Morgan Stanley reclassified AIA (01299) as the preferred insurance stock, while PICC GROUP (01339) was upgraded to "hold".

Morgan Stanley released a report stating that AIA (01299) is the top choice for insurance stocks in Hong Kong and mainland China, maintaining a "overweight" rating with a target price of HK$88. At the same time, the rating for PICC GROUP (01339) has been upgraded from "in line with the market" to "overweight", with a target price raised from HK$3.1 to HK$4.1. Morgan Stanley believes that the new business value of insurance stocks in Hong Kong and mainland China is expected to remain healthy, and in the long term, insurance companies will continue to remove risks with disciplined investment strategies to strengthen their balance sheets and efficient operations. It is expected that as leverage is gradually removed, investors will reassess high-quality insurance stocks. Morgan Stanley believes that AIA's foundation remains solid, and a potential interest rate cut by the Federal Reserve may benefit the enterprise value (EV) and profits of Hong Kong stocks and AIA, as well as insurance product sales. Morgan Stanley sees potential for AIA to expand its operations in mainland China to more provinces, which they see as a catalyst. Morgan Stanley also noted that PICC GROUP's subsidiary, PICC P&C (02328), has stable operations, a healthy combined ratio (CoR), and a strong return on equity, remaining a major contributor to the group's profits. The quality of the life and health insurance business has significantly improved, and with the support of lower pricing rates, this trend is expected to continue. Additionally, with the group's disciplined investment strategy and historically minimal risks, its valuation remains attractive.