<ET Net News Agency, 22 December 2010> Goldman Sachs raised its target price for PICC
(02328) to HK$11.6 from HK$9.2, and retained its "neutral" call.
The house lifted its earning forecasts for PICC for 2010/2011/2012 by 9.6%/27.6%/24.2%
for the following an upgrade of its premium growth assumptions, and modest reduction of
its loss ratio forecasts post meeting with management.
But Goldman believes any further improvement in combined ratios and underwriting profits
from 2011's peak level could be limited, as the high profitability of P&C insurers will
likely increase competition, especially if auto sales slow down in 2011.
Also, several cities have indicated plans to gradually liberalize auto insurance
pricing, partly due to requests from smaller insurers.
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