Morning Trend | NCI rebounds with increased volume at low levels, has the valuation repair window truly opened?
NCI (1336.HK) has recently rebounded with increased volume from a phase of low levels, and the daily MACD has completed a golden cross, indicating an initial formation of a short-term bullish pattern. The price has stabilized above the 5-day and 10-day moving averages, forming a short-term moving average support zone, while the K-line structure has gently moved upward, showing an enhancement in the bullish capital control intention. Behind this round of rebound, it is resonating with multiple factors, including favorable policies for the insurance industry, regulatory encouragement for a higher proportion of insurance funds entering the market, and the overall oversold bottom of the sector. NCI's valuation has long been at a historical low, with its current price-to-book ratio and price-to-earnings ratio significantly lower than those of leading peers in the insurance industry. In terms of performance, as the decline in new business value narrows in 2023, the annual net profit is expected to achieve positive growth, with a gradually clearer trend of fundamental repair. From the market perspective, short-term funds are actively speculating around the valuation repair logic of the sector, with some institutional funds gradually increasing their positions, indicating market expectations for a "Davis Double Play" scenario. However, it is also necessary to pay attention to the fact that the insurance industry as a whole is significantly affected by residents' risk preferences and capital market fluctuations. As long as the external macro sentiment remains cautious, the sector's substantial upward space still requires volume support. Technically, the 5-day and 10-day moving averages have formed low-level support. If the trading volume remains high and stable, the short-term bulls are expected to further challenge the pressure in the range of HKD 16.4-17. If the volume weakens or short-term funds take profits and exit, a price pullback to the HKD 15.5-16 range for consolidation cannot be ruled out. In terms of operations, it is recommended that investors pay attention to fundamental catalytic news of the industry or individual stocks and changes in sector fund flows
NCI (1336.HK) has recently rebounded with increased volume from a phase of low levels, and the daily MACD has completed a golden cross, indicating an initial formation of a short-term bullish pattern. The price has stabilized above the 5-day and 10-day moving averages, forming a short-term moving average support zone, while the K-line structure has gently moved upward, showing an attempt by bullish funds to strengthen control.
Behind this round of rebound, it is resonating with multiple factors, including favorable policies for the insurance industry, regulatory authorities promoting a relaxation of the proportion of insurance funds entering the market, and the overall sector being significantly oversold at the bottom. NCI's valuation has long been at a historical low position, with its current price-to-book ratio and price-to-earnings ratio significantly lower than those of leading peers in the insurance industry. In terms of performance, as the decline in new business value narrows in 2023, the annual net profit is expected to achieve positive growth, and the trend of fundamental recovery is becoming clearer.
From the market perspective, short-term funds are actively speculating around the logic of sector valuation recovery, with some institutional funds gradually increasing their positions, indicating market expectations for a "Davis Double Play" scenario. However, it is also necessary to pay attention to the fact that the insurance industry as a whole is greatly affected by residents' risk appetite and capital market volatility. As long as the external macro sentiment remains cautious, the sector's significant upward space still requires volume support.
On the technical side, the 5-day and 10-day moving averages have formed low-level support. If trading volume remains high and stable, short-term bulls are expected to further challenge the resistance in the range of HKD 16.4-17. If the volume weakens or short-term funds take profits and exit, a price pullback to the HKD 15.5-16 range for consolidation cannot be ruled out.
In terms of operations, it is recommended that investors pay attention to fundamental catalytic news for the industry or individual stocks and changes in sector fund flows. In the short term, holding stocks based on moving averages is advisable to pursue the continuation of the right-side trend, but excessive position increases or blind chasing of price rises should be avoided, and profit-taking and stop-loss settings should be adjusted flexibly based on intraday fluctuations. In the medium to long term, it is still necessary to dynamically track whether the valuation recovery is sustainable. If there is industry differentiation or unexpected risk events, timely avoidance of downside risks is required.
Overall, after the short-term low-level rebound with increased volume, the upward momentum supported by the valuation recovery logic of NCI has been enhanced. However, the high beta financial attributes determine that its market fluctuations are highly sensitive, and risk control and rhythm management should not be overlooked
