Zhongtai Securities Co.,Ltd. has issued a research report, slightly raising its net profit forecasts for PICC P&C (HKEX: 02328) for the years 2026 to 2028 to RMB 41.66 billion, RMB 44.204 billion, and RMB 46.691 billion, respectively.

These revised figures, up from previous estimates of RMB 41.312 billion, RMB 43.891 billion, and RMB 46.336 billion, reflect updated assumptions regarding the company's underwriting profits and investment performance.

The projected year-on-year growth rates for these profits are 3.2%, 6.1%, and 5.6%, corresponding to return on equity (ROE) figures of 13.7%, 13.3%, and 13.0%.

The firm employed a PB-ROE valuation framework for its assessment, utilizing the adjusted Gordon Growth Model where PB = (ROE - g) / (r - g).

In its analysis, the securities house assumed a long-term ROE of 12%, a sustainable long-term growth rate of 1.5%, and a cost of equity of 8.5%.

Based on this model, the firm assigns a target price-to-book (PB) multiple of 1.5 times and reiterates its Buy rating on the stock.