China Life Insurance Co Ltd revenue jumped on 15.1% in 2015
23/03/2016 • About China Life Insurance Co Ltd (
$2628) • By InTwits
China Life Insurance Co Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Life Insurance Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.3%. At the same time it's a lot of higher than industry average of 1.0%.
- CAPEX is quite volatile: 27,144 in 2015, 21,838 in 2014, 17,645 in 2013, 10,500 in 2012, 12,054 in 2011
- The company has potentially unprofitable business model: ROIC is at 2.2%
- It operates with high leverage: Net Debt/EBITDA is 2.3x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Life Insurance Co Ltd ($2628) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 370,899 | 371,485 | 417,883 | 440,766 | 507,449 | 15.1% |
| Net Income | 18,331 | 11,061 | 24,765 | 32,211 | 34,699 | 7.7% |
Balance Sheet
|
|---|
| Cash | 55,985 | 69,452 | 21,330 | 47,034 | 76,096 | 61.8% |
| Short Term Debt | 13,000 | 68,499 | 20,426 | 56,979 | 32,210 | -43.5% |
| Long Term Debt | 29,990 | 67,981 | 67,985 | 70,612 | 70,637 | 0.0% |
Cash flow
|
|---|
| Capex | 5,108 | 5,293 | 3,724 | 5,048 | 8,384 | 66.1% |
Ratios
|
|---|
| Revenue growth | -3.9% | 0.2% | 12.5% | 5.5% | 15.1% | |
| Net Income Margin | 4.9% | 3.0% | 5.9% | 7.3% | 6.8% | -0.5% |
| CAPEX, % of revenue | 1.4% | 1.4% | 0.9% | 1.1% | 1.7% | 0.5% |
| ROIC | 1.4% | 0.7% | 1.7% | 2.1% | 2.2% | 0.1% |
| ROE | 9.2% | 5.4% | 11.2% | 12.8% | 11.4% | -1.3% |
Revenue and profitability
China Life Insurance Co Ltd's Revenue surged on 15.1% in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 China Life Insurance Co Ltd had CAPEX/Revenue of 1.7%. The company showed almost no change in CAPEX/Revenue from 2012 to 2015. Average CAPEX/Revenue for the last three years was 1.2%.
Return on investment
The company operates at low ROIC (2.20%) and ROE (11.44%). ROIC showed almost no change in 2015. ROE decreased slightly on 1.3 pp from 12.8% to 11.4% in 2015.
Leverage (Debt)
Debt dropped on 19.4% in 2015 while cash surged on 61.8% in 2015.
Appendix 1: Peers in Insurance
Below we provide China Life Insurance Co 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% | 13.8% | 14.9% | 13.9% | 0.9% |
|---|
| China Life Insurance Co Ltd ($2628) | | 0.2% | 12.5% | 5.5% | 15.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Asia Financial Holdings Ltd ($662) | 0.1% | 0.3% | 0.0% | 14.0% | 0.3% |
| 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% | |
| |
|---|
| Median (10 companies) | 0.9% | 1.3% | 1.4% | 1.6% | 0.4% |
|---|
| China Life Insurance Co Ltd ($2628) | 1.4% | 1.4% | 0.9% | 1.1% | 1.7% |
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% | |
| Asia Financial Holdings Ltd ($662) | -2.7% | 4.7% | 2.6% | 3.7% | 1.9% |
| 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% |
| |
|---|
| Median (10 companies) | 1.9% | 2.2% | 2.5% | 2.9% | 2.5% |
|---|
| China Life Insurance Co Ltd ($2628) | 1.4% | 0.7% | 1.7% | 2.1% | 2.2% |
