Poised to Become China's Pruduential Insurance

Robert Hsu, September 30, 2009

China's insurance market is rapidly growing -- buoyed by the country's expanding per capital GDP growth.

In fact, in 2008 China's total insurance premiums reached $140 billion -- a year-over-year growth of 26% for the entire sector. And in the first half of 2009, despite the economic slowdown, premiums still climbed another 6.6% from the previous year.

But here's our opportunity. Right now, the industry is still in the earliest stages of growth, meaning a low penetration and a vast amount of room to grow. And so far, China's insurance market has followed in the footsteps of the U.S. -- what we've seen happen in the U.S. insurance industry over the past 20 to 30 years is happening right now in China.

And that's presenting us with a perfect investment. China's robust economic growth will allow more Chinese to afford more and better kinds of insurance products. In fact, the penetration rate is expected to grow from just 2% in 2007 to 3.5% in 2015, then hitting a whopping 4.4% in 2030. That's an annual growth rate of 14% per year until 2015, then another 9.5% annually until 2030!

When you consider China's enormous population base, the Chinese insurance market will grow to over $1 trillion by 2030. Now that's a trend we can't afford to miss out on!

So I've recommended my China Strategy readers invest in a leading Chinese brokerage service -- poised to become China's Prudential or ING.

After just two weeks my subscribers are sitting on gains of more than 10% -- and I'm expecting this company to go much, much higher.

Additionally, the company is still a great value, trading right below its IPO price and staying strong despite the global economic slowdown. For the first half of 2009, it reported a year-on-year increase of 43% in net revenue and a 36% gain in net income.

But I'm interested in even bigger growth than that. Here's why: The insurance business is set up so that you need a large network in order to set up an economy of scale and build up brand recognition -- making consolidation a definite possibility when the industry reaches a certain point.

The U.S. insurance industry has already reached that stage some time ago -- but China is just beginning to touch it. As a result, I expect large-scale consolidation in the Chinese insurance industry soon.

And this company is ready to leverage its existing leading position, large network and brand recognition to come out on top. Most importantly, the company also has plenty of cash and very low debt to profit from the coming mergers and acquisitions. In fact, cash is a whopping 71% of their total assets.

As the company continues to expand its business, I'm targeting some great gains and I want you to buy in before the next leg up. Don't miss out on this company and more opportunities to profit from dramatic growth in China's insurance market as it follows in the footsteps of the U.S. Make your most profitable decision all year -- join China Strategy today!