Company info: it is the largest life insurance company in China with 42.5% market shares in 1st year premium (as of 1st 3Q07). The Company provides products and services including individual life insurance, group life insurance, A&H insurance, annuity product and asset management company.

Financial ratio: stock price rise 90%/yr since IPO from $3.56 to $45.5. In 2Q07, net premium and earning rise 17% & 160% compare to 2Q06. P/E ratio 60.71, PEG 0.375, esitmate 08 EV $9.5 => EV to MV 4.8 times, return to equity increased from 14.35% to 16.3%.

Sector info: insurance co generate profit by: 1) premium from policyholders net of claims; 2) investment income on reserve. Unlike banks have huge fixed cost to set up branches and risk on bad debt, the only major cost of insurance co are claims & commission which is easier to manage and estimate, therefore, insurance co's performance in a way should be more stable than bank.

Outlook: In the old day, insurance co only allow to invest in low return gov't bond, after China joined WTO, the govt allows insurance co to invest in stocks, banking and acquire co. in various sectors, which increase insurance co's profit significantly. In China, there are rules to protect local co against foregin competitors (need to register city by city, need to partner with local co etc), therefore local co. should enjoy strong growth at least for another few years.

Risk: 1) return heavily rely on investment income (which is all the insurance co doing), profit will be harm badly in bear market. 2) market share on 1st yr premium dropped from 47% to 42.5%, rise questions on future growth 3) stronger competition from local co (eg Ping An) and foregin co (eg 1st pacific) compare to the past.

Conclusion: my target price is $47 while current price is $45.5, therefore, instead of suggesting a "buy", i will only suggest you to "hold".