[ET Net News Agency, 6 December 2019] Morgan Stanley cut its target price for China
Taiping Insurance (CTIH)(00966) to HK$21 from HK$24 and maintained its "equal-weight"
rating due to lack of near-term catalysts.
The research house said CTIH's shares have surprisingly declined 16% year-to-date in
2019, underperforming peers and MSCI-China by a significant amount. Despite its
expansionary strategy, the company will likely suffer VNB (value of new business) decline
in 2019.
Coupled with a slowing agency expansion (a key leading indicator for mass agent growth
model), its valuation is at new lows - zero value for life business and only 0.8x
2020 Group BV. Morgan agrees the discount to peers looks unreasonable. (KL)