Bank of America Securities released a research report stating that it reaffirms its 'buy' rating on PICC Group (01339). Given the high assumptions for investment income and property insurance revenue in the 2024 fiscal year, its profit forecast for 2024 has been raised by 30%, and the profit forecast for the 2025 to 2026 fiscal years has been raised by 1% to 2%. The target price has increased from HKD 3.6 to HKD 3.7.
The report states that PICC Group's performance in the first half of this year has shown steady growth, and it has distributed interim dividends for the first time. The bank predicts that the dividend payout ratio for the 2024 fiscal year will stabilize at 30%, and its dividend per share growth will be consistent with profit growth. The bank points out that as the risk of catastrophic losses gradually decreases, PICC will be able to maintain its comprehensive cost ratio for auto insurance below 97% and its comprehensive cost ratio for non-auto insurance below 100%.