Bank of America Securities Raises Profit Forecasts for ZA ONLINE, Increases Target Price to HK$16.1

Stock News
03/20

Bank of America Securities has issued a research report raising its profit forecasts for ZA ONLINE (06060) for the current and next fiscal years by 5% each. The target price has been increased from HK$15.3 to HK$16.1, which corresponds to a forecast price-to-book ratio of 0.9 times. The "Buy" rating has been reaffirmed. The report indicates that, driven by a decline in the comprehensive cost ratio and other expenses, coupled with contributions from its Hong Kong operations, the company's profit is expected to grow to 1.5 billion yuan over the next three years, compared to 1.1 billion yuan last year. The report also notes that the company's net profit last year increased by 83% from a low base in 2024. Core business growth remained stable, with premium income rising by 7% year-on-year. Last year, the comprehensive cost ratio improved by 1.1 percentage points to 95.8%, primarily benefiting from a 2.7 percentage point decrease in the loss ratio for the lifestyle consumption business to 65.3%. Boosted by improvements in the mainland bond and stock markets, total investment income grew by 59% year-on-year, and the total investment return rate increased by 1.9 percentage points to 5.3%. A major negative factor was a provision of 700 million yuan made for the investment in ZA International. Management considers this provision to be a one-time event.

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