报告名称：Dah Sing Financial Alert(00440.HK)Disposal of Insurance unit：A done deal
报告类型：港股研究
报告日期：2016-06-03
研究机构：德意志银行
股票名称：大新金融
股票代码：00440
页数：1
简介：Whatˇs new? Dah Sing Financial has announced an agreement to sell its life insurancebusiness to Thai Hot Group for HKD8bn, represented 2.16x 2015 insurance networth and 47% of DSF current market cap. Separately, DSBG has announcedthat, it will enter into bancassurance agreement with the buyer, with terms andconditions below.
Key terms of the announcements:
Total consideration of HKD8bn split between HK (HKD7.78bn) and Macau(HKD0.22bn), plus 2.5% interest from 31st Dec 2015 till closing date.
Purchaser: Everwin Enterprise (HK), wholly owned by Fujian Thai HotInvestment Co, which is based out of PRC and is engaged in financialservices, healthcare and real estate.
Bancassurance agreement: Post sale, DSB will exclusively sell theinsurance products of the insurance units being sold. The new partnershipis for 15 years, and DSB will receive a total of HKD2.6bn comprised ofupfront payment of HKD2.1bn and an annual payment of HKD53m for 10years. If we amortized the HKD2.6bn over 15 years, this would add 10bpsto its CET1% to 12.3% in 2016E.
Utilization of proceeds: Reinvestment in business, payment of a specialdividend and general working capital purposes.
A good deal for DSF
As we had noted in our earlier note on DSF titled ¨Unlocking value〃 (dated 24March 2016), the company has undertaken the strategic review of insuranceunit at the opportune time. If the sale happens at the reported deal price, itvalues the insurance division at 2.16x 2015 EV which we believe is a gooddeal, given the fact that Dah Sing Insurance remains a marginal player in HK.
Our current valuation methodology for DSF
We value DSF using SOTP as sum of DSBG (with 15% holding co discount)and insurance division valued at its 1x net worth of HKD4.4bn. If we were tovalue its insurance franchise based on the selling price, the SOTP could moveup to HKD62.3, comprised of share of value of DSBG at HKD12.9bn (post 15%disc.) and insurance franchise value based on disposal proceeds ofHKD8bn. Given a decent disposal price, there remains upside catalyst for DSF,with the potential of higher DPS payout.

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