[ET Net News Agency, 24 July 2020] Morgan Stanley tweaked its target price for China
Reinsurance (01508) to HK$0.9 from HK$0.8 and maintained its "underweight" rating.
The research house said China Re's share price is still down -30%, year-to-date,
underperforming peers with the lowest valuation of 0.4x 2020 P/B amongst the sector. Its
valuation has largely bottomed out (cash is 75% of market cap), but Morgan thinks it is
fair, considering its 7% ROE (return on equity) in 2020.
It is running at a 5.1% 2020 dividend yield, no longer high relative to other names'
yields under Morgan's coverage. Re-rating may not be imminent given its poor track record,
opaque business model, and slow pace to divest capital and improve ROE, the research house
noted. (KL)