Zhong Yin International released a research report stating that it maintains a target price of HKD 52 for Ping An Insurance (02318) and a "buy" investment rating.

CMB International stated that the issuance of Ping An Insurance's $3.5 billion H-share convertible bonds will have the following impacts: 1) obtain a net amount of $3.452 billion at a lower financing cost, increase the company's capital reserve, and reduce financial costs, while easing the dilution effect on existing shareholders; 2) assuming that all bonds will be converted without the issuance of new shares in the future, the proportion of H-shares will increase to 42.9% (currently 40.9%); combined with the fact that the company disclosed the cancellation of 0.103 billion repurchased A-shares on July 16, the proportion of H-shares is expected to further increase to 43.1%, which is beneficial for the overseas liquidity; 3) this financing provides the possibility for the group to increase the capital of core business subsidiaries, such as Ping An Life Insurance.

According to the report, assuming that Ping An Insurance will invest all the financing amount in Ping An Life Insurance, the bank estimates that the core solvency adequacy ratio of Ping An Life Insurance is expected to increase by 6.4 percentage points to 125% in the first quarter of 2024 based on the lowest capital level (core solvency adequacy ratio in the first quarter of 2024: 118.8%). In terms of trading, as convertible bonds imply a buying right for the company's stock, investors usually consider building a short position in stocks to hedge risks. It is expected that the company's stock price may fluctuate in the short term, but the adjustment range is controllable.