Following the release of China Re's first-half results, Citi has updated its models, raising the 2026 net profit projection by 12% to RMB 11.293 billion, reflecting a downward revision in insurance service expense forecasts.

Concurrently, the broker has trimmed its 2027 and 2028 net profit estimates by 1% each, citing weaker anticipated growth in insurance revenue. Consequently, the target price for CHINA RE has been marginally lowered from HK$1.55 to HK$1.50, with the "Neutral/High Risk" rating maintained.

Citi notes that as the company will cease disclosing embedded value data from the first half of 2026, it has shifted its valuation methodology for the life and health reinsurance business to a consolidated equity-based market price approach. Furthermore, the price-to-book multiple for the primary property and casualty insurance division has been reduced from 0.5x to 0.3x, reflecting a trend of lower return on equity.

The broker forecasts net profits of RMB 11.293 billion, RMB 10.544 billion, and RMB 11.523 billion for CHINA RE for the years 2026, 2027, and 2028, respectively.