20161129-招商证券_香港_-Industry_Report_23页_1mb_1mb

报告摘要

Insurance Industry Report - 2017 Sector Outlook

Core Content and Main Views

This report provides a 2017 outlook for the Chinese insurance sector, focusing on the potential for a "Spring blossom" rally in the first quarter, with a pecking order of Ping An, NCI, and PICC as the most attractive stocks. The report highlights the following key points:

Spring Rally Potential: A rally in the first quarter of 2017 is anticipated due to improved NBV growth, better market liquidity, and positive policy environment from the Two Sessions in March. The report also suggests that the best buying time may be around the Spring Festival after the correction.
Autumn Harvest Uncertainty: A re-rating of insurance stocks in the second half of 2017 (Autumn) is possible if the Chinese economy shows signs of improvement, such as progress in capacity reduction, better PPI, and improved corporate earnings. However, the report notes that these events are uncertain.
Fundamental Strength: The report recommends investing in companies with strong fundamentals and high earnings visibility. Ping An, NCI, and PICC are highlighted for their solid performance and potential for re-rating.
P&C Insurance Outperformance: The property and casualty (P&C) insurance sector is expected to strengthen in 2017, with Ping An and PICC leading due to strong underwriting profitability and better investment returns.
Life Insurance Outlook: Life insurance profits are expected to rebound, but NBV growth will decline. Ping An and NCI are noted for their improved fundamentals and potential to outperform.
Investment Yield Trends: While net investment yield is expected to continue its downtrend, total investment yield may rebound in 2017 due to a more stable economic environment and reduced RMB devaluation risks.

Key Information

Sector Performance

2017E: Life insurers' net profit growth is expected to be around 27%, with Ping An and NCI likely to outperform.
2017E: P&C insurers are expected to have better premium growth and ROEs, with Ping An P&C and PICC P&C leading.
2017E: The report forecasts a 10% growth in net assets for life insurers.

Investment Thesis

Ping An: Expected to see a rebound in NBV growth, with potential for re-rating due to the HK listing of Lufax. Its 2017E P/EV is at 0.86x, which is below its historical average.
NCI: Continues with structural transformation, with improved premium structure and NBV growth. Its 2017E P/EV is at 0.69x.
PICC: Maintains strong profitability and attractive valuation. Its 2017E P/B is at 1.23x, and ROE is expected to be 16.2%.
AIA: Downgraded due to concerns over UnionPay restrictions, with its 2017E NBV growth lowered to 15%.

Financial Highlights (Selected)

Company	Ticker	TP (HK$)	Change	2016E P/EV	2017E P/EV	2016E P/B	2017E P/B	ROE (%)
Ping An	2318 HK	53.39	+5.7%	0.98	0.86	-	1.23	16.69
NCI	1336 HK	45.22	+13.5%	0.80	0.69	-	1.23	16.69
PICC	2328 HK	15.81	-1.1%	0.83	0.81	1.23	1.23	16.2%
AIA	1299 HK	55.45	-8.7%	1.76	1.62	-	-	9.63

Key Factors Influencing the Sector

US Rate Hike: Expected in December, which may cause a retreat in HK stocks. Investors are advised to wait for the correction to finish before entering the market.
RMB Depreciation: May lead to increased inflow of mainland institutional funds into HK stocks, improving market liquidity.
Economic Recovery: Positive economic indicators, such as improving PPI and corporate earnings, could lead to a re-rating in the second half of the year.
Policy Environment: The Two Sessions in March could bring positive policies that benefit the insurance sector.

Pecking Order

Ping An – Strong fundamentals, potential for re-rating due to Lufax's HK listing, and better NBV growth.
NCI – Structural transformation, improved premium structure, and expected NBV growth.
PICC – High profitability, low valuation, and strong long-term earnings quality.

Conclusion

The report suggests that the Chinese insurance sector may experience a rebound in the first quarter of 2017, with Ping An, NCI, and PICC being the top choices. The potential for a "Spring blossom" rally is supported by improved market liquidity and positive economic signals. However, the "Autumn harvest" remains uncertain and depends on the progress of economic reforms and policy changes. Investors are advised to focus on companies with strong fundamentals and to be patient in the short term.

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