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2009-5-18 03:29:00 p.m. HKT, XFNA
DJ MARKET TALK: ML Cuts PICC Target Price To HK$3.54 From HK$3.65
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| 1519 [Dow Jones] STOCK CALL: Merrill Lynch cuts PICC P&C (2328.HK) target price to HK$3.54 from HK$3.65, after lowering FY09-11 earnings estimates by 10%-17%, on larger-than-expected deterioration in compulsory auto third party liability insurance alongside with higher expenses. Says while PICC demonstrated strong cost control in FY08, bringing expense ratio to 28.4% (vs historical average 30%), house believes expenese ratio will likely edge up to 30.0% ahead. "With mounting claims from catastrophes, PICC suspended bulk of its business trips and trainings in FY08, most of these will likely to resumed in FY09," says Merrill. Keeps at Underperform. Stock +1.3% at HK$4.75.(SUT) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com
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(Delayed by 1 hour)
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