[ET Net News Agency, 15 January 2021] Morgan Stanley lowered its target price for Ping
An Insurance (02318) to HK$150 from HK$152 and maintained its "overweight" rating.
The research house cut Ping An's 2020 VNB (value of new business) forecast by 7%, to
Rmb53bn, implying a 30% decline from 2019, likely one of the worst among those of listed
peers.
Ping An just released its December premium data (down 51% on GAAP basis), resulting in a
33% FYP (first year premiums) decline in 4Q. Even if assuming a sequentially improved
margin to >40% in 4Q, this could still mean a 40% VNB decline in 4Q due to weak volume.
Morgan cut its 2021 and 2022 VNB, by 7% and 6%, respectively, to reflect the potentially
worse than expected 2020 result. (KL)