[ET Net News Agency, 5 November 2020] Morgan Stanley lowered its target price for PICC
Group (01339) to HK$4 from HK$4.3 and maintained its "overweight" rating.
The research house cut our earnings forecasts by 2%-9% for 2020-22 to incorporate the
negative auto deregulation impact on the P&C unit. Morgan lifted its Life earnings
forecasts by 3%-13% for 2020-22 to incorporate stronger-than-expected earnings results in
3Q, which was likely driven by strong investment performance.
Morgan cut its VNB forecasts by 5% for 2020-22 to incorporate the slowdown in new sales
in the Life unit from 3Q. It noted that PICC Group is shifting away from low-margin
bancassurance and rebuilding its agency business. It still has more headroom to expand its
sales force and improve the mix, which could support higher-than-peers' growth. (KL)