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Morgan lifts CPIC (02601) to HK$62
Morgan Stanley lifted its target price for China
Pacific Insurance (CPIC)(02601) to HK$62 from HK$61, and maintained its "overweight" 
rating.
  The research house said the industry is making gradual changes to adapt a new operating
environment in 2018, demand for insurance remains intact and healthy. Valuation should 
continue to re-rate for solid names and Morgan maintained its "attractive" industry view.
  It said CPIC delivered a strong share performance in 2017, up 39% and outperforming
HSCEI by 14ppt, on the back of rising yield, recovering P&C business and industry-leading
life growth. However its valuation still appears low at 0.8x 2018 EV.
  Morgan expects its valuation gap versus Ping An (02318) to narrow in 2018, as the market
recognizes its gradual operational improvement in both life & P&C units, a sustainable 
above-peers payout ratio, solid balance sheet and stable strategy and management team. It
is also catching up on technology investment to modernize its operations.

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