Zhi Tong Cai Jing·2025-12-09 02:44Core Viewpoint - Morgan Stanley has become more optimistic about China Ping An (601318)(02318), believing it can capitalize on three core opportunities: wealth management, healthcare, and elderly services [1] Summary by Categories Investment Outlook - Morgan Stanley expects investor concerns to gradually dissipate, paving the way for a valuation reassessment [1] - The firm reiterates an "Overweight" rating and raises the target price by 27%, from HKD 70 to HKD 89 [1] Valuation Insights - Despite maintaining the core valuation methodology, Morgan Stanley believes that the operating after-tax profit is more stable and predictable than the after-tax net profit [1] - The analysis of dividends provides new insights, and the light-asset income from healthcare and elderly services is expected to further drive revenue and profit growth [1] Financial Projections - The group is projected to achieve a return on equity (ROE) of 14-15% in the short to medium term, with a capital cost of less than 10% [1] - The firm's price-to-earnings (P/E) ratio is expected to rebound from the current level of approximately 7 times to a double-digit level [1] - Looking ahead, Morgan Stanley forecasts that the operating net asset return will reach 14-15% by 2028, with the life insurance contract service margin (CSM) balance expected to recover to 1.9% growth by 2026 [1] - The new business value (VNB) compound annual growth rate is projected to rebound to 21% over the next two years, while the group's operating profit compound annual growth rate is also expected to improve to 11% in the same period [1]