BofA warns Fed risks policy mistake with early rate cuts
On Tuesday, Goldman Sachs analyst Thomas Wang upgraded PICC Property & Casualty Co Ltd (2328:HK) (OTC: PPCCY) stock rating from Neutral to Buy and increased the price target to HK$16.10, up from the previous HK$12.90. Wang’s optimism is rooted in the company’s advantageous position to capitalize on the Chinese government’s initiative to enhance the valuations of state-owned enterprises (SOEs).
PICC P&C, according to Wang, is poised to improve its return on equity (ROE) and overall valuation through strategic shareholder return initiatives. These could be enacted either at the company or the broader PICC Group level, utilizing the substantial excess capital at its disposal.
The revised price target of HK$16.10 is based on a calculated 0.8X multiple applied to the company’s excess capital and a 1.2X price-to-book (P/B) ratio for its underlying operations. This target suggests a 7% potential upside for PICC P&C, compared to a 6% potential downside for its H-share peers.
In addition, Goldman Sachs has raised its FY25 net profit estimates for PICC P&C by 20%. This adjustment reflects an anticipated recovery in the equity market following an early April decline and a slightly increased profit contribution from investments in associates. Minor adjustments were also made to the FY26-27 net profit estimates, with a 1% increase.
The firm has also updated its book value projections for FY25-27, with a 1% increase to account for the revised profit estimates. This comprehensive analysis by Goldman Sachs underscores a positive outlook for PICC P&C, underpinned by strategic capital management and favorable market conditions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.