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02328 PICC P&C
RTNominal unchange6.390 0.000 (0.000%)
Research Report

19/10/2020 16:48

{I-bank focus}Goldman cuts 2H VONB for Chinese insurers

[ET Net News Agency, 19 October 2020] Goldman Sachs lowered its 2H VONB (value of new
business) estimates for the Chinese insurers it covered. The research house expects
declines for most life insurers except China Life (02628), which is expected to be flat.
The promotion campaigns Goldman had expected previously did not materialize in 3Q, with
regulators yet to finalize details on the new critical illness products. As a result, not
surprisingly insurers are launching jump-start campaigns as early as October, which should
help drive a FY2021 double-digit first-year premium (FYP) sales recovery for most life
However, Goldman continues to see downward pressure on NBV (new business value) margin,
given savings-oriented jump-start products tend to have lower margins and increasing
competitive pressure on critical illness products.
Hence, Goldman lowered its 2H NBV for all life insurers, but it maintained its
single-digit NBV growth estimates for Chinese life insurers in FY2021/22. It also revised
its target prices for the Chinese insurers as follows:

Name Rating Target Price
China Life Insurance (02628) Buy HK$22.5 to HK$23.5
Ping An Insurance (02318) Buy HK$103 to HK$104.08
China Pacific Insurance (02601) Buy HK$27.7 to HK$28.62
New China Life Insurance (01336) Sell HK$33.7 to HK$32.1
China Taiping Insurance (00966) Sell HK$15.7 to HK$13.4
PICC Group (01339) Neutral HK$2.9 to HK$3.0
PICC P&C (02328) Neutral HK$7.1 to HK$6.9


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