Macquarie released a research report saying that Ping An Insurance(02318) the valuation was near an all-time low and the market unanimously took a "buy" view of the stock. The bank resumed its coverage of the company but was rated as "outperforming the market" with a target price of HK $50.

The bank believes that the market is too optimistic about Ping an's new business value (NBV) and return on equity over the next three years. In the medium term, the bank expects Ping an to continue to receive a downward valuation review due to the decline in NBV profit margins and investment returns. Even if the valuation of the company is attractive in terms of the connotative value of the stock price, the stock has a potential downward trend in terms of sensitivity analysis.

Macquarie said the value of Ping an's new business is expected to shrink again. Due to falling demand for private health insurance, the share of regular payment products in first-year premium income shrank from 57 per cent in 2020 to 50 per cent in 2023. NBV profit margins are expected to fall from 38.9 per cent in 2020 to 33.9 per cent in 2021 and further to 30.7 per cent in 2022 as a result of ongoing product portfolio changes towards low-margin savings products. The value of new business fell 16% and 11% respectively in the year after next year.