文档介绍：Asia Pacific China
Insurance
8 October 2004
Sector Strategy
Global Equity Research China Insurance
Top picks
China Life Insurance Hold
Ping An Sell
Where’s the value in new Hold
Key changes
business? NA
Mark Kellock
(852) 2203 panies featured
@ China Life Insurance (), HK$ Hold
2003A 2004F 2005F
New business growth gap P/E (x)
EV/EBITDA (x) NA NA NA
Our analysis of potential NB profit for FY04 is supportive of our 25% Price/book (x)
growth assumption for China Life and HK$ price target. However, Ping An (), HK$ Sell
2003A 2004F 2005F
following a weak 1H04 result, Ping An is at risk of falling short of our 10% P/E (x) NA
growth assumption. This represents downside risk to our current share EV/EBITDA (x) NA NA NA
Price/book (x) NA
price target of HK$ and reinforces our Sell rating. (), HK$ Hold
2003A 2004F 2005F
Bottom-up analysis of NB profit P/E (x)
Industry Update EV/EBITDA (x) NA NA NA
In this report we focus on NB profit – a critical driver of value for life Price/book (x)
insurance stocks. We have made estimates for NB sales and margins to
derive potential NB profit growth. Our analysis is built on a FY04 forecast Industry life premiums
Life monthly premiums (Rmb m) (LHS)
industry gross premium of % growth. Via market share, renewal Growth YOY (RHS)
40,000 70%
premium and mix of business prospects we provide an outlook for NB. 35,000 60%
30,000 50%
Risk to share price targets 25,000 40%
Our current share price targets factor in FY04F NB profit growth of 25% 20,000 30%
for China Life and 10% for Ping An. Our analysis suggests our assumption 15,000 20%
10,000 10%
for China Life is fairly struck. However, our analysis of flat NB growth for 5,000 0%
Ping An suggests 6% downside to our current share price target. 0 -10%
Jul-03
Va