Dim Sum Express

Ping An Insurance (2318HK, Buy): 1Q17NBV growth strong; maintain Buy.

    Life business performance was very strong with agency-channel regular FYP growth of 62% andNBV growth of 60%. In contrast, its P&C combined ratio picked up from 1Q16and 2016to 95.9% in1Q17despite solid premium growth. Ping An’s position on the internet finance front has strengthenedwith a sound user base for its various platforms. Based on its 1Q17performance, we maintain ourBuy rating for the company, and target price of HK$58.1, representing ~2.0x 2017E P/B.

    China Life (2628HK, Buy): Regular FYP up 17% YoY in 1Q17; maintain Buy.

    1Q17net profit came in at Rmb6.1bn, while comprehensive income totaled Rmb5.5bn, comparedwith a negative Rmb8bn in 1Q16. GWP grew by 22% YoY during the quarter. Regular FYP rose 17%YoY, and renewal premiums increased by 52% YoY. On the other hand, short-term premiums rosejust 8% YoY. The company’s premium growth was driven by regular premiums and renewalpremiums in 1Q17. Annualized total investment yield was 4.53% in 1Q17, an increase of 0.84ppYoY, thanks to better market conditions. We maintain our Buy rating and target price of HK$31.50.CRRC (1766HK, NR): 1Q17net profit down 42% on weak EMU segment; key takeaways frombriefing.

    1Q17net profit declined by 42%, mainly due to weak EMU segment revenue, which dropped 16.7%YoY, coming in below consensus. The company only delivered 39EMU sets during the quarter,compared to 118delivered in 1Q16. End-March order backlog was up 37% on 2016, with the rapidtransit segment accounting for the highest proportion. Rolling stock delivery will speed up from 2Q17,according to the management. Currently trading at 14.3x 2017E P/E, the shares are up 8% YTD,after a 27% decline in 2016.

    BAIC Motor (1958HK, Buy): Strong 1Q17results for Beijing Benz.

    Beijing Benz’s 1Q17sales volume rose 56.7% YoY, continuing its significant growth in China’s luxuryauto market, and benefiting from the slowdown at Audi. Its market share rose 0.7pp from end-2016to 2.7% in 1Q17. We expect the brand to become a bigger contributor to overall earnings. AlthoughBeijing Hyundai’s March sales have not yet been announced, CAAM data indicate sales dropped aconsiderable 44.3% YoY during the month, mostly due to Sino-Korean tensions, taking 1Q17salesdown 14.4% YoY. We expect to hear more from management about changes to its strategy forBeijing Hyundai at this morning’s analyst briefing.

    Beijing Tong Ren Tang CM (8138HK, Under review): Strong 1Q17driven by product sales.Tong Ren Tang CM reported 1Q17revenue/net profit up 18.7% and 22.5% YoY respectively. Thestrong growth was driven by 1) a sales recovery in Hong Kong, with an estimated 33% YoY growthvs 12% in 1Q16, and 2) faster growth in product sales than service income. Sales through third-partydistributors increased by about 30% YoY on a 50/50wholesale/retail revenue split. Product salesgrew 19% YoY vs 12% in FY16, faster than 14% service income growth, and mainly volume driven.Overseas sales are a caveat, declining 40.1% YoY vs 8.6% in FY16. Rating and TP under review.