CMB International has released a research report maintaining a "Buy" rating on Ping An (02318) while increasing its H-share target price from HK$75 to HK$90. This new target corresponds to a projected 2026 price-to-embedded-value (P/EV) ratio of approximately 0.9 times and a price-to-book (P/B) ratio of 1.24 times.
On a comparable basis, the firm anticipates that Ping An's group post-tax operating profit will increase by 12% year-on-year to RMB 136 billion in 2025. This implies a significant acceleration, with fourth-quarter operating profit expected to surge by approximately 46% year-on-year.
The accelerated growth is primarily attributed to robust operating profit expansion in the life and health insurance segments, a reduction in impairment losses within the asset management business, and stable underwriting profits from the property and casualty insurance unit.
The report also highlights Ping An's ongoing expansion of its bancassurance channel, which now covers approximately 19,000 non-Ping An Bank outlets. CMB International believes the bancassurance channel holds substantial potential for further penetration, especially as household savers increasingly seek stable returns.
Consequently, the firm projects that Ping An's new business value (NBV) will grow by 41.7% and 17.7% year-on-year in 2025 and 2026, respectively.
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