JP Morgan: Lower CHINA RE (01508) target price to 1.4 Hong Kong dollars, rating "neutral"

JP Morgan released a research report stating that CHINA RE (01508), as one of the top eight global reinsurance companies, holds a dominant position in the mainland Chinese market with a market share of nearly 50%. Its investment theme is closely related to the global reinsurance underwriting trends. In the first quarter of 2026, the comprehensive cost ratio for property and casualty reinsurance of major global peers ranged from 66.8% to 83.6%, showing better performance than market concerns. The bank believes that CHINA RE has fallen 23% year-to-date, while the Hang Seng Index has risen 3% during the same period, indicating an excessive underperformance in recent months. JP Morgan has lowered the target price of CHINA RE from 1.6 Hong Kong dollars to 1.4 Hong Kong dollars, maintaining a "neutral" rating. The bank mentioned that there are two structural factors that may limit the revaluation of its valuation: the profitability momentum brought by non-reinsurance business segments (accounting for 13% of pretax profits) and the lower comparability with global peers; and the structure of domestic reinsurance contracts that restrict the profit sharing of large reinsurance businesses.