JPMorgan Trims CHINA RE Target Price to HK$1.6, Keeps "Neutral" Stance

Stock News
Apr 13

JPMorgan released a research report stating that CHINA RE (01508) has underperformed the broader market in terms of share price performance this year, primarily reflecting weakened market expectations for its underwriting margin outlook in the 2026 fiscal year. However, the bank believes the market is overly pessimistic. Reasons include sustained improvement in the profitability of its overseas business, particularly Chaucer, coupled with anticipated margin expansion in its domestic property and casualty insurance operations, which are expected to partially offset pressures from the macroeconomic environment. The bank lowered its target price for CHINA RE from HK$1.8 to HK$1.6, while maintaining a "Neutral" rating. Consequently, the bank reduced its profit forecast for CHINA RE for the 2026 fiscal year by 5% to RMB 10.7 billion, representing a year-on-year growth of 9%, which is broadly in line with the forecast levels for its Chinese insurance peers. The current share price corresponds to a forward price-to-earnings ratio of only 5 times for 2026, with a dividend yield of 6%. Due to its relatively small market capitalization and limited average daily trading volume, it is difficult to attract broad investor participation. The likelihood of the stock being included in the Hang Seng Index or the Hong Kong Stock Connect scheme within the next 6 to 12 months is considered very low.

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