This report is read as follows:
The CIRC's launch of the market-oriented reform of motor insurance rates and the establishment of CITIC auto insurance data platform will jointly promote the development of China's automobile extended insurance market and online insurance, and Jingtianli, which is transforming into Internet insurance, will fully benefit.
Main points of investment:
Maintain the "overweight" rating, with a target price of 116 yuan. We believe that the market-oriented reform of car insurance rates will stimulate the vitality of insurance companies to participate in the extended insurance market, and the establishment of PICC provides data conditions for online insurance business. 2015 is expected to be the first year of explosive growth of China's automobile extended insurance market, and Jingtianli, which is transforming into Internet insurance, will fully benefit. From 2014 to 2016, the EPS was 0.51, 0.65 and 0.83 yuan respectively. Give Jingtian Likebi an average PEG (FY1) = 8 times valuation, with a target price of 116 yuan (up 36%) and maintain the "overweight" rating.
Event: the CIRC announced the launch of the market-oriented reform of commercial car insurance rates. According to people's Daily online, the CIRC issued the opinions on the Reform of the Management system of Commercial Automobile Insurance clauses and premium rates on February 3 to promote the market-oriented reform of commercial motor insurance premium rates. We believe that the reform will stimulate the innovation vitality of auto insurance products in the insurance industry and further enlarge the market cake of auto insurance. At present, the domestic automobile extended guarantee penetration rate is less than 1%, and the market size is no more than 1 billion yuan, while the United States has reached 35%, and the market capacity exceeds 11 billion US dollars.
China's automobile market grew explosively from 2009 to 2010, and became the largest market in the world. From 2014 to 2015, with the end of the manufacturer's warranty period, the demand for extended vehicle insurance increased. We predict that with the increase in the participation enthusiasm of insurance companies and the improvement of consumers' awareness of extended insurance, 2015 is expected to become the first year of explosive growth in China's automobile extended insurance market, and the penetration rate of China's automobile extended insurance is expected to reach 20% in 2020. The market capacity reached 54 billion yuan.
The centralization of insurance data creates conditions for Internet insurance. According to people's Daily online, the insurance version of UnionPay has been established in 2014. Its main business is to collect insurance management data and establish a standardized data system. The first step is to collect auto insurance data from various insurance companies and establish a car insurance information platform. We believe that the establishment of PICC marks the insurance industry has entered the era of big data, creating excellent conditions for the online insurance business.
Catalyst: formally introduce automobile extended insurance products to the market; the pace of upstream and downstream mergers and acquisitions is accelerated.
Risk hint: the promotion of automobile extended insurance products has been blocked; the delivery volume of short MMS service has declined.