Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

PICC Property & Casualty H / Equity Bottom-Up

*Weaker 2H20 Results: PICC P&amp;C (2328.HK) [PICC P&amp;C] reported 2H20 earnings of CNY 7.7 bn, which declined CNY 5.5 bn or 41.7% HOH.  PICC P&amp;C reported an underwriting loss during of CNY 1.2 bn in 2H20;*Credit Insurance Remains A Trouble Spot: Credit insurance line reported the largest deterioration in underwriting results, posting a CNY 2.2 bn underwriting loss. This is most likely attributed to policies sold in 2019, in our view. Credit insurance also reported an astronomical combined ratio of 157.2%; and*Auto Enjoying Having No One On The Road: It’s unfortunate but the auto combined ratio did worsen 350 bp HOH to 98.3% - although still better than the 101.6% reported by that of Ping An P&amp;C (2318.HK).Although the combined ratio worsened, underwriting profits can be attributed to the social distancing measures implemented during 1H20, which has significantly reduced vehicle use - especially commercial vehicles (which tends to have higher claims). We view this as temporary, given how quickly mainland China is turning the page with COVID-19.

*Weaker 2H20 Results: PICC P&amp;C (2328.HK) [PICC P&amp;C] reported 2H20 earnings of CNY 7.7 bn, which declined CNY 5.5 bn or 41.7% HOH.  PICC P&amp;C reported an underwriting loss during of CNY 1.2 bn in 2H20;*Credit Insurance Remains A Trouble Spot: Credit insurance line reported the largest deterioration in underwriting results, posting a CNY 2.2 bn underwriting loss. This is most likely attributed to policies sold in 2019, in our view. Credit insurance also reported an astronomical combined ratio of 157.2%; and*Auto Enjoying Having No One On The Road: It’s unfortunate but the auto combined ratio did worsen 350 bp HOH to 98.3% - although still better than the 101.6% reported by that of Ping An P&amp;C (2318.HK).Although the combined ratio worsened, underwriting profits can be attributed to the social distancing measures implemented during 1H20, which has significantly reduced vehicle use - especially commercial vehicles (which tends to have higher claims). We view this as temporary, given how quickly mainland China is turning the page with COVID-19.   

*BEA Life Deal: In an effort to reinforce its Greater China franchise, AIA Group (1299.HK) [AIA] has entered into an agreement to purchase Bank of East Asia’s (23.HK) [BEA] wholly-owned life insurance unit, BEA Life, and entered into an exclusive 15-year bancassurance relationship with BEA for HKD 5.07 bn (USD 653 mn) covering Hong Kong and mainland China; and *Lost Focus: Acquiring a fledgling Hong Kong insurance franchise at a premium when you’re the dominant player and unemployment remains excessive, suggests that AIA is more concerned with growth metrics rather than addressing the risks that AIA is facing in mainland China, Hong Kong, and in its investment portfolio.

*BEA Life Deal: In an effort to reinforce its Greater China franchise, AIA Group (1299.HK) [AIA] has entered into an agreement to purchase Bank of East Asia’s (23.HK) [BEA] wholly-owned life insurance unit, BEA Life, and entered into an exclusive 15-year bancassurance relationship with BEA for HKD 5.07 bn (USD 653 mn) covering Hong Kong and mainland China; and *Lost Focus: Acquiring a fledgling Hong Kong insurance franchise at a premium when you’re the dominant player and unemployment remains excessive, suggests that AIA is more concerned with growth metrics rather than addressing the risks that AIA is facing in mainland China, Hong Kong, and in its investment portfolio. 

AIA Group – Confirming No Organic Growth On Horizon

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

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This update is the latest in a series dating back to <a href="https://skr.ma/c7hcH" target="_blank" rel="noopener">Legend's Conversion of Domestic Shares</a> in June 2018.
To date, 20 companies have sought approval to convert their domestic shares into H shares, which would then be eligible to be listed and traded on Hong Kong's stock exchange.
13 companies have now been given CSRC and Hong Kong listing approval to convert such shares. Only two of those have seen any noticeable movement in the converted shares.
In the past four months, two companies have withdrawn their application to convert their domestic shares, citing further improvement in the rules and regulations of the domestic capital market, among other factors.  
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As always, more below the fold. 
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This update is the latest in a series dating back to Legend's Conversion of Domestic Shares in June 2018.
To date, 20 companies have sought approval to convert their domestic shares into H shares, which would then be eligible to be listed and traded on Hong Kong's stock exchange.
13 companies have now been given CSRC and Hong Kong listing approval to convert such shares. Only two of those have seen any noticeable movement in the converted shares.
In the past four months, two companies have withdrawn their application to convert their domestic shares, citing further improvement in the rules and regulations of the domestic capital market, among other factors.  


