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2009-6-12 11:38:00 a.m. HKT, XFNA
DJ MARKET TALK: PICC +0.7%; Premium Growth Trend Priced In -GS
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| 1128 [Dow Jones] PICC P&C (2328.HK) +0.7% at HK$6.15, roughly inline with HSI's 0.9% rise, supported by premium data showing January-May premium income +13.8% on-year; but gains likely capped at year-to-date high of HK$6.33 (hit June 5), vs intraday day high of HK$6.32, after stock's recent strong rally (+17.5% month-to-date, vs H-share Finance Index's +8.6% during same period). Goldman Sachs says premium growth generally inline with its expectation; attributes growth to decent rise in car sales, stable auto insurance premium rates, some market share gains from some mid-sized P&C insurers with low insolvency ratios. Keeps at Sell, target at HK$3.50 (1.4X FY09 P/B), views current valuation at 2.3X FY09 P/B (vs 13.4% ROE) already priced in premium growth trend and potential modest improvement in combined ratio in 2009.(SUT) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com
(Delayed by 1 hour)
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