< The 2016 All-Asia Research Team

Total Appearances: 9

Team Debut: 2003

Credit Suisse vaults from runner-up to occupy this winner’s circle for the first time. Its research on regional insurance companies is now directed by Cheng (Charles) Zhou, who debuted last year as co-leader of Bank of America Merrill Lynch’s No. 2 team and jumped to Credit Suisse in September. Previously, the Hong Kong–based analyst, 33, worked as a reinsurance underwriter at Swiss Re in Sydney and as an auditor at Deloitte in Beijing. He received a master’s degree in finance from Hong Kong University of Science and Technology and holds a bachelor’s degree from the Beijing Information Science & Technology University. His squad reports on 12 companies from offices throughout the region, providing “efficient information on the sector and giving our team a lot value in trend analysis,” one money manager observes. The analysts see weakness in the China space. Indeed, year to date through late April, its insurance shares tumbled 16.4 percent, compared with the 6.2 percent decline by the regional group and nearly flat return from the broad market. Investors are concerned with falling rates to reinvestment risks, explains Zhou, as well as a weak A-share market and additional reserves charges to net profit. During the current downward rate cycle, his team recommends that clients prefer the property/casualty industry over life insurers, dubbing Hong Kong–headquartered AIA Group and the mainland’s China Pacific Insurance (Group) Co. top picks. China Pacific is “the best play in the property/casualty theme, at 30 percent of fair value,” he notes. “It is a diversified name with higher-quality growth than life.” The researchers’ target price for the stock, HK$35.25, represents a 21.6 percent premium to its value in late April. Regarding AIA, they point to its annual results as highlighting management’s continuing ability “to execute very well on both key strategies of margin enhancement and agent productivity,” Zhou says. “We believe that there is much room for progress on both counts, which enhances AIA’s medium-term profile.” Moreover, he adds, “the strong, largely ungeared balance sheet gives it additional flexibility, in terms of capital management and M&A, with new business strain reducing.” AIA closed at HK$46.80 late last month, and Credit Suisse pegs it at HK$51.70.