We derive our target price of HK$7.5 by using a sum-of-the-parts (SOTP) approach: (1) a three-stage growth model to project NBV for life; (2) a three-stage growth model to project NBV for health; (3) c.1.3x Price/Book to value P&C insurance, consistent with the multiple for PICC P&C; (3) 0.5x book value for other operations; (4) 15% holding-company discount. Our target price is HK$7.5, implying a 0.72x 2026E P/EV.

Key downside risks that could prevent the stock from reaching our target price include prolonged P&C down-cycle, A-share market slump, strengthened regulation on life industry and macro environment deterioration.