Goldman Sachs: Giving Human Insurance Group (01339) a target price of HK$7 for the “buy” rating

The Zhitong Finance App learned that Goldman Sachs released a research report saying that the day before yesterday (6th), the People's Insurance Group (01339) announced the issuance of new A shares to the Ministry of Finance, raising up to 15 billion yuan. At the same time, five other insurance companies also received capital injections, which together received capital support of up to 70 billion yuan from the Ministry of Finance. Goldman Sachs gave Human Insurance H shares a “buy” rating, a target price of HK$7, and a “sell” rating for Human Insurance (601319.SH) A shares, with a target price of RMB 6.4.

The bank believes that this capital support is a sign that the central government supports the insurance industry. The scope of capital injections is roughly in line with market expectations. They are all centrally managed insurance companies, similar to state-owned banks; however, the scale is far lower than the 200 billion yuan mentioned in earlier news reports, which is equivalent to an average of 5.6% of the net assets of the five companies for the 2025 fiscal year. Both the People's Insurance Group and China Reinsurance said that the special shareholders' meeting is expected to be held at the end of September, and approval from regulators such as the General Financial Supervisory Authority and the China Securities Regulatory Commission is still required thereafter.

For China People's Insurance Group, according to the average transaction price for the 20 trading days before the announcement, the number of issued shares is estimated at about 2.02 billion shares, which is equivalent to about 4.6% of the issued shares. According to the bank, all proceeds will be used to supplement the capital base and support continued business operations; the additional 15 billion yuan share capital can increase the core and comprehensive solvency ratio by 6 percentage points, and the company reaffirms its intention to maintain stability and increase dividends in the long term.