Ping An Insurance Company of China, the Financial sector company, was revisited by a Wall Street analyst today. Analyst Richard Xu from Morgan Stanley maintained a Buy rating on the stock and has a HK$89.00 price target.
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Richard Xu has given his Buy rating due to a combination of factors that highlight a positive turnaround at Ping An Insurance Company of China. The company is expected to achieve a group operating return on equity (ROE) of 14-15% by 2028, an improvement from the recent two-year average of 13.3%. Additionally, the company is projected to see a significant increase in its value of new business (VNB) with a compound annual growth rate (CAGR) of 21% over the next two years, reversing a previous trend of contraction.
Furthermore, Ping An’s operating profit is anticipated to improve with an 11% CAGR in the upcoming years, contrasting with a 12% decline observed in the past two years. Xu also notes the strategic adjustments Ping An is making in response to China’s evolving wealth management market, aging population, and healthcare insurance reforms. With a forecasted ROE of 14-15% and a cost of capital of less than 10%, Xu believes that the price-to-earnings (P/E) valuation of the company can return to double digits, making it an attractive investment opportunity.
According to TipRanks, Xu is a 3-star analyst with an average return of 3.8% and a 58.14% success rate. Xu covers the Financial sector, focusing on stocks such as Ping An Insurance Company of China, AIA Group, and Hong Kong Exchanges & Clearing.
In another report released on November 27, DBS also reiterated a Buy rating on the stock with a HK$72.00 price target.