UBS: Raises target price for PICC P&C (02328) to 22.5 Hong Kong dollars, expected to double net profit in the last quarter.

UBS released a research report stating that it has raised its 2025 net profit forecast for PICC P&C (02328) by 19%, but believes that the dividend growth may not necessarily catch up with the profit growth. Currently, it is forecasted that the dividend will increase by 20% year-on-year to 0.65 Chinese yuan, with a dividend yield of about 3.8%. The target price has been raised from 21.8 Hong Kong dollars to 22.5 Hong Kong dollars, with a "buy" rating. PICC P&C released a profit pre-announcement, expecting a 40% to 60% year-on-year increase in net profit for the first nine months according to Chinese accounting standards, which means that the net profit for the third quarter is expected to increase by about 50% to 108%, reaching 14 billion to 19 billion yuan, expected to achieve the strongest third quarter performance in history. UBS believes that the strong performance of the property and casualty insurance in the third quarter exceeds expectations, driven by the turnaround in underwriting profits and strong growth in investment income. The bank estimates that the combined ratio for the first nine months improved by 1.7 percentage points year-on-year to 96.5%, and expects the combined ratio to continue to improve year-on-year in the fourth quarter.