95.1%, an optimization of 0.1 percentage points year-on-year, representing the best level in five years. Notably, our auto insurance COR reached 94.9%, optimizing by 0.6 percentage points year-on-year. Our underwriting quality has been 'double excellent' for the 16th consecutive year. Beyond performance growth and cost optimization, our P&C insurance operations in new energy vehicle (NEV) insurance have also achieved remarkable results.

Turning to the next page, we can see the figures for new energy vehicles. This page highlights the operational performance of our NEV business. The premium growth rate for our NEV auto insurance is 21.5%, which is highly competitive in the market. More importantly, many customers recognize and trust our NEV auto insurance products. As shown by the 28% figure in the bottom left corner, our market share in NEV auto insurance has reached 28%, a level that has been continuously rising over the past few years.

Interestingly, among all NEV owners who are our customers, the average age is 2.5 years younger than the general average. This indicates that through differentiation and innovative products and services, we have successfully captured the minds of more young customers, thereby significantly enhancing our customer potential in this segment.

On the next page, we see our fourth highlight: our banking sector. After years of attention from investors, we can see that the bank's performance this year is very stable and robust, with both revenue and profit increasing. Our net interest margin (NIM) is also leading the industry. A significant characteristic of the industry in recent years has been the continuous narrowing of NIMs. While the industry average NIM is 1.4%, Ping An Bank's NIM stands at 1.8%, ranking among the top levels in the industry.

This strong NIM level has driven dual growth in both our revenue and profit. Our net profit grew by 3.3%, maintaining a leading position in the industry. More importantly, beyond interest-based businesses, banks must focus on non-interest income that does not consume capital. We can see that the proportion of our fee-based income has been continuously rising, reaching 37.3% in the first half of this year.

Such strong performance provides a solid foundation for us to optimize capital consumption and sustainably improve the bank's ROE in the future. Having discussed interim business income, I believe investors are closely watching our non-performing loan (NPL) ratio and NPL formation rate. Our NPL ratio stands at 1.05%, which is a very competitive level within the industry. The NPL formation rate is 1.13%, having improved by 39 basis points in the first half of the year, indicating that NPL formation has stabilized.

Furthermore, our overall asset quality remains robust, laying a strong foundation for Ping An Bank's future growth.

The next highlight is the asset management sector, which is also under close scrutiny by the market. As many know, Ping An operates an integrated finance model, and our asset management segment features highly diversified businesses. As shown on this slide, driven by the revitalization of the capital markets starting in the second half of 2024, this segment has delivered strong diversified revenue performance.

Let me share a few examples. On the left, Ping An Securities reported a 31.5% increase in net profit, with an annualized ROE of 7.7%, a leading position in the industry. What underpins these results? It is our client management strategy. Ping An Securities serves 26.95 million individual clients, ranking second in the industry in terms of A-share funded accounts.

We added 1.18 million new clients, a year-on-year increase of 105%. This demonstrates client recognition of Ping An Securities' service capabilities and validates our ability to sustainably manage clients and create value. Additionally, Ping An Asset Management and Ping An Fund have achieved significant growth in assets under management (AUM) and entrusted assets. This segment exemplifies the resilience of our integrated finance model.

Speaking of this segment and integrated finance, we must highlight our client management strategy within the integrated finance framework. Please turn to the next page. Regarding client management, I would like to report several key developments. Starting with the left side, let us look at the core values of our integrated finance model. The first is client value. Our client base has reached 253 million. Notably, the number of high-value clients within this base continues to grow, with an optimizing structural mix.

It is worth noting that for these high-value clients, the average number of contracts per client has increased by 80.6%. In terms of products plus services, 2026 is designated as our 'Year of Service.' We observe that clients utilizing Ping An's differentiated services saw a 39% year-on-year increase in average assets per client and a 53.9% increase in average premiums per client. These are critical differentiators and client management strategies.

More importantly, in the first half of the year, we launched our 'Client Acquisition + Ecosystem' initiative. Both our online client management and offline ecosystem layout have performed well. In terms of ecosystem-driven client acquisition, we built a pet ecosystem in the first half centered around credit cards, pet insurance, and pet-themed credit cards. Among the new clients acquired through this channel, over 70% belong to younger demographics.

