Bank of America Securities: Lowered the target price of PICC P&C (02328) to 18.4 Hong Kong dollars, maintaining a "buy" rating.

Bank of America Securities released a research report stating that, considering the expected deterioration in the comprehensive cost rate and the slowing growth, it has lowered the profit forecast for PICC P&C (02328) for the years 2026 to 2027 by 11% to 14%, and the long-term return on equity from 19.8% to 18%. The target price has been lowered from HK$20.9 to HK$18.4, while maintaining a "buy" rating. PICC P&C's net profit increased by 25% year-on-year to 40 billion RMB last year, driven by strong investment income. The core business performance was stable, with premium income increasing by 3% year-on-year, and the combined ratio decreased from 98.8% in 2024 to 97.5%. The full-year dividend per share was 0.68 RMB, an increase of 26% year-on-year, with a payout ratio of 37%. While the decrease in investment income in the fourth quarter of last year and potential underwriting losses may attract market attention, the overall performance is in line with expectations. The total investment return rate increased from 5.7% in 2024 to 5.8%, benefiting from the rebound in the mainland stock market, and interest income was also better than peers.