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Jefferies report: China's life insurance stocks rose well in the first half of the year, but structural challenges still exist
According to JefferymobilescratchAccording to the latest analysis, Chinese life insurance stocks have performed strongly since the beginning of the year, with gains of 20% to 40%. This performance was due to the stability of the interest rate market and improved market sentiment. However, the agency emphasized that the industry still faces structural challenges and advised investors to choose investment targets carefully.
The bank predicts that China's life insurance industry's profitability in the second quarter may show an annual improvement, although the value of new business may be limited by a higher base. Jefferies pointed out that seasonal dividend income and a low base effect in the stock market will favor quarterly and annual growth in investment income and earnings, but a high base between May and July may inhibit growth in the value of new business.
In terms of individual stock selection, Jefferies prefers Ping An of China, citing its reasonable valuation, strong underwriting profitability and high transparency of investment accounts. In addition, the bank believes that Ping An provides attractive relative value.
Jefferies 'rating on China Life was upgraded to neutral from "underdog" based on expectations of stable long-term interest rates and improved second-quarter earnings prospects. At the same time, the bank maintains its "buy" rating on property insurance and its "underperform" rating on Xinhua Insurance.