Our offline teams acquired over 100,000 new clients within two months. This represents a successful trial and an ecosystem breakthrough targeting China's pet-owning population, which exceeds 100 million.

On the right, we can see several initiatives launched during the 2026 'Year of Service,' which have received strong client recognition. The first is streamlined service, encapsulated in the 'Nine-to-One' concept. Within this one-stop scenario, we cover 88% of the business scenarios across Ping An Group's integrated finance offerings.

Meanwhile, our second flagship service is global emergency assistance. We can see that this emergency assistance service covers 75.88 million customers. These customers have shown strong recognition of our innovative and upgraded global emergency assistance services. We have also received repeated recognition and commendation from regulators, the government, and the media, and we will continue to strive for excellence.

We also invite everyone to continue paying attention to our service innovations and upgrades. In the second half of the year, we will launch our 'Dignity in Life' service, with seven major categories and 18 service processes already planned, aiming to better serve our customers.

To summarize on the next page, our performance in the first half of the year can be summarized by several keywords: first, steady progress; second, high-quality growth; third, strategic breakthroughs; and fourth, a promising future. We hope that media friends will continue to pay attention to and support Ping An, supervising and accompanying us as we strive to do better. Thank you.

Chen Yao

Thank you, Mr. Fu. Next, we will move to the Q&A session, with questions alternating between Shanghai and Hong Kong. Each media representative may ask questions, but please state your affiliated institution and your name before asking. Additionally, to provide more people with the opportunity to ask questions, please limit your inquiries to no more than two questions per turn. Let's start with the Shanghai venue. Now, I invite the media present in Shanghai to ask questions. Please go ahead.

CCTV Finance Reporter

Thank you, moderator. This is a reporter from CCTV Finance. I have two questions. First, regarding performance, we observed that the company's net profit attributable to shareholders increased by 36% in the first half of the year, and market performance was also strong, with the stock price opening higher and continuing to rise today. How does management comment on these results? What is the outlook for the second half of the year?

Second, regarding investments, I would like management to review the investment returns for the first half of the year, particularly in equity investments. The A-share market experienced significant divergence in the first half, with technology stocks showing considerable volatility. In this environment, will the company make any changes to its investment strategy for the second half of the year? Thank you.

Xie Yonglin

Overall, I would evaluate the performance for the first half of this year in three points. First, overall performance remained robust. Second, growth is moving towards a path of high quality. Third, value created through services.

In terms of overall stable performance, Mr. Fu Xin has already elaborated on this above. Whether it is our operating revenue, operating profit, net assets, solvency, or shareholder returns, all are showing positive growth. Mr. Fu Xin has already provided the specific figures; these six metrics represent the Group's core financial indicators.

Secondly, regarding high-quality growth, you can see that our core businesses are growing steadily. First, in life insurance, beyond the data, we are clearly seeing the results of our diversified channel development. The business contribution from non-agent channels has exceeded 40%, a figure that would have been unimaginable three years ago. This is a very encouraging change, indicating that our life insurance business sources have become more diversified and robust.

Secondly, the adjustment of our product structure is also very gratifying. The proportion of participating insurance policies has increased significantly compared to the same period last year. Additionally, the share of products with longer premium payment terms has risen markedly. Furthermore, both the per capita productivity and per capita income of our agent force have seen significant improvements.

The second core business is property and casualty (P&C) insurance. With a Combined Operating Ratio (COR) of 95.1%, we managed to reduce it by another 0.1 percentage points despite the already low base. Regarding new energy vehicles (NEVs), approximately one in every four NEVs in China is underwritten by Ping An. Moreover, the COR for NEV insurance is impressive and profitable, with a substantial market share.

Our banking segment achieved dual growth in both revenue and profit, while asset quality remained stable, which is another encouraging development. Therefore, we can say that the growth of our core businesses is very robust.

Secondly, the strength of our integrated finance model has also been demonstrated. This year, the growth in revenue and profit from the asset management sector has made a significantly improved contribution to the Group. Benefiting from the development of capital markets, profits in securities, funds, and insurance asset management have all seen substantial growth in the first half of this year, as have revenues and customer numbers. This has significantly diversified the Group's sources of revenue and profit.

