[ET Net News Agency, 4 February 2020] Daiwa Research lowered its target price for China
Pacific Insurance (CPIC)(02601) to HK$28 from HK$34 and maintained its "hold" rating.
The research house said a reduction in face-to-face activity hurts agency distribution
and training. This may affect agent headcount in the next few months due to lower
productivity and difficulties in recruitment. CPIC is relatively vulnerable across listed
China life insurers, as its channel mix is made up almost entirely of the agency channel.
Daiwa estimated 2% VNB (value of new business) impact for the industry and 3% VNB impact
for CPIC. It lowered its 2020 VNB by 3% on account of the new coronavirus and factor in
lower investment income on a likely further decline in interest rates. (KL)