[ET Net News Agency, 6 May 2021] UBS Global Research lifted its target price for Zhong
An Online P&C Insurance (06060) to HK$48.2 from HK$39 and maintained its "neutral" rating
as its growth prospect is well priced in.
The research house believes the newly implemented regulations on short-term health
insurance could help improve the competitive landscape for Zhong An. UBS expects 2021-23
gross written premium (GWP) CAGR of 24%, mainly driven by health and digital lifestyle
ecosystems. It forecasted a combined ratio of 103.5% for 2021 and improving to 98.9% in
2022, partly on easing competition on channel fee.
However, UBS believes Zhong An remains reliant on third-party partners and content
platforms (e.g. Douyin) for client acquisition, while conversion to direct sales has been
slightly behind our expectations. (KL)