As Mr. Fu Xin mentioned earlier regarding the source of funds for dividends, we previously relied heavily on life insurance. Now and in the future, our sources of profit have become diversified.

Thirdly, service creates value. This year, designated as the 'Year of Service' by the Chairman, we aim to build Ping An's sustainable competitive advantage through differentiated services. Mr. Fu Xin cited two examples earlier, which are quite illustrative. On one hand, they demonstrate our genuine commitment to service differentiation; on the other, the data corroborates their effectiveness.

Take the first example: our AI assistant provides convenient one-stop services through a single entry point, covering 88% of business scenarios, and has served 50 million user instances. Launched last year, this initiative has yielded significant benefits in less than a year, and the customer feedback has been largely positive.

The second example concerns our upgraded global emergency assistance service system, accessible via a single button, designed to handle hundreds of types of urgent risk events for customers traveling abroad. In the first half of this year, we handled over 1,500 cases and facilitated cross-border medical transfers for 87 clients, either bringing them back to China or transferring patients from China to overseas facilities.

Regarding our overseas operations, as many are aware, the geopolitical situation in certain parts of the Middle East was quite precarious during the first half of this year. We successfully escorted 36 compatriots to safety from these high-risk zones. Such services are designed to build our service reputation and enhance customer stickiness, which has a clearly positive impact on the growth of our core business.

Therefore, management is satisfied with both the performance figures and the series of reform initiatives implemented in the first half of the year. In the second half, we will continue to align with the strategic direction set by the Board of Directors, adhering to the 16-character guideline: 'High-quality growth, service innovation, technological leadership, and strengthening compliance baselines.' This approach will further solidify our business foundation and promote development. Thank you.

Fu Xin

Let me address the question regarding investments. Our total insurance investment assets amount to RMB 6.5 trillion. When evaluating our investment strategy, we do not look at investments in isolation; our core focus is on asset-liability matching. This ensures that our investment returns can withstand market cycles, fostering long-term, healthy, and sustainable development. This is the essence of our investment philosophy.

Under this investment philosophy, we adhere to six matching principles. We have discussed this extensively in various forums, including previous earnings conferences and media briefings. Previously, we referred to five matching principles; we have now added a sixth: account matching. Currently, our framework includes duration matching, yield matching, liquidity matching, capital matching, account matching, and regulatory matching.

Why was account matching added? It reflects the fact that our liability side has fully shifted toward participating (dividend-type) products year-to-date. I want to emphasize that our investments do not exist in isolation; they are part of an asset-liability matching process. Participating accounts, traditional accounts, and universal life accounts have different investment requirements. Therefore, establishing these six matching principles is paramount.

Guided by these six matching principles, we then determine the allocation ratios, durations, costs, and yields for various asset classes. In our overall asset allocation, fixed-income assets account for over 70%, equity assets make up 20%, and alternative investments constitute approximately 7%.

I believe a key concern raised by media friends earlier was how we safeguard our investment yields amidst the significant volatility in the capital markets from the first half of the year until now, characterized by continuous rotation among sectors with different styles.

Here, I would like to share our views on investment, particularly in the equity market. The volatility in the capital markets during the first half of this year has been a test for all institutional investors. We are pleased to report that our investment yields—whether looking at CII, NII, or TII as of June 30, or at the current point in time—have remained relatively robust.

The core driver is our balanced asset allocation strategy. Regarding the broader capital market, we adhere to several principles. First, we maintain a long-term bullish outlook on the resilience of China's economic development. Since the capital market serves as a leading indicator of China's economic progress, we are also optimistic about its long-term, healthy, and stable development.

Secondly, based on this assessment of the broader trend, we adhere to a principle of balanced allocation. We use high-dividend stocks as our solid core holdings while allocating to growth stocks. Within the growth segment, we are particularly bullish on the technology sector. We maintain a long-term positive outlook on areas such as AI, high-end manufacturing, innovative pharmaceuticals, and energy and resource-related sectors, as these are closely tied to China's economic development.

Only under this premise of balanced allocation can we effectively navigate the high volatility of the capital market and achieve cycle-transcending performance. You may have seen in media reports that we have invested in and participated in some star projects in the high-tech AI space.

