[ET Net News Agency, 22 November 2017] Nomura lifted its target price for New China
Life (NCI)(01336) to HK$79.49 from HK$68.1, and maintained its "buy" rating.
The research house said the negative spread risk is far behibd NCI, as the risk-free
rate (10 year government bond yield at 3.8%) was far above the average guarantee return to
policyholders (less than 3%, Nomura estimated).
Nomura said NCI's business transformation on track, with business mix continuing to
improve moderately, in terms of channels, payment type and payment periods, including: (1)
individual business as a percentage of total FYP increased to 76% for 3Q versus 72% for 1H
and 39% for 1Q-3Q 2016; (2) regular business as a percentage of individual FYP increased
to 93% for 3Q vs 91% for 1H and 86% for 1Q-3Q 2016; and (3) for bancassurance, single
premium business with low margin has been cut to almost zero. (KL)