Incidents: 1. Tianmao Group (000627.CH/RMB 8.07, buy) In the first quarter of 2016, net profit attributable to shareholders of listed companies is estimated to be 750 million to 800 million yuan, a significant improvement over the loss of 20.41 million yuan in the same period last year; since March 16, 2016, China Life Insurance has contributed about 306 million yuan (51% shareholding), and the fair value difference of 7.14% of the original Guohua Life Insurance 7.14% shares has increased by about 500 million yuan. 2. In the first quarter of 2016, Guohua Life achieved cumulative original insurance premium income of RMB 18.47 billion, additional payments for insurers' savings and investment funds of RMB 11.85 billion, and additional payments of RMB 770 million for independent investment and insurance accounts. 3. In order to further rationalize the company's business structure, it is proposed to establish a wholly-owned subsidiary “Tianmao Chemical” with a registered capital of 100 million yuan to undertake all current chemical and related businesses. Comment: 1. In 2015, the company raised a net capital of 9.793 billion yuan through non-public offerings, acquired 43.86% of Guohua Life's shares and increased the capital of Guohua Life; on March 17, 2016, the Insurance Regulatory Commission approved the company to hold 51% of Guohua Life's shares, and Guohua Life Insurance became a holding subsidiary of the company; on April 1, 2016, the Insurance Regulatory Commission approved Guohua Life Insurance's registered capital increase to 3.8 billion yuan. Guohua Life Insurance has become the main body of the company. With its characteristics, excellent investment ability, and continuous development and innovation in insurance sales channels (such as the Internet and bank terminals), premiums will increase steadily within reasonable planning, providing a source and support for the continuous increase in investment and net assets; after achieving a scale effect, Guohua will also focus on increasing value premiums in long-term planning; Guohua is a private enterprise that is still expanding in scale, and is more flexible. 2. Guohua Life Insurance's original premium income in the first quarter increased by 188.66% year on year, and new insurer savings and investment payments increased 146.49% year on year, and the scale has reached the top 15 positions in the life insurance market. On the one hand, due to the strong growth in the first quarter and the sharp year-on-year increase in the overall scale of premiums in the life insurance industry in the first quarter, Guohua maintained a growth rate higher than the industry level; on the other hand, Guohua's growth rate is expected to gradually slow down in subsequent months (2015) (Premiums were also distributed between low and medium term life insurance products); in addition, the Insurance Regulatory Commission issued the “Notice on Regulating Matters Relating to Short and Medium Term Life Insurance Products”, which put forward restrictions on business and capital. Guohua combined its own subjective scale control and objective system regulations, the original premiums for the first 3 months increased by 16.33% compared to the previous 2 months, and the growth rate slowed significantly; however, with shareholder capital investment of about 5.1 billion yuan in the previous period, the “benchmark amount” is still relatively sufficient, and can be adjusted according to timely changes in the size of the capital market; At the same time, not affected Investment-linked insurance premiums limited by “short to medium life” product regulations increased by 186.67% compared to February, and there was a significant change in business trends. 3. Establishing a wholly-owned subsidiary to operate the original chemical business will help the company improve its governance structure, make the business division more clear, and facilitate the independent and good development of all sectors of business. Bank of China Securities's opinion: With the expectation of the company's additional issuance plan in March 2016, Guohua Life Insurance's shareholders' capital investment will reach 16.4 billion yuan in the future, which can fully cope with the capital requirements of “payment for the second generation” and meet the company's rapid development; Guohua Life's professional investment ability has also become an important guarantee for the company's continuous development and value enhancement. After the non-public offering is completed, the company will hold 50% of Ansheng Tianping's shares, and will operate independently and develop collaboratively with Guohua Life in the future. We maintain our buying rating on this stock, with a target price of $9.84. Earnings per share for 2016, 2017, and 2018 were $0.27, 0.33, and $0.41, respectively.