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<Research>G Sachs Expects More CN Insurers to Announce Measures to Lift Shareholder Returns, Keeping Rating Buy on PING AN/ CHINA LIFE
Recommend 37 Positive 54 Negative 13 |
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Since early March, Chinese insurance stocks have outpaced both the HSI and the CSI 300 Index, according to a Goldman Sachs report. Despite mixed results for FY24 and 1QFY25, the broker attributed this share price performance to liquidity factors, including potential rebalancing by China's mutual funds and expectations of larger insurance capital inflows into the A-share market. The report also mentioned that Chinese insurers have made substantial improvements in shareholder returns in recent months, with several of them announcing targets to stabilize or gradually increase dividends, and either considering or already proposing share buyback plans. Goldman Sachs viewed this as in line with the government's goal of boosting state-owned enterprise valuations and estimated more insurers to announce measures to enhance or stabilize shareholder returns. Among the insurers under the broker's coverage, CHINA LIFE (02628.HK) had the largest mismatch between its strong balance sheet and currently low payout ratio, while PICC P&C (02328.HK) was best positioned to lift shareholder returns with an estimated RMB47 billion in excess capital for FY24. Goldman Sachs upgraded PICC P&C's rating from Neutral to Buy and raised its target price from HKD12.9 to HKD16.1. As for CHINA LIFE and PING AN (02318.HK), the broker kept the Buy rating on both companies, with the former's target price added to HKD17.5 from HKD16.5 and the latter's to HKD51 from HKD49. AAStocks Financial News |
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