[ET Net News Agency, 29 August 2019] Nomura lowered its target price for New China Life
(NCI)(01336) to HK$53.93 from HK$56.58 and maintained its "buy" rating.
The research house said excluding a one-off tax recovery of CNY1,932mn from 2018, NCI's
net profit increased by 49% with annualized ROE at 24%.
Nomura noted increasing sensitivity of NBV to investment return implies higher risk
exposure to interest rate, which is the same trend as that for key peers. For each 50bp
drop in investment return, NCI's life NBV decreased by 13.6% in 1H, versus 11.5% in 1H
2018.
Nomura cut its FY2019 NBV growth by 9pp to 0%, and cut its long-term ROEV (Return on
Embedded Value) assumption to 14% from 14.5%. (KL)