UBS: Maintaining China Taibao's (02601) “Buy” rating and raising the target price to HK$33

The Zhitong Finance App learned that UBS released a research report stating that it maintained China's Taibao (02601) “buy” rating and raised the target price from HK$24 to HK$33. Assuming that the stock market remains stable in the future, the bank expects China Taibao's net profit growth to slow in the fourth quarter. It believes that this year's dividend per share will be 1.04 yuan, and the dividend yield will be 4%.

According to the report, China Taibao predicts that net profit for the first three quarters will increase by 60%-70% to 370-39 billion yuan, exceeding market expectations and benefiting from a sharp rebound in stock market investment income; while the company's net profit for the third quarter will reach a record high of 12 billion to 14 billion yuan, and the market is expected to raise the company's net profit forecast for the full year.

UBS expects the value of China Taibao's new life insurance business to increase by about 35% year-on-year in the first three quarters, which means it will rise 65% in the third quarter, benefiting from strong sales in the new business before interest rate cuts, but sales momentum may have slowed in the fourth quarter. As for property insurance, the premium growth trend is expected to continue, but the comprehensive cost ratio will be under pressure in the third quarter because the company has a relatively high risk exposure in the Yangtze River Delta, and the region was hit by the typhoon in the third quarter, causing certain economic losses.