Guotai Haitong maintains a "hold" rating on PICC P&C (02328) with a target price of 22.82 Hong Kong dollars.

Guotai Haitong released a research report stating that the short-term personnel changes at PICC P&C (02328) do not change the long-term stability of its business strategy, and they are optimistic about the continuous improvement in underwriting profitability. They maintain their EPS forecast for 2025-2027 at 2.14/2.40/2.55 yuan, maintain a P/B ratio of 1.6 times for 2025, and maintain a target price of 22.82 Hong Kong dollars. They expect that the short-term personnel changes at the company will not affect its long-term operational stability and are optimistic about the clear strategic planning for motor and non-motor insurance driving continuous improvement in underwriting profitability, thus maintaining a "buy" rating. Guotai Haitong's main points are as follows: Interim leader appointment in place, expecting stable operation of core business On December 9th, the company announced the appointment of Mr. Zhang Daoming as the interim leader. Mr. Zhang has 27 years of management experience in the insurance industry and has been involved in the company's operations for a long time. Previously, the company announced that Yue Guanzeng resigned from his positions as executive director, vice chairman, and president for personal reasons. The firm believes that the short-term personnel changes will not change the company's strategic requirement to become a "first-class" group, continue to deepen reform and innovation, and improve the established development path for operational management. It is expected that core businesses such as motor and non-motor insurance will continue to operate steadily. Clear strategic planning, optimistic about long-term growth in premiums and profits The firm expects the company's underwriting profitability in motor insurance to continue to consolidate its advantage, while non-motor comprehensive management and overseas business will further open up growth opportunities. 1) Under the background of comprehensive reform, the company's motor insurance comprehensive cost ratio structure has been significantly optimized. By continuously optimizing its business structure and enhancing cost control measures, stable underwriting profitability is achieved. 2) In October 2025, the China Banking and Insurance Regulatory Commission issued a notice on strengthening the supervision of non-motor insurance business, which clearly stipulates the requirement for "reporting and conducting together". PICC P&C, as a leading insurance company, has been rigorously implementing regulatory requirements, including developing demonstration products for new insurance and liability insurance, initiating non-motor insurance product transformation, and comprehensive non-motor insurance cost management. It is expected that the comprehensive governance of non-motor insurance will continue to contribute incrementally to the improvement of underwriting profitability. 3) The company actively responds to the country's call to build an overseas business model focusing on serving the "Chinese enterprises" and "Chinese products" markets. In the first three quarters of 2025, the company underwrote 618 key projects of the "Belt and Road" initiative, and its new energy motor insurance business has landed in Hong Kong and Thailand. It is expected that the continuous expansion of overseas business will be favorable for creating a growth driver for the company's premiums. Catalyst: Equity markets rebounding beyond expectations. Risk factors: Frequent large-scale disasters; Decline in long-term interest rates; Volatility in the equity markets.