Positive Legislative Developments and Strategic Growth Drive Buy Rating for ZhongAn Online P & C Insurance Co., Ltd.

CMB International Securities analyst Nika MA has maintained their bullish stance on 1ZO stock, giving a Buy rating on May 29.

Nika MA has given his Buy rating due to a combination of factors influencing ZhongAn Online P & C Insurance Co., Ltd. The recent surge in ZhongAn’s share price was largely driven by positive sentiment following the passage of the Stablecoins Bill and the advancement of the GENIUS Act, which are expected to enhance the company’s valuation. This legislative progress is anticipated to provide significant opportunities for ZhongAn, especially as the Stablecoins Ordinance comes into effect, potentially benefiting the company through its stake in RD Technologies.
Nika MA also highlights the robust growth in ZhongAn’s insurance segment, particularly in health and auto premiums, which supports a strong margin profile. Additionally, ZhongAn’s banking arm, ZA Bank, is well-positioned to capitalize on the stablecoin boom in Hong Kong, potentially boosting net interest income through reserve banking services for stablecoin issuers. The combination of these factors, along with an improved product mix and strategic scaling down of low-margin businesses, underpins the positive outlook and Buy rating for ZhongAn’s stock.

In another report released on May 29, Morgan Stanley also maintained a Buy rating on the stock with a HK$15.00 price target.