[ET Net News Agency, 7 August 2020] Nomura lowered its target price for China Pacific
(CPIC)(02601) to HK$30.61 from HK$31.62 and maintained its "buy" rating.
The research house expects CPIC's net profit growth of 4% in 1H, implying 21% decrease
in net profit for 2Q, because of the high base effect, including (1) a one-off tax refund
of CNY4.9bn was booked in 2Q 2019; and (2) the 750-day moving average of government bond
yield declined, as the base of reserving discount rate dragged down earnings growth for
1H, whereas its increase had boosted the base in 1H 2019.
Nomura expects NBV (new business value) to have decreased by 28% for 1H, as the weak
growth momentum continued into 2Q. It expects CPIC's life business growth to pick up
gradually in 2H. It cut its FY2020-22 earnings forecasts by 6%/5%/6%. (KL)