reports
- Iris Tan
Downgrading Ping An's Moat Trend to Stable as We Expect Slower Growth ...
We downgrade Ping An Insurance’s moat trend to stable from positive after reviewing recent trends in its distribution and customer development. The adjustment merely reflects our belief that we no longer expect customer switching costs, as a potential moat source, to continue increasing at a rapid pace, as they did in the past, given that cross-sales within the group have reached the highest level in the industry. We retain our HKD 100 fair value estimate, as we are making no changes to our ma...
- Iris Tan
Ping An's 1Q Hit by Tighter Regulatory Rules and Implementation of IFR...
With 11.5% year-on-year net profit growth, no-moat Ping An Insurance’s first-quarter results were hit by two negatives: lower investment income and a decline in new business value. These were largely attributable to external impacts, including its first implementation of IFRS 9. The latter was also affected by the regulator’s rule to prohibit providing cash survival benefits within the first five years and the use of universal or unit-linked products as a supplement. Without the impact of I...
- Iris Tan
Ping An has seen steady growth in the life insurance and P&C insurance...
China has maintained its economic rebalancing to consumption through the first quarter. But this process remains slow, as the Chinese consumer is becoming challenged with higher levels of household debt, and the picture for consumption growth is looking increasingly muddied. Despite a solid first-quarter bump, fixed-asset investment remains far below former levels. Going forward, weaker real estate and state-led infrastructure spending will likely quell any further rebound. Meanwhile, a rise in ...
- Iris Tan
The Timing of a Trade War Couldn't Be Worse for China
China has maintained its economic rebalancing to consumption through the first quarter. But this process remains slow, as the Chinese consumer is becoming challenged with higher levels of household debt, and the picture for consumption growth is looking increasingly muddied. Despite a solid first-quarter bump, fixed-asset investment remains far below former levels. Going forward, weaker real estate and state-led infrastructure spending will likely quell any further rebound. Meanwhile, a rise in ...
- Iris Tan
China's Debt: The Consequences of Bingeing on Debt
The rapid expansion in China's debt/GDP ratio has raised concerns among many observers, including us, because it is reminiscent of prior credit booms that have ended badly. Having watched Beijing repeatedly stimulate its way to higher growth, investors ask why this can't continue. Bluntly, if credit continues to outpace GDP growth significantly, we expect one of two scenarios to eventually occur. The first scenario is a full-blown credit crisis. Here, we'd see credit availability sharply contra...
- Iris Tan
Increasing Ping An’s FVE to Reflect Modest Contributions From Tech I...
Ping An Insurance’s 2017 results reflected strong fundamentals across financial and tech businesses, with embedded value and new business value surging 29.4% and 32.6% from 2016, respectively. The results confirmed our thesis that Ping An is on a fast growth track, as its financial and tech businesses are both seeing rising synergies. We raise our fair value estimate to CNY 85 from CNY 79 for the A shares and to HKD 105 from HKD 93 for the H shares to recognize the time value of money and incr...
- Iris Tan
Ping An has seen steady growth in the life insurance and P&C insurance...
Year-on-year growth in first-year premium sold in January was negative for listed Chinese insurers, given the implementation of document 134 which prohibited providing cash survival benefits within the first five years and the use of universal or unit-linked products as a supplement to an underlying insurance policy. Given such an impact, we saw increasing divergence among major insurers depending on their product offerings. Driven by strong growth in renewable premiums, January premium growth f...
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