Increase of 0.01% equity as props days Mao group performance to change magic

From a 19.99% to a 20% stake, this is not only a small change in equity, but it may also be a trigger for a surge in the performance of listed companies. October 20, Days Mao Group (000627, closing price of 5.94 Yuan) will convene a provisional shareholder meeting to review the long-term equity investment in Guohua life insurance method from the cost of the law to change the bill of Rights.　　Industry insiders say if the bill is passed, then in the third quarterly report, the days of the group will begin to share the potential earnings of Chinese longevity, coupled with the current investment in balance insurance contributions, insurance business accounted for the group's net profit ratio will exceed 70%, the company's performance is expected to increase. 0.　　1% cost law change of interest law September 28, days Mao Group board of Directors issued a notice that the board of Directors through the company proposed to change the China Life Insurance Company's long-term equity investment accounting method from the cost law to the bill of Rights and interests, the bill will be submitted to the General Assembly on October 20 to vote. According to accountants, the main difference between the cost method and the equity law is that the book value of the cost method is generally unchanged in the long-term equity investment, and only when the investment unit announces the profit or cash dividend, it is the current investment income. The law of equity affects the change of owner's equity according to the profit and loss of the invested unit and the announcement of cash dividend.　　Simply put, no matter how profitable the investment enterprise is, the cost method generally does not reflect the income, the law of equity reflects the change of income. According to the relevant provisions of the enterprise accounting standards relating to long-term equity investment, the proportion of the investment enterprise owning the voting shares of the invested unit is less than 20%, which is generally considered not to have significant influence on the invested unit, and the accounting method is applicable to the cost method.　　From November 8, 2007 onwards, the days of Mao Group as the sponsor of China Life, shareholders, holding the Chinese 19.99% stake in China, the shareholding ratio of less than 20%, so the use of cost method accounting. However, when an investment enterprise directly or through a subsidiary of more than 20%, but less than 50% voting shares, generally considered to be a significant impact on the investment unit.　　In July 2010, the days of the group through the increase in capital, the holding of Chinese-life shares reached 20%, while the chairman of the company, Mr. Liu as Chairman of the country, also can carry out a significant impact on Guohua, so the company believes that the long-term equity investment accounting method should be changed from the cost of the law of Guohua Life Release performance space Large for the impact of the cost law on the company's performance, the SEC Securities Representative LongFei told the Daily Economic news reporter, regular reports on the impact of the performance of the statement, but it is not clear.　　The September 28 announcement pointed out that the days of the group's 2010.5 net profit and the end of the owner's equity and unchanged accounting policy compared to less than 5%, the impact seems to be small. However, there are insiders told reporters, with the performance of Chinese longevity to enter a steady growth period, a-share market investment environment in the three quarter overall improvement, insurance business, especially the performance of Guohua life or will become the day Mao Group ThreeQuarterly and even the annual results of the outbreak point. First, the growth momentum of Guohua life is more fierce. Data show that Guohua life was established in November 8, 2007, the main life insurance, health insurance, accident insurance and other types of personal security business. As a result of Guohua life in 2008 officially set up in the nationwide establishment of business, start-up costs resulted in a loss of 159.88 million yuan. But a year later in 2009, Guohua life has achieved a net profit of 27.484 million yuan.　　According to the CIRC, 2010 1 ~ August, the total premium of Guohua life insurance is 3.009 billion yuan, the equivalent of 2009 annual premium income of 3.79 billion yuan 80%. Second, Guohua life has hidden a powerful tool for releasing performance – a huge sale of financial assets. Data show that 2009 Guohua Life of the financial assets available for sale as high as 5.207 billion yuan, investment income is only 280 million yuan.　　At the same time, the same belongs to the Tian Mao Group's balance insurance, the sale of financial assets for 770 million yuan, and investment income reached 158 million yuan. "It's very easy for insurers to release their results. An analyst who declined to be named told the Daily Economic news reporter that the huge amount of money for the sale of the financial assets of Guohua life would be a sharp weapon in its performance.　　Because Guohua life and the chairman of the days Mao group are Liu, in the country in accordance with the rights and interests of the Chinese days of the group's performance, the story behind it is self-evident. Earnings showed that the group's investment income in the balance insurance accounted for 2009 years, the first half of 2010 net profit of 55.7% and 57.6%. Once the income of Chinese longevity is added, the proportion of the insurance business to the net profit of the group is bound to break 70%, or even 80%.　　Although the group has the pharmaceutical, chemical, insurance three main business, but it is more like an insurance unit.　　It is noteworthy that on November 6 this year, the days of the group will usher in 4 natural persons hold 200 million restricted shares of the lifting, and this moment just in the series of magician-like capital operation behind, quite worth pondering.　　Balance Insurance IPO approach other industry insiders also said that the equity law has long been used to calculate the long-term equity investment income balance Insurance, the performance of the days of the group's contribution will show a steady increase. In the first half of this year, the days of the group confirmed the investment income of the balance of 20.576 million yuan, the amount has been 2009 year balance insurance contribution investment income of 28.019 million Yuan 73.4%.　　With the three-quarter a-share investment environment improved, balance insurance performance contribution is expected to continue to climb. From a long-term point of view, the listing of the balance insurance will bring more far-reaching impact on the days Mao group.　　September 14, 2009, Balance Motor Insurance Co., Ltd. and Guotai signed the "Stock issue listing Guidance agreement", and as required to the China Securities Regulatory Commission Shanghai Regulatory Authority for the registration procedures. Yesterday (October 12), a close to the balance of insurance insiders told reporters, balance insurance will be the fastest in the end of next year, the first half willIPO. The person pointed out that the balance of the guidance period has ended, but because it is a financial enterprise, the approval will be relatively slow, the CIRC to write a letter of guarantee, but these are not substantial obstacles to the listing. "The balance insurance has 100 million yuan in the first half of this year, the annual estimated profit will reach 250 million yuan." "These people told reporters that the scale of the insurance in the past few years, the growth rate is very fast, after the increase in capital, 630 million shares of total equity of the balance insurance, 2010 earnings per share of 0.4 yuan, to the insurance company 30 times times PE, the stock price will reach 12 yuan/share." Tin Mao Group holds 20% is 1.5 billion of the market value.