UBS: Maintains China Financial Insurance's (02328) target price of HK$20 as a “buy” rating

The Zhitong Finance App learned that UBS released a research report stating that it will maintain the “buy” rating of China Financial Insurance (02328) and the target price of HK$20. The company expects the year-on-year increase in premiums to accelerate in the fourth quarter of 2026, mainly driven by non-car insurance, up 1.7% from the previous nine months.

Non-car insurance premium growth began to pick up in the third quarter, up 6.8% year over year, up 2.3% from the first half of the year, driven by rapid growth in personal businesses (such as health insurance) and the gradual resumption of “commission reform.” The positive factors are expected to become more apparent in the fourth quarter.

The company expects the personal non-car insurance segment to increase by 15% in 2026, and the growth of government-related non-car insurance premiums (such as agricultural insurance) is also expected to accelerate compared to the first half of the year. In terms of car insurance, the company expects premiums to remain roughly flat in 2026, as the increase in covered vehicles is offset by a decrease in average premiums per vehicle; in 2027, it aims to increase car insurance premiums at least at the same time as the industry.

Despite high natural disaster losses in the first nine months of 2026, the comprehensive cost ratio for non-car insurance remained stable at 98% year over year, indicating an improvement in potential profitability. The company reiterated the goal of a comprehensive cost ratio of less than 100% for non-car insurance in 2026, which is 100.8% compared to 2025, which means there will be a significant year-on-year improvement in the fourth quarter. In terms of car insurance, the company believes that improving the comprehensive cost rate in 2026 is an attainable target, compared to 95.3% in 2025.