UBS raises target price of Chinese property insurance to 20.7 Hong Kong dollars, performance in the first half of the year exceeds expectations.

UBS released a report stating that the performance of Chinese property insurance in the first half of this year exceeded market expectations. They believe that the growth in net profit after tax is driven by the following factors: underwriting profit surged by 45% annually, and total investment income increased by 27% annually. In their forecast for 2025, UBS predicts that total premiums, automobile insurance premiums, and non-automobile insurance premiums will grow by 4.5%, 3.5%, and 5.8% respectively. The company aims to have a comprehensive cost ratio of less than 96% for automobile insurance and around 99% for non-automobile insurance. UBS stated that investment income growth may slow down in the third quarter due to factors such as the high stock market return benchmark and rising interest rates leading to lower fair value of bonds. UBS has raised their forecast for China Property Insurance's net asset value and after-tax profit by 4% and 6%, reflecting better-than-expected comprehensive cost ratios and improved market sentiment. They have also adjusted their valuation multiples to reflect a more favorable macroeconomic environment and policy tailwinds, thus raising China Property Insurance's target price from HK$18.7 to HK$20.7 and rating it as a buy.