[ET Net News Agency, 11 May 2020] Nomura cut its target price for China Reinsurance
(01508) to HK$0.97 from HK$1.02 and maintained its "buy" rating.
The research house cut its FY2020 earnings forecast by 12% to CNY5.2bn, implying 14%
decrease, due to weaker-than-expected 1Q earnings numbers from its quarterly solvency
report.
Based on the consolidated financial results from the 1Q solvency report, China Re Group
reported a net loss of CNY28mn for 1Q, versus net profit of CNY1,293mn for 1Q 2019, mainly
dragged by (1) life reinsurance business recording net loss of CNY295mn for 1Q, versus net
profit of CNY202mn for 1Q 2019, and (2) direct P&C business recording net profit down by
33% to CNY149mn, though P&C reinsurance business reported net profit growth of 11% to
CNY241mn.
Nomura lowered its long-term ROE assumption for the life reinsurance business to 8.5%
from 9%, in addition to the earnings forecast change above. (KL)