This is the result of our long-term bullish stance on the technology sector and our strategy of diversified layout with linkage between the primary and secondary markets. Therefore, we not only invest in high-quality technology and AI stocks in the secondary market but also make early arrangements in the primary market through cooperation with PE firms and quality fund managers. This allows us to effectively integrate industrial capital with financial capital through various approaches.

For projects in their mid-to-late stages that are relatively mature and stable, we are willing to make bold investments. To summarize, asset-liability matching is our fundamental prerequisite, and the 'six matchings' constitute our investment principles. We remain long-term bullish on the resilience of China's economy and the development of the capital market, maintaining a balanced allocation and a diversified layout in the technology sector.

We believe that this investment strategy will help our investment arm navigate market cycles and withstand high market volatility, thereby contributing stable and robust value to the entire group's profit generation. Thank you.

Chen Yao

Alright, thank you. Next, let's go to the Hong Kong venue. We invite the reporter in the back row.

Hong Kong Reporter

I am a reporter. I would like to ask: Life insurance New Business Value (NBV) maintained double-digit growth in the first half of the year, but the growth rate seems to have slowed compared to the first quarter. Could you share the NBV trend for the full year? Additionally, I'd like to ask about a hot topic overseas: since a 20% individual income tax is levied, dividends from offshore insurance policies are also subject to taxation.

As a leading insurance company, what annualized return rate can your domestic participating policies offer, and how attractive do you find your policies? Given the stricter regulations on cross-border personal investments within China, has there been an acceleration in the sales of participating insurance products and bank wealth management services in Guangdong and other regions near Hong Kong since May and June? Thank you.

Guo Xiaotao

Alright, let me first address the trend in New Business Value (NBV) for life insurance. As you can see, the current economic environment is characterized by low interest rates, a condition expected to persist for the foreseeable future. In such an environment, net interest margins are a critical metric for the financial sector, and these margins will continue to narrow.

Consequently, the broader financial industry has entered, or is already in, a phase focused on managing existing stock. In contrast, the life insurance industry is entering a golden period of development. This is because life insurance products are unique in offering guaranteed returns in this low-interest-rate environment. They are crucial financial instruments that provide long-term, stable, guaranteed yields.

Therefore, we believe the life insurance sector will continue to develop sustainably, as we remain bullish on its entry into this golden growth phase. Secondly, regarding Ping An Group's life insurance strategy, we will adhere to several key principles: first, balanced channels; second, balanced products; third, differentiated services; and fourth, AI empowerment.

Let me briefly explain balanced channels. As our Vice President mentioned earlier when reviewing the company's performance, we not only have an agency channel but also a bancassurance channel, which has contributed significantly to the substantial NBV growth over the past few years. Our community grid channel, which we began laying out a few years ago, is now showing initial signs of growth, with an increase of over 100% in the first half of the year.

Looking ahead, we are still incubating part-time agent channels and online channels. Thus, balanced multi-channel development is a crucial driver for the long-term, stable growth of our life insurance business.

The second principle is balanced products. As mentioned, we are shifting from traditional products to participating products. In this interest rate environment, net interest margin is a significant source of profit. Simultaneously, we aim to achieve a balanced allocation among protection, savings, and pension products to meet customers' varying needs for protection, wealth management, and asset inheritance at different life stages and wealth levels.

On the product side, we will further optimize product duration and coverage periods to continuously improve our product profit margins, specifically our New Business Value Margin. This constitutes our approach to balanced products.

The third principle is differentiated services. In an era of financial homogenization, service is the true means of differentiation, allowing our products to compete not merely on yield or price. Therefore, we will continuously optimize and enhance our offerings in healthcare, medical services, and elderly care.

As you can see, we launched our Home Care 2.0 service in the first half of this year, receiving very positive feedback from the market. We focused on seven key services, including health management, proactive health management, sleep management, dietary management, and safety monitoring. This initiative raised the minimum premium threshold for our 'Jianjun' program from RMB 1 million by 50%, bringing it to over RMB 1.5 million, and we expect this threshold to continue rising.

Therefore, this serves as an example of how we aim to enhance our product competitiveness and drive business growth through differentiated services.

Fourthly, AI empowerment. As everyone knows, technological innovation has always been in Ping An's DNA. In the realm of AI, we are not only further driving improvements in operational efficiency, thereby optimizing our costs and expenses, but also enhancing our new business value margin and profit margins.

