Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Huge volumes continue to be traded on the mainland share markets. SOUTHBOUND volumes bounced, and net buying was both large and broad-based.</li>
<li>It was an odd week. Strangely, HK stocks sharply underperformed mainland indices but AH premia fell on average, more so for liquid names, but wider spreads narrowed, narrow spreads widened.</li>
<li>This week's confabs did NOT deliver stimulus plans, but with Donald Trump's election, I expect any major fiscal plans get pushed back to next spring to adapt on the fly.</li>
</ul>


Huge volumes continue to be traded on the mainland share markets. SOUTHBOUND volumes bounced, and net buying was both large and broad-based.
It was an odd week. Strangely, HK stocks sharply underperformed mainland indices but AH premia fell on average, more so for liquid names, but wider spreads narrowed, narrow spreads widened.
This week's confabs did NOT deliver stimulus plans, but with Donald Trump's election, I expect any major fiscal plans get pushed back to next spring to adapt on the fly.


A/H Premium Tracker (To 8 Nov 2024): AH Premia Lower Despite A-Share Outperformance

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

China Life Insurance Co H / Equity Bottom-Up

<ul><li>Positive on pure life insurer; raise TP to HK$20.0. We revise up the insurer’s FY24-26E EPS forecasts by 148%/38%/31% to RMB4.45/2.58/2.61 (table), to reflect the 3Q investment outperformance and improved fundamentals, and remain positive on the insurer’s profit realization in 4Q24.</li><li>3Q NPAT soared 17.7x YoY to RMB66.2bn, outgrowing most listed peers, mainly driven by net fair value gains (+80x YoY), as the insurer held the second highest exposure of FVTPL core equities (i.e. stocks and equity funds) among listed peers at 11.2% by 1H24.</li><li>As a pure life insurer, we expect China Life capable of riding on the wave of equity market rally, and result in better 2H24 investment prints on top of a low base in 2H23. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Positive on pure life insurer; raise TP to HK$20.0. We revise up the insurer’s FY24-26E EPS forecasts by 148%/38%/31% to RMB4.45/2.58/2.61 (table), to reflect the 3Q investment outperformance and improved fundamentals, and remain positive on the insurer’s profit realization in 4Q24.3Q NPAT soared 17.7x YoY to RMB66.2bn, outgrowing most listed peers, mainly driven by net fair value gains (+80x YoY), as the insurer held the second highest exposure of FVTPL core equities (i.e. stocks and equity funds) among listed peers at 11.2% by 1H24.As a pure life insurer, we expect China Life capable of riding on the wave of equity market rally, and result in better 2H24 investment prints on top of a low base in 2H23. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Life (2628 HK) - 3Q NPAT Boosted by Net Fair Value Gains

<ul><li>China Life reported strong 1H results with NBV +18.6% YoY on a like-for-like basis to RMB32.3bn, and EV back to double-digit growth by 11.4% to RMB 1.4tn from year start.</li><li>Investment income soared 1.4x YoY to RMB56.7bn after the insurer fully adopted IFRS 9 for both A/H share reporting, driving the pre-tax profit to rise 27.6% YoY to RMB 47.9bn in 1H24, equivalent to 109.3% YoY surge in 2Q24 (CMBI est).</li><li>We see outstanding margin expansion in bancasssurance, of which the NBV margin +13.4pct like-for-like to &gt;17% as we estimate. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Life reported strong 1H results with NBV +18.6% YoY on a like-for-like basis to RMB32.3bn, and EV back to double-digit growth by 11.4% to RMB 1.4tn from year start.Investment income soared 1.4x YoY to RMB56.7bn after the insurer fully adopted IFRS 9 for both A/H share reporting, driving the pre-tax profit to rise 27.6% YoY to RMB 47.9bn in 1H24, equivalent to 109.3% YoY surge in 2Q24 (CMBI est).We see outstanding margin expansion in bancasssurance, of which the NBV margin +13.4pct like-for-like to &gt;17% as we estimate. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Life (2628 HK) - Strong Lift in Banca NBV Margin