As always, more below the fold. 


Full Circulation Of H-Shares: January 2021 Update

*Partnership With ZhongAn: AIA Group (1299.HK) [AIA] and ZhongAn Online P&amp;C Insurance’ (6060.HK) [ZhongAn] majority owned ZA Tech Global (ZA Tech) subsidiary announced a regional strategic digital partnership. The partnership covers all of AIA’s markets excluding mainland China, and opens new regional sales opportunities for AIA;*Risks Remain: This new partnership, as potentially exciting as it is, in now way offsets the risks AIA is facing in mainland China, Hong Kong, and in its investment portfolio.

*Partnership With ZhongAn: AIA Group (1299.HK) [AIA] and ZhongAn Online P&amp;C Insurance’ (6060.HK) [ZhongAn] majority owned ZA Tech Global (ZA Tech) subsidiary announced a regional strategic digital partnership. The partnership covers all of AIA’s markets excluding mainland China, and opens new regional sales opportunities for AIA;*Risks Remain: This new partnership, as potentially exciting as it is, in now way offsets the risks AIA is facing in mainland China, Hong Kong, and in its investment portfolio.

AIA Group – New Initiative Does Not Offset Risks

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Capital Markets

JD Health International  / Equity Capital Markets

Healthcare’s presence in Asian capital markets has increased substantially over the last four years on the heels of substantial investments in private markets (VC/PE). Policy reforms and changes in listing rules, most notably in China, have led to an explosion of market cap creation for the sector as the universe of companies has expanded to include innovative companies, most notably pre-revenue biopharmaceutical companies. At the same time, substantial investments in digital healthcare, fueled by the COVID-19 pandemic, adds a new source of listed companies. This Insight focuses on leading unlisted healthcare companies in China, India, and ASEAN that have raised substantial amounts of capital and appear to be candidates for listing.

Healthcare’s presence in Asian capital markets has increased substantially over the last four years on the heels of substantial investments in private markets (VC/PE). Policy reforms and changes in listing rules, most notably in China, have led to an explosion of market cap creation for the sector as the universe of companies has expanded to include innovative companies, most notably pre-revenue biopharmaceutical companies. At the same time, substantial investments in digital healthcare, fueled by the COVID-19 pandemic, adds a new source of listed companies. This Insight focuses on leading unlisted healthcare companies in China, India, and ASEAN that have raised substantial amounts of capital and appear to be candidates for listing.   

China

ZhongAn Online P & C Insurance Co., Ltd. operates as an insurance company. The Company develops and sells health, airline, and automotive insurance, and other products. ZhongAn Online P & C Insurance also offers online consumer finance services.

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ZhongAn Online P&C Insurance C (6060 HK)

PICC P&C – Poor Overall Results

PICC P&C: PICC P&C reported a 2H20 earnings decline 41.7% HOH. Credit insurance remains a trouble spot while auto is enjoying a temporary COVID...

Thomas J. Monaco

AIA Group – Confirming No Organic Growth On Horizon

AIA GROUP: AIA entered into an agreement to acquire BEA Life, and entered into a bancassurance relationship with BEA. Acquiring a fledgling Hong...

Thomas J. Monaco

Full Circulation Of H-Shares: January 2021 Update

To date, 20 companies have sought approval to convert their domestic shares into H shares, 13 of which have now been given CSRC and Hong Kong...

David Blennerhassett

AIA Group – New Initiative Does Not Offset Risks

AIA GROUP: New Partnership With Zhong An Should Help New Customer Acquisition Regionally, But Risks Remain High In Hong Kong, Mainland China, and...

Thomas J. Monaco

Asian Healthcare - Coming of Age

This Smartkarma Originals Insight highlights 20 leading unlisted healthcare companies in Asia, mainly in digital healthcare and biopharma, that are...

Kemp Dolliver, CFA

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