[ET Net News Agency, 20 April 2018] Nomura cut its target price for China Reinsurance
(01508) to HK$2.04 from HK$2.07, but upgraded its rating to "buy" from "neutral" as the
new target price implies 23% potential upside.
The research house cut its FY2018/19 earnings by 4-6% for the P&C direct business,
mainly due to the surprise additional tax, but maintained its view of a largely
stabilising combined ratio of 99.9% in FY2018-20, as loss ratio deterioration would be
offset by expense ratio improvement.
It said China Re currently trades at 0.8x FY2018 P/B (BVPS: RMB1.84), with FY2018 ROE of
9.2%, at the low-end of its historical range. (KL)