<ul><li>China Life announced 1Q24 results with the VNB YoY reaching the highest growth to 26.3% under new EV assumptions on a comparative basis, surpassing market consensus and our expectation of growth by low-to-mid teens.</li><li>We see the ascending pattern attributable to 1) increased proportion of mid-to-long term regular-paid business given the 10yr+ FYRP +25.4% YoY to RMB25.2bn, taking 33.7% of total FYRP, +5.57pct compared to 1Q23 (Fig.2); 2) cost reductions on bancassurance; and 3) proactive contraction on products’ pricing interest rates.</li><li>Despite a 4.4% YoY decline on first-year premiums, we estimate that the insurer’s VNB margin would sequentially improve over the 2Q-4Q24, thanks to an optimized structure of which the FYSP and total FYSP and short-term premiums were down by -74.9%/-18.6% YoY in 1Q24 (Fig.2). </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Life announced 1Q24 results with the VNB YoY reaching the highest growth to 26.3% under new EV assumptions on a comparative basis, surpassing market consensus and our expectation of growth by low-to-mid teens.We see the ascending pattern attributable to 1) increased proportion of mid-to-long term regular-paid business given the 10yr+ FYRP +25.4% YoY to RMB25.2bn, taking 33.7% of total FYRP, +5.57pct compared to 1Q23 (Fig.2); 2) cost reductions on bancassurance; and 3) proactive contraction on products’ pricing interest rates.Despite a 4.4% YoY decline on first-year premiums, we estimate that the insurer’s VNB margin would sequentially improve over the 2Q-4Q24, thanks to an optimized structure of which the FYSP and total FYSP and short-term premiums were down by -74.9%/-18.6% YoY in 1Q24 (Fig.2). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Life (2628 HK) - Highest VNB Growth in Years; Net Profit Decline Narrowed on Track

<ul>
<li>The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.</li>
<li>SOUTHBOUND's consecutive buying streak ended on Monday 25-March, then started again. 20 days straight net buying. NORTHBOUND saw big inflows Friday. A record day I believe.</li>
<li>HK stocks bounced VERY hard. Seemed like big allocation trade. HSCEI +8.7% vs CSI300 +1.2%. In H/A Pairs, liquid pairs saw Hs outperform their A by 4+% on average.</li>
</ul>


The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
SOUTHBOUND's consecutive buying streak ended on Monday 25-March, then started again. 20 days straight net buying. NORTHBOUND saw big inflows Friday. A record day I believe.
HK stocks bounced VERY hard. Seemed like big allocation trade. HSCEI +8.7% vs CSI300 +1.2%. In H/A Pairs, liquid pairs saw Hs outperform their A by 4+% on average.


A/H Premium Tracker (To 26 Apr 2024):  Best Week in a LONG Time for Hs Vs As - Time To Get Long H/A

China

China Life Insurance Company Ltd. offers a wide range of life, accident, and health insurance products and services.

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China Life Insurance Co H (2628 HK)

China Life (2628 HK) - 3Q NPAT Boosted by Net Fair Value Gains

Positive on pure life insurer; raise TP to HK$20.0. We revise up the insurer’s FY24-26E EPS forecasts by 148%/38%/31% to RMB4.45/2.58/2.61 (table)

CMB International

China Life (2628 HK) - Strong Lift in Banca NBV Margin

China Life reported strong 1H results with NBV +18.6% YoY on a like-for-like basis to RMB32.3bn, and EV back to double-digit growth by 11.4% to RMB...

CMB International

China Life (2628 HK) - Highest VNB Growth in Years; Net Profit Decline Narrowed on Track

China Life announced 1Q24 results with the VNB YoY reaching the highest growth to 26.3% under new EV assumptions on a comparative basis, surpassing...

CMB International

A/H Premium Tracker (To 26 Apr 2024): Best Week in a LONG Time for Hs Vs As - Time To Get Long H/A

AH Premia have finally turned a corner. Weeks of bouncing back and forth has led to lower premia, especially on average as wider spreads narrow...

Travis Lundy

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A/H Premium Tracker (To 8 Nov 2024): AH Premia Lower Despite A-Share Outperformance

SOUTHBOUND was a big buyer last week of H shares. AH Premia fell slightly. Wide spreads saw Hs outperform. Narrow spreads underperformed. I expect...

Travis Lundy

China Life (2628 HK) - 3Q NPAT Boosted by Net Fair Value Gains

Positive on pure life insurer; raise TP to HK$20.0. We revise up the insurer’s FY24-26E EPS forecasts by 148%/38%/31% to RMB4.45/2.58/2.61 (table)

CMB International

China Life (2628 HK) - Strong Lift in Banca NBV Margin

China Life reported strong 1H results with NBV +18.6% YoY on a like-for-like basis to RMB32.3bn, and EV back to double-digit growth by 11.4% to RMB...

CMB International

China Life (2628 HK) - Highest VNB Growth in Years; Net Profit Decline Narrowed on Track

China Life announced 1Q24 results with the VNB YoY reaching the highest growth to 26.3% under new EV assumptions on a comparative basis, surpassing...

CMB International

A/H Premium Tracker (To 26 Apr 2024): Best Week in a LONG Time for Hs Vs As - Time To Get Long H/A

AH Premia have finally turned a corner. Weeks of bouncing back and forth has led to lower premia, especially on average as wider spreads narrow...

Travis Lundy