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2026-10-16 12:20:40 BofA Securities published a research report stating that it expects Chinese insurers to post weak third-quarter results, mainly dragged by a sharp decline in investment income and slow sales growth. Under the current weak market sentiment, the results may negatively affect share prices. Even if performance rebounds in the fourth quarter, it may still be insufficient to drive positive full-year earnings growth in 2026. After adjustments, the broker expects DPS to remain broadly flat YoY, while insurers are currently offering dividend yields of around 4.0% to 6.5%. The broker noted that the Shanghai Composite Index, ChiNext Index and STAR 50 Index fell 6%, 28% and 31% QoQ respectively in the third quarter, marking the steepest quarterly declines in the history of the ChiNext and STAR boards. This reduced the likelihood for insurers to record positive unrealized gains during the period. Insurers with more aggressive investment strategies and higher exposure to growth stocks are expected to suffer greater losses. In terms of sales and value of new business, momentum had already slowed in the second quarter, while the high comparison base from the guaranteed interest rate cut in 3Q25 also weighed on expected value of new business growth. On a cumulative nine-month basis, CHINA LIFE (02628.HK) may be the only life insurer to maintain positive YoY growth in value of new business. The broker expects PING AN (02318.HK) to record declines of 62% and 16% respectively in third-quarter and nine-month value of new business, while third-quarter earnings are expected to plunge 81% YoY to RMB12.3 billion and nine-month earnings to fall 21% YoY to RMB104.9 billion. It cut 2026-2028 earnings forecasts by 12% to 15%, while lowering the target prices for its H shares and PING AN OF CHINA (601318.SH) A shares to HKD65 and RMB63 respectively, while maintaining a Buy rating. CHINA LIFE is expected to record a net loss of RMB48.1 billion in the third quarter, while nine-month net profit is forecast at RMB86.4 billion, down 49% YoY. Earnings forecasts were cut by 6% to 27%, while target prices for its H shares and CHINA LIFE (601628.SH) A shares were both lowered to HKD29 and RMB29 respectively. The H shares retained a Buy rating, while the A shares maintained an Underperform rating. CPIC (02601.HK) is expected to see nine-month value of new business decline 11%, while third-quarter earnings are forecast to drop 83% YoY to RMB3 billion and nine-month earnings to decline 26% YoY to RMB33.8 billion. Earnings forecasts were cut by 9% to 25%, while target prices for its H shares and CHINA PACIFIC INSURANCE (601601.SH) A shares were lowered to HKD37.5 and RMB32.5 respectively. The H shares maintained a Buy rating, while the A shares retained an Underperform rating. NCI (01336.HK) is expected to post a 15% decline in nine-month value of new business, while recording a third-quarter net loss of RMB5.9 billion. Nine-month net profit is expected to fall 49% YoY to RMB16.9 billion. Earnings forecasts were cut by 9% to 37%, while target prices for its H shares and NCI (601336.SH) A shares were lowered to HKD34 and RMB33.7 respectively. Both the A shares and H shares maintained Underperform ratings. PICC P&C (02328.HK) is expected to report combined ratios of 98.9% and 95.7% respectively for the third quarter and nine months, while posting a third-quarter net loss of RMB2.7 billion. Nine-month net profit is expected to decline 26% YoY. Earnings forecasts were cut by 10% to 17%, while the target price was reduced by 10% to HKD17.2. The Buy rating was maintained. PICC GROUP (01339.HK) is expected to record a third-quarter net loss of RMB5 billion, while nine-month net profit is forecast to decline 31% YoY. The broker cut its earnings forecasts by 15% to 19%, while lowering target prices for its H shares and THE PEOPLE'S INSURANCE (601319.SH) A shares to HKD6.45 and RMB5.75 respectively. The H shares maintained a Buy rating, while the A shares retained an Underperform rating. (ad/da)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |