Nika MA, an analyst from CMB International Securities, has initiated a new Buy rating on China Taiping Insurance Holdings Co (CINSF).
Nika MA has given his Buy rating due to a combination of factors including China Taiping’s impressive financial performance and strategic improvements. The company reported a significant increase in net profit by 36.2% year-over-year, despite higher income tax charges due to the transition to IFRS17. Pre-tax profit also saw a substantial rise of 90% year-over-year, aligning with expectations. Additionally, the net value of new business (NBV) soared by 90% year-over-year on a like-for-like basis, supported by enhanced margins and a favorable product mix.
Furthermore, the company’s property and casualty (P&C) segment showed remarkable growth, with net profit surging 831% year-over-year, contributing significantly to the overall profit. The investment income also increased substantially by 98.2% year-over-year, driven by a strategic shift towards higher-yield investments. The stock’s valuation appears attractive, trading at low price-to-embedded value (P/EV) and price-to-book (P/B) ratios, with a projected return on equity (ROE) exceeding 13% over the next three years. These factors, combined with a target price of HK$15, suggest a potential upside of 29%, justifying the Buy rating.
CINSF’s price has also changed slightly for the past six months – from $1.550 to $1.500, which is a -3.23% drop .