At the same time, we are promoting AI-driven intelligent marketing. Our life insurance agents, grid managers, and community finance specialists are equipped with 'AskBob,' an intelligent marketing tool that helps them efficiently and quickly understand customer needs, formulate insurance solutions, and follow up on customer service.

This suite of marketing tools enables our salesforce to reach more customers, provide targeted and effective services, and improve their productivity. As a result, you can see that in the first half of this year, the per-capita New Business Value (NBV), or productivity, of our individual insurance agents increased by over 10%.

These strategies represent important initiatives ensuring that our life insurance NBV continues to grow not only now but also in the future. With an 11% growth in the first half of the year, we expect to achieve solid full-year growth and remain very confident. Thank you.

Xie Yonglin

Regarding the taxation of dividends on overseas insurance policies, we noted that on August 7, officials from relevant departments of the State Taxation Administration responded to questions about taxing returns on Hong Kong insurance policies. They stated: 'Chinese tax residents are obligated to pay taxes on global income, and overseas insurance proceeds fall within the scope of taxable income. This is not a new policy, and the market should not overinterpret it.' In short, this is not a new policy; it has existed for some time.

Secondly, I would like to inform this friend that this tax has not yet been extended to returns on domestic insurance policies; such a system is not currently implemented for domestic insurance. Thirdly, Ping An's overseas insurance policy business is minimal, so the overall impact on Ping An is nearly zero.

Your final comment touched on market opportunities. The Chinese life insurance market is large and holds significant potential. From a management perspective, as Mr. Guo mentioned earlier, we are building diversified channels and developing varied products to meet customer needs, seizing every opportunity to expand our life insurance business. This is what we are doing at all times. Thank you.

Chen Yao

Alright, we will now invite questions from the media present in Shanghai.

Reporter from Yicai (First Financial Daily)

Good day to the management team. I am a reporter from Yicai. I have two questions. The first concerns the stock price. We observed that Ping An's stock performed quite well today. At the same time, we have noted that since the beginning of this year, traditional financial sectors have generally remained sluggish compared to the technology sector.

Looking at the year as a whole, Ping An's stock price has experienced some correction. Therefore, we would like to ask the management team how you currently view Ping An's investment value and how you plan to bridge the expectation gap between fundamentals and market valuation.

The second question relates to service upgrades. We understand that this year is designated as Ping An's 'Year of Service,' and the management team just provided detailed introductions to various service initiatives. We also noted that Chairman Ma specifically highlighted 'service creating value' in his chairman's statement for this year's interim report. Could the management team elaborate on how Ping An's overall services will translate into concrete financial performance and create value?

What are the overall objectives for value creation through services? Given the significant investments mentioned in the service initiatives just introduced, how does the management team evaluate the return on investment (ROI) for the service segment? Thank you.

Fu Xin

Let me first address your questions regarding the stock price and related matters. Indeed, market capitalization management is a critical priority for Ping An's management and our top concern. As you mentioned, the capital market has been complex and volatile since the first half of this year. Our stock price, similar to the industry trend, has been influenced by sector rotation between the broader financial sector and high-growth technology sectors.

Therefore, I believe this sector rotation is a core reason for the volatility seen in Ping An's stock price as well as those of our peers. According to valuations from several major banks, our current stock price significantly understates our intrinsic value. Whether it is Morgan Stanley, JPMorgan, Citi, or HSBC, their target prices for our stock are more than 50% higher than the current level.

Thus, I believe our value is not fully reflected in the market. How should we view a company's stock price versus its investment value? During board discussions, the Chairman and I agreed that there are several key dimensions to consider when evaluating a company.

First, let's look at the industry. As Mr. Xie just mentioned, China's life insurance sector has immense growth potential. We believe the entire life insurance industry is currently in a golden period of development. Key drivers include customer demand for life insurance products, needs arising from an aging population, and the demand for differentiated services, all of which are crucial elements supporting this golden era for the life insurance industry.

Our industry is in a golden period of development. Furthermore, Ping An's unique competitive advantage—integrating comprehensive finance with healthcare and elderly care—enhances our capability and strength to seize these growth opportunities. This covers our industry perspective.

