Huan Qiu Wang·2025-12-05 06:20Core Viewpoint - The insurance sector in the A-share market is experiencing a strong rally, primarily driven by the significant upgrade of China Ping An's target price by Morgan Stanley, which has led to a re-evaluation of the sector's value [1][4]. Group 1: Company Analysis - Morgan Stanley has raised the target price for China Ping An's A-shares from 70 CNY to 85 CNY and for H-shares from 70 HKD to 89 HKD, maintaining its "preferred" rating [1]. - The report highlights four unique advantages of China Ping An: a comprehensive financial model covering the entire customer lifecycle, a customer-centric approach, rapid development of light-asset medical and elderly care services, and the "AI in All" strategy enhancing operational efficiency [2]. - Morgan Stanley predicts that China Ping An's return on equity (ROE) will recover to a healthy level of 14%-15% by 2028, with an average growth rate of over 15% for new business value (NBV) over the next three years [2]. Group 2: Industry Outlook - CITIC Securities has expressed a very positive view on the insurance sector, indicating that the industry is emerging from a phase of "balance sheet recession" and entering a period of healthy expansion [4]. - The net assets of the insurance industry are projected to grow from 2.7 trillion CNY at the beginning of 2024 to 3.7 trillion CNY by September 2025, indicating a healthy expansion of balance sheets [4]. - The insurance sector is expected to strengthen its upward trend by 2026, with dividend insurance becoming more popular and significant growth potential remaining in the bancassurance channel [4]. - The insurance industry faces an annual incremental investment asset and maturity reallocation asset scale of 5 trillion to 6 trillion CNY, providing solid support for the capital market and investment returns for insurance companies [4]. - The recent report from Morgan Stanley is seen as a pivotal moment for the insurance sector, shifting the market's focus from historical burdens to discovering incremental value, which may lead to a fundamental-driven valuation re-evaluation [5].