Citigroup: Slightly lowers target price for CHINA RE (01508) to HKD 1.5 and raises profit forecast for this year.

Citigroup published a research report stating that following the announcement of CHINA RE's (01508) first-half performance, it updated its model and raised the 2026 net profit forecast by 12% to RMB 11.293 billion to reflect the downward adjustment in insurance service fee forecasts. It also slightly lowered the net profit forecasts for 2027 and 2028 by 1% each to account for weaker growth in insurance revenue. The bank adjusted CHINA RE's target price from HKD 1.55 to HKD 1.50, maintaining a "Neutral/High Risk" rating. Citigroup noted that since the company will no longer disclose embedded value data starting in the first half of 2026, it has changed the valuation of life and health reinsurance business to be based on the market price of comprehensive equity, and it lowered the price-to-book ratio of the original property and casualty insurance business from 0.5 times to 0.3 times to reflect the downward trend in return on equity. Citigroup forecasts that CHINA RE's net profits for the years 2026 to 2028 will be RMB 11.293 billion, RMB 10.544 billion, and RMB 11.523 billion, respectively.