Second, we look at the company. Our corporate strategy is very clear: for many years, we have focused on 'comprehensive finance plus healthcare and elderly care.' Regarding comprehensive finance, as Mr. Xie noted, we have diversified revenue and profit sources. If you look at our dividends, they come from securities, life insurance, and banking operations. These factors provide the foundation for our sustained, differentiated advantages.

Therefore, I believe our company's strategy is clear, and management is executing and implementing it effectively. The company's fundamentals are very robust, which is reflected in our consistent profit growth trajectory over the past few years. With this sustained growth trend, I am confident that it will support both our future stock price and future dividend payments.

More importantly, the third perspective is to look at stock price and value. I believe our current valuation does not reflect our true intrinsic value, nor does our stock price. Our Chairman often says, 'Gold will always shine.' As our profits continue to grow steadily and we consistently deliver shareholder returns, our stock price will eventually reflect our true value. We will continue to strive for this. Thank you.

Guo Xiaotao

Alright, let me address the question about service raised earlier. This is a topic of great interest to everyone. We have designated 2026 as Ping An's 'Year of Service.' As we just introduced, we believe that in an era of financial homogenization and market saturation, service is what truly creates differentiation and demonstrates Ping An's competitive advantage.

Therefore, within our Group's 16-character strategic guideline, 'service innovation' is a key focus for this year. In today's presentation report, we emphasize that 'service creates value,' because our services genuinely contribute value to our business performance.

This is evident in several aspects, primarily because service acts as an enabler. When we speak of service, it encompasses two categories: comprehensive financial services and healthcare/elderly care services. Regardless of the category, the primary objective is to enhance customer experience. We want customers to have excellent service interactions with Ping An Group, whether they purchase our financial products (insurance, securities, wealth management, banking) or our healthcare and elderly care products.

Since financial products typically involve low-frequency interactions, we have developed our comprehensive finance platform, integrating all online customer touchpoints across banking, insurance, securities, and healthcare into a single major traffic portal via different apps. We leverage AI empowerment to provide efficient and convenient services.

Previously, transferring RMB 50,000 required navigating through multiple menu layers one by one. Now, a simple voice command triggers our quick-service feature to complete the transaction instantly. Moreover, while this used to be exclusive to our banking app, customers can now initiate transfers directly within our insurance app without switching platforms. This reflects our commitment to enhancing customer experience.

In the healthcare and elderly care sectors, our insurance services follow a similar logic. We integrate online AI doctors with family doctor services through our 'Four-Channel' service model. Recently, we launched AI-MDT (Multidisciplinary Team) consultation services. With 250 million customers across China—meaning one in every six Chinese citizens is a Ping An client—we ensure that clients, whether in major cities like Beijing, Shanghai, Guangzhou, and Shenzhen with abundant medical resources, or in remote areas with scarce resources, can access high-quality healthcare and health services. This integrated system of online AI doctors and the 'Four-Channel' framework effectively reduces costs while expanding access.

What are the results of improved service quality and enhanced customer experience? As mentioned in the Deputy General Manager's report, our customer retention rate has increased significantly. Clients are staying with Ping An for longer periods, demonstrating higher stickiness. Their Assets Under Management (AUM)—the assets managed by Ping An Bank, Insurance, and Securities on their behalf—have also risen substantially, creating significant value for us. Thus, the first value driver is the enhancement of customer experience.

The second value driver is the reduction in customer acquisition costs. Our report highlights our 'One Account, Multiple Services' integrated finance online platform, which facilitates seamless cross-selling. In this convenient environment, we can help customers open securities accounts, purchase various insurance products (such as auto, health, or medical insurance), and apply for credit cards.

The next upgrade to our quick-service feature will transform it into intelligent investment advisory and intelligent insurance advisory services, providing timely support when customers have specific needs. This approach effectively lowers customer acquisition costs; on our integrated finance platform, these costs are more than 50% lower than external acquisition channels. This constitutes the second value created.

The third value driver is sales growth. You may have noticed that our Home Care 2.0 service, launched by our life insurance division in the first half of this year, has effectively boosted our agency force recruitment. In the second half of the year, we will introduce innovative services, such as specialized insurance for Alzheimer's disease. This product goes beyond simple financial compensation; it integrates our data and AI capabilities with expertise in medication management and long-term medical companionship for Alzheimer's patients. This enables customers to use effective medications accurately from the early stages and adhere to treatment plans, significantly delaying or even halting the progression of the disease.

