Made in China:CN Banks,consumer debt boom;Results,BABAPing AnLodging+VIPS-Geely

THEME OF THE DAY

Strong Life results with Life EV +23.9% hoh and VNB +46.2% yoy。

    China banks – China’s consumer debt boom (Stephen Andrews)

    Ping An reported 1H17results today. Group EV came in at
Rmb739,144mn(+15.9% hoh), Life EV at Rmb446,600mn (+23.9% hoh), VNB at
Rmb38,551mn(underlying growth of 46.2%, vs. our 2017E forecast of
35.8%). Net profit grew6.5% yoy to Rmb43,427mn, accounting for ~70% of
DBe and 63% of BBGconsensus full-year forecasts. An interim dividend of
Rmb0.5/share (+150%yoy). Reiterate Buy and Top Pick. Key highlights are
as follow:

    Over the past 2 years mortgage growth in China has surged supporting
a buoyant housing market & helping partially clear the significant
property oversupply issue many 2nd and 3rd tier cities faced. In the
past 3-4 months another phenomenon has started to emerge which is
equally interesting: Short-term consumer debt in China has started to
surge. During Q2 17 household debt with a duration of less than one year
accelerated & is now growing +34-35% yoy (faster than mortgage growth)
and currently makes up close to 9-10% of all net new credit provision
within China (a level we have not seen before). (Stephen Andrews – 852
2203 6191)

金沙第一娱乐娱城官网,    Life EV growth of 23.9% hoh (underlying +21.8% hoh), helped
byoperating variance of Rmb12,380mn (3.4ppt), inv variance&mkt value
adj.of Rmb13,856mn (3.8ppt), and risk diversification effect of
Rmb9,993mn(2.8ppt). Group EV grew 15.9% hoh to Rmb739,144mn, with
non-lifeprofits of Rmb19,851mn (3.1ppt).。

    Alibaba – Jun Q margin: “when they go low, we go high” (BABA.N, Buy,
Target Price: USD 208.00, Closing Price: USD 159.50, Alan Hellawell)

    VNB grew 46.2% yoy to Rmb38,551mn, implying 2Q17growth of 32.2%yoy
(vs. +60% in 1Q17), driven by agency of Rmb35,084mn (+44.0%),
Tele,internet & others of Rmb2,906mn (+59.2%) and bancassurance
ofRmb440mn (+580.6%). Agency number grew 19.3% hoh or 26.7% yoy to1.3mn.
13M/25M persistency improved 0.6ppt/2.0ppt to 93.7%/90.1%.。

    Alibaba delivered a strong quarter with revenue of RMB50.2b (+56%
YoY), 2%/5% ahead of DBe/street. Core-commerce rev of RMB43b topped DBe
by 4% on improving content and personalization. Tmall physical goods GMV
grew 49% YoY (vs the industry at 31% per NBS). Non-GAAP EBITDA margin of
50.1% was 5.3ppts/5.7ppts higher than DBe/street. Core-commerce adj
EBITA margin grew further to 63%; this amidst amids the aggressive
subsidies of June promotions. BABA reiterated its full year revenue
guidance of 45-49% YoY, previewing higher investment in 2H. In raising
FY18 rev growth to 49% to capture strong momentum, we reiterate Buy.
(Alan Hellawell – 852 2203 6240)

    Net profits +6.5% yoy to Rmb43,427mn (+38.8% ex-one off gain in
1H16),driven by strong Life&Health at Rmb23,576mn (+36.7% yoy),
trustearnings at Rmb2,260mn (+152.0%), and other asset mgmt atRmb3,557mn
(+92.0% yoy). P&C was muted at Rmb6,861mn (+0.4%, C/+0.8ppt to 96.1%),
bank at Rmb7,281mn (+2.1%) and securities atRmb1,142mn (-3.1% yoy).
Internet fin made Rmb420mn profit (vs. a lossof Rmb1,592mn excluding one
off gain), helped by contribution from Puhui.。

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