[ET Net News Agency, 6 January 2020] Nomura raised its target price for Ping An
Insurance (02318) to HK$124.79 from HK$115.47 and maintained its "buy" rating.
The research house thinks Ping An Life will continue to focus on business quality and
retain its sustainable development strategy, which will bring long-term rewards, despite
temporary growth pressure due to business transition.
With the release of Document 134 in 2H 2017, life insurers were encouraged to get back
to the basics of protection and long-term savings, and thus Nomura thinks Ping An's
ongoing reform is very necessary. As a result, Nomura expects to see modest NBV growth in
FY2019, as (1) it takes time for agents to adapt to new protection products, and (2)
agency headcount declined by 12% at September 2019 versus December 2018, due to increased
efforts to recruit high-quality agents and remove unproductive ones.
Nomura think the agency team transformation will continue into FY2020 since Ping An will
retain strict agent assessment standards. It revised its FY2019-21 NBV growth forecasts to
5%/8%/12%, from 8%/10%/10% previously. (KL)