Such new products allow us to reach customer segments previously inaccessible to traditional insurance offerings. The core advantage lies in our systematic healthcare and medical services, which support customers over the long term—spanning two, three, or five years. This creates value through enhanced sales performance.

In summary, our services are designed to empower our core financial businesses. This empowerment is reflected in improved customer experience and retention, effective reduction in customer acquisition costs, and the promotion and increase of sales.

With clear, quantified targets for these values, our investment strategy becomes transparent: our level of investment depends on the value we can create. Currently, the value generated represents only the tip of the iceberg relative to our coverage potential among our 250 million customers.

Therefore, we believe that our strategy of differentiated services will continue to drive our future growth and serve as an effective engine for our business performance. Thank you.

Chen Yao

Due to time constraints, we will reserve the final question for this lady from Hong Kong.

Hong Kong Reporter

Hello, management. In your interim report, you mentioned token consumption for the first time, noting rapid growth in the first half of the year. I would like to ask about your strategy regarding AI computing power and associated base expenses. Additionally, could you clarify the current return on value from your AI investments?

Another question concerns New Business Value (NBV). You did not fully address a previous reporter's question: how do you view the growth drivers for the second half of the year? Thank you.

Guo Xiaotao

I will answer the second question first. As I mentioned earlier, we have strong confidence in the sustained growth of NBV, both for the full year and over the next two to three years. That is the concise answer.

Regarding AI token consumption, we have consistently emphasized that back in 2017, our Group Chairman, Mr. Ma, made a highly forward-looking assessment at the Group's Executive Committee meeting. He stated that the success of AI depends on four key elements: data, algorithms, computing power, and scenarios. Ping An's advantages lie in data and scenarios. In other words, our technology and AI initiatives are not pursued for their own sake, but to leverage our vertical domain data advantages across various business scenarios to empower our operations. This is our core logic.

From this perspective, our core development direction in the AI field focuses on five areas. These five areas represent an upgrade from our previous digitalization strategy to intelligentization, aligning with our long-standing 'AI in All' strategy.

What are these five areas? They are intelligent operations, intelligent management, intelligent business management, intelligent services, and intelligent marketing. As we discussed earlier regarding services and marketing, these areas are already creating significant value, and we have made substantial progress in these regards.

Our initial focus was actually on intelligent operations. Whether it is the increasing connection efficiency of our call center agents or the continuous improvement in operational efficiency by our staff through intelligent operational tools, Ping An has achieved very significant results in cost reduction and efficiency enhancement over the past two to three years.

In terms of intelligent management, we are applying big data and AI to underwriting and claims processing, particularly for health and medical insurance. The creation of new insurance products, such as the Alzheimer's coverage mentioned earlier, exemplifies this. Previously, we lacked the data to offer insurance to certain demographics. Today, with sufficient data and AI capabilities providing confident and accurate risk assessments, we have developed new products and services, thereby unlocking new business opportunities.

Therefore, value creation will stem from cost reduction and efficiency improvement, sales promotion, and—as mentioned earlier—using AI to enhance agent productivity and continuously lower customer acquisition costs.

Thus, returning to the same logic as our service investments, when evaluating AI investments, we first assess the scenarios where it can empower us—whether in management, operations, customer service, or marketing—and determine the value generated. We then decide the level of investment required in each area based on this assessment.

Over the years, our commitment to investing billions in infrastructure and processing hundreds of billions of tokens is rooted in the extensive experience we have accumulated during the transition from digitalization to intelligence. We now understand which scenarios and data accumulations can drive customer value.

As previously introduced, we have established nine major databases, including those for finance, healthcare, medical services, and elderly care. These form the core foundation enabling us to create value across various scenarios today.

We have completed the AI infrastructure build-out over the past few years, and we are now in the phase where AI empowers specific scenarios to create value. Thank you.

Chen Yao

Thank you to the management team for your answers, and thank you all for participating. For any further questions, please contact our public relations staff. This press conference has now concluded. Thank you everyone.

More details:PING AN IR

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