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<Research>JPM Downgrades PICC P&C/ PICC GROUP to Neutral, Predicts Non-life Insurance Cycle to Peak
Recommend 14 Positive 24 Negative 9 |
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PICC P&C (02328.HK) and PICC GROUP (01339.HK) have benefited from years of improvement in non-life insurance underwriting, and lower investment book risk compared to life insurance peers, leading to surges in their share prices by 1.37/ 1.7x over the past 4 years, compared to an 8% rise in the HSI during the same period, JPMorgan released a research report saying. The broker suggested investors to take profits now, and downgraded both stocks from Overweight to Neutral, believing the non-life insurance underwriting cycle has peaked with limited further upside catalysts. Conversely, JPMorgan believed that Chinese life insurers are in a upward EPS and dividend revision cycles, and preferred CHINA LIFE (02628.HK) and PING AN (02318.HK) based on EPS forecast adjustments and dividend yield. The broker also believed that the base effect provides a buffer for quarterly earnings growth figures of life insurers, and recommended investors to focus more on earnings forecast adjustments rather than 3Q25 results. The table below lists JPMorgan's latest ratings and target prices for Chinese insurers: Stock│ Rating│ TP CHINA LIFE (02628.HK)│Overweight│$31 PICC P&C (02328.HK)│Overweight→ Neutral│$19→$18 PICC GROUP (01339.HK)│Overweight→ Neutral│$7.3→$7.1 NCI (01336.HK)│Overweight│$61→$65 CPIC (02601.HK)│Neutral│$32→$35 CHINA LIFE (02628.HK)│Overweight│$80 AASTOCKS Financial News Website: www.aastocks.com |
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