Asia Financial Holdings Ltd reports 49.1% Net Income decline
23/03/2016 • About Asia Financial Holdings Ltd (
$662) • By InTwits
Asia Financial Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Asia Financial Holdings Ltd doesn't have a profitable business model yet: 2015 ROIC is 1.9%
- Asia Financial Holdings Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.9%. At the same time it's a lot of higher than industry average of 1.0%.
- CAPEX is quite volatile: 3.0 in 2015, 188 in 2014, 0.27 in 2013, 3.3 in 2012, 0.64 in 2011
- The company has potentially unprofitable business model: ROIC is at 1.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Asia Financial Holdings Ltd ($662) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 601 | 1,285 | 1,229 | 1,339 | 1,115 | -16.8% |
| Net Income | -138 | 404 | 271 | 366 | 186 | -49.1% |
Balance Sheet
|
|---|
| Cash | 740 | 1,485 | 1,277 | 1,622 | 1,724 | 6.3% |
| Short Term Debt | 0 | 0 | 200 | 150 | 150 | 0.0% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 1 | 3 | 0 | 188 | 3 | -98.4% |
Ratios
|
|---|
| Revenue growth | -35.6% | 113.9% | -4.3% | 9.0% | -16.8% | |
| Net Income Margin | -22.9% | 31.4% | 22.0% | 27.3% | 16.7% | -10.6% |
| CAPEX, % of revenue | 0.1% | 0.3% | 0.0% | 14.0% | 0.3% | -13.8% |
| ROIC | -2.7% | 4.7% | 2.6% | 3.7% | 1.9% | -1.8% |
| ROE | -2.5% | 7.0% | 4.4% | 5.6% | 2.7% | -2.9% |
Revenue and profitability
The company's Revenue dropped on 16.8% in 2015.
Net Income marign dropped on 10.6 pp from 27.3% to 16.7% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Asia Financial Holdings Ltd had CAPEX/Revenue of 0.26%. CAPEX/Revenue showed almost no change from 2012 to 2015. For the last three years the average CAPEX/Revenue was 4.8%.
Return on investment
The company operates at low ROIC (1.87%) and ROE (2.67%). ROIC decreased slightly on 1.8 pp from 3.7% to 1.9% in 2015. ROE decreased on 2.9 pp from 5.6% to 2.7% in 2015.
Leverage (Debt)
Debt didn't change in 2015 while cash increased on 6.3% in 2015.
Appendix 1: Peers in Insurance
Below we provide Asia Financial Holdings Ltd benchmarking against other companies in Insurance industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Manulife Financial Corp ($945) | | -43.8% | -37.7% | 203.5% | -38.2% |
| Ping An Insurance Group Co of China Ltd ($2318) | | 25.1% | 24.2% | 25.8% | 30.8% |
| PICC Property & Casualty Co Ltd ($2328) | 6.9% | 18.7% | 18.1% | 16.9% | |
| AIA Group Ltd ($1299) | | 42.3% | 8.6% | 16.2% | -8.2% |
| People's Insurance Co Group of China Ltd ($1339) | 7.5% | 8.9% | 18.4% | 15.3% | |
| |
|---|
| Median (10 companies) | 7.2% | 8.2% | 14.9% | 13.9% | 12.6% |
|---|
| Asia Financial Holdings Ltd ($662) | | 113.9% | -4.3% | 9.0% | -16.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Taiping Insurance Holdings Co Ltd ($966) | 0.7% | 1.2% | 2.3% | 4.9% | 0.5% |
| Ping An Insurance Group Co of China Ltd ($2318) | 2.0% | 2.5% | 2.4% | 2.6% | 2.4% |
| AIA Group Ltd ($1299) | 0.6% | 2.0% | 2.2% | 1.8% | 0.6% |
| China Pacific Insurance Group Co Ltd ($2601) | 1.1% | 1.8% | 1.9% | 1.7% | |
| New China Life Insurance Co Ltd ($1336) | 1.4% | 1.2% | 1.6% | 1.6% | |
| |
|---|
| Median (10 companies) | 1.2% | 1.4% | 1.4% | 1.4% | 0.6% |
|---|
| Asia Financial Holdings Ltd ($662) | 0.1% | 0.3% | 0.0% | 14.0% | 0.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Target Insurance Holdings Ltd ($6161) | | 2.7% | 5.8% | 7.4% | 6.2% |
| PICC Property & Casualty Co Ltd ($2328) | 6.3% | 7.0% | 6.4% | 7.4% | |
| People's Insurance Co Group of China Ltd ($1339) | 3.1% | 3.1% | 2.7% | 3.2% | |
| AIA Group Ltd ($1299) | 2.0% | 3.1% | 2.9% | 3.2% | 2.5% |
| China Pacific Insurance Group Co Ltd ($2601) | 2.6% | 1.7% | 2.5% | 2.6% | |
| |
|---|
| Median (10 companies) | 1.9% | 1.5% | 2.2% | 2.4% | 2.5% |
|---|
| Asia Financial Holdings Ltd ($662) | -2.7% | 4.7% | 2.6% | 3.7% | 1.9% |
