China's PICC: Merrill Lynch's target price of HK $3.54

Merrill Lynch downgraded China's <02328.HK> target price from HK $3.65 to HK $3.54, reflecting a "run away from the market" for the recovery, and said the recovery was not up to expectations this year, and that the current prices have reflected expectations too high. The report states that the results of the third party compulsory liability insurance for automobiles were announced this week and that investors should not take a positive turn, although all risk providers had the opportunity to benefit. Merrill believes the share price has been fully reflected, as well as the first half of this year, the gradual deterioration of the strong insurance, coupled with business scope is a non-profit, the next year profitability will fall, and the corresponding to the 2009-11 surplus to be adjusted lower 10%-17%.