As the sponsor shareholders of Guohua Life Insurance and Ansheng Balance (Tianping Auto Insurance), the company and Xinliyi Group have always been optimistic about the development of the insurance industry, and have seized the opportunity of the new “Ten Rules of China” of insurance. They have adopted or are planning to acquire some of Guohua Life's shares through a private offering or plan to acquire some of Guohua Life's shares, and plans to carry out two large-scale capital increases in Guohua Life. On March 17, 2016, with the approval of the Insurance Regulatory Commission, the company already held 51% of Guohua Life's shares, and Guohua Life Insurance became a holding subsidiary of the company; with future capital increases of the company and related shareholders in equal proportions, Guohua Life's shareholders' investment capital will reach 16.4 billion yuan, which can fully cope with the capital requirements of “repayment 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 AXA's shares, and will operate independently and develop collaboratively with Guohua Life Insurance in the future. We made our first rating purchase of this stock, with a target price of 9.84 yuan. Key points supporting ratings Guohua Life Insurance has a higher level of investment than the industry, has seized capital market opportunities, exploited the advantages of low cost and medium- to long-term investment, obtained a rapid increase in asset value, and supported the rapid development of the insurance business; in the company's subsequent plans, there will also be a transition from scale to value, and development can be expected after the scale is increased and stabilized. AXA has an international background and has its own advantages and characteristics in pricing technology, product systems, and shareholder resources; in the future, it will more deeply integrate the Internet, big data and other means to achieve the company's refined development, enhance customer experience, and expand market share. The company's shareholders are strong, can coordinate and are rich in resources, and there is a lot of room for collaborative development in the future. The main risks faced by ratings are systemic macroeconomic and financial industry risks, resulting in investment returns falling short of expectations. Interest rate marketization competition risk and regulatory policy risk. There is a risk that the non-public offering will not be successful, and the risk that the acquisition or capital increase supervision will not be approved. The valuation division used net market ratio valuations for Guohua Life Insurance and AXA Tianping to give the company a buying rating, with a target price of 9.84 yuan. Referring to Guohua's net assets of about 10.4 billion yuan at the end of 2015, the $13.6 billion that will be injected through additional issuance in the future, and the net asset appreciation brought about by investment, etc., based on the 51% ratio held by the company, a market value of about 43 billion yuan was given to Guohua Life Insurance; combined with AXA's 50% market value of about 7 billion yuan and the company's original business value level of about 6 billion yuan (referring to the company's recent net asset average and related chemical industry valuations), the company was given a target market value of 56 billion yuan, corresponding to 5.658 billion yuan of shares after issuance. It is recommended to focus on flexible investment opportunities in conjunction with valuation.