[ET Net News Agency, 12 March 2018] UBS Global Research remains positive on Chinese
life insurers due to interest rate tailwinds and long-term growth potential from
protection products, but it sees near-term weakness on savings products from regulatory
changes and competition.
Following the recent pullback, the sector's valuation of 1.1x 2018 P/EV reflects a
structural slowdown in growth and a >100bp buffer on the interest rate.
UBS expects life sector average NBV growth of 29% in 2017, implying 12% growth in 2H
2017. With intensifying competition from wealth management products (WMPs) offered by
banks, the research house now expects 2018 NBV sector growth to soften to 13%, but to
improve throughout 2018 and return to 21% in 2019.
UBS revised the target prices for the insurers it covers as follows:
Name Rating Target price
----------------------------------------------------
Ping An (02318) Buy HK$109 from HK$106
China Life (02628) Buy HK$32.60 from HK$35.10
CPIC (02601) Buy HK$47.20 from HK$49.20
NCI (01336) Buy HK$65.60 from HK$70.20
CTIH (00966) Buy HK$38.90 from HK$40.30
PICC Group (01339) Buy HK$5.40 from HK$5.20
PICC P&C (02328) Buy HK$19.90 from HK$20.00
Zhong An (06060) Neutral HK$76.50 from HK$79.50
China Re (01508) Neutral HK$1.86 from HK$1.87

(KL)