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<Research Report>UBS Drops HKEX TP to $288; 'Offensive yet Defensive' Strategy for CPIC/ PICC P&C
A series of recent regulatory changes in China reflect the central government's policy approach to avoid systemic risk and enhance consumer protection, UBS issued a research re...
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<Research Report>UBS Drops HKEX TP to $288; 'Offensive yet Defensive' Strategy for CPIC/ PICC P&C
Recommend
25
Positive
36
Negative
26
 
 

A series of recent regulatory changes in China reflect the central government's policy approach to avoid systemic risk and enhance consumer protection, UBS issued a research report saying.

UBS expected Chinese life insurers to maintain single-digit growth in their net profit in 2024, mainly due to lower risk appetite and the stronger relative attractiveness of insurance products.

Related NewsBOCOMI Cuts CHINA LIFE (02628.HK) TP to $14; Rating Buy
UBS was bullish on life insurers, and believed that both CPIC (02601.HK)  +0.620 (+3.444%)    Short selling $106.96M; Ratio 28.500%   and PICC P&C (02328.HK)  +0.220 (+2.384%)    Short selling $23.86M; Ratio 8.891%   have "offensive yet defensive" strategy.

Of which, the former is expected to lead the industry in terms of sales performance, and has stable dividend payout, while the latter is attractive and stable due to the relatively low cyclicality of its P&C business and a dividend yield of around 7%.

UBS rated Buy on CPIC and PICC P&C. It raised its target price on PICC P&C to $10.6 from $10 and kept its target price on CPIC at $26.

Related NewsM Stanley: Policy Shift Blossoms Earlier Than Expected, Supporting Rebound of CN Financial Stocks
In addition, UBS longed for HKEX (00388.HK)  +4.000 (+1.511%)    Short selling $241.59M; Ratio 10.716%   's average daily turnover to rebound moderately. However, net investment income is expected to record a decline of over 10%.

It is expected that policy support will continue to improve liquidity and revitalize the IPO market, but the progress is subject to market sentiment. UBS kept rating at Neutral on HKEX, and trimmed target price from $296 to $288.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-05-03 16:25.)

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