Goldman Sachs published a research report and gave China Taiping a target price of HK$7.9, which was rated as “selling.” According to the report, China Taiping's net profit for the first half of 2023 was HK$5.2 billion, which is 38% and 14% higher than the bank's and market expectations, respectively. The value of the new life insurance business increased 19% year on year to HK$4 billion, which was 13% and 7% higher than the bank's and market expectations. According to the bank, the value of the new business exceeded expectations because the profit margin on the value of the new business was better than expected, especially in the agency channel. The bank attributed this to an increase in the regular product sales portfolio, which was sufficient to offset the impact of the increase in the savings product portfolio. Taiping Life's core solvency adequacy ratio improved slightly to 98% in the first half of the year. In the face of fluctuations in the investment environment, investment performance exceeded expectations.
According to the bank, considering the negative impact of foreign exchange headwinds and falling bond yields, total consolidated income for the first half of the year was HK$600 million, which meant that book value was growing slowly. Goldman Sachs believes that the new business value growth of China Taiping is the insurance stock it covers is facing the biggest headwind. It is expected that the value of the new business will fall in 2023.