J.P. Morgan Overweight On CNinsure (CISG)

J.P. Morgan Chase & Co. has an Overweight rating on CNinsure Inc. CISG and a $28 price target after the company reported earnings yesterday. In a note sent to investors, J.P. Morgan writes, "CNinsure saw further business diversification with life commissions stood at 32% of total commissions (vs. 20% in 3Q09); 2) Non-life commissions grew by 7% Y/Y in 3Q10, reversing its declining trend driven by bottoming out of commission rate (from 16.8% in 2Q10 to 17.4% in 3Q10); 3) Operating margin rose to 30.7% in 3Q10 (vs. 29.5% in 3Q09 and 29.3% in 2Q10); 4) Rmb2.0bn of cash holdings as of end-3Q10 lifted by the US$109.6mn raised in July; 5) Effective tax rate stayed low at 17% in 3Q10, continuing the trend in 2Q10 thanks to a tax holiday enjoyed by one of its affiliates." Shares of CISG lost 43 cents yesterday to close at $21.91, a loss of nearly 2%.