[ET Net News Agency, 4 June 2018] HSBC Global Research continues to believe that life
new business momentum will recover in 2018, but it said that the negative initial impact
of document 134 has been larger than it had first anticipated.
Moreover, the implications of the sales slowdown for agency retention and recruitment
have probably been more significant than expected, said the research house.
It now estimated 2018 NBV growth for Ping An of 7.5% (19% previously), China Pacific of
4% (11%), China Life of 3% (9%), PICC of 0% (8%), and NCI of -12% (9%) after updating its
estimates.
HSBC believes motor rate liberalisation will continue to be gradual to avoid market
disruption; as such, the impact on profitability will continue to be benign.
Its revised target prices for the Chinese insurers are as follows:
Name Rating Target Price
------------------------------------------------------
China Life (02628) Buy HK$26
China Pacific (02601) Buy HK$45 from HK$47
China Re (01508) Hold HK$1.77 from HK$1.84
New China Life (01336) Buy HK$44 from HK$51
PICC Group (01339) Hold HK$4 from HK$3.8
PICC P&C (02328) Buy HK$18
Ping An (02318) Buy HK$109 from HK$116

(KL)