AIA Group Ltd reports 50.6% Net Income growth and 20.8% Revenue growth
24/02/2017 • About AIA Group Ltd (
$1299) • By InTwits
AIA Group Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- AIA Group Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.4%. At the same time it's a lot of higher than industry average of 0.4%.
- CAPEX is quite volatile: 181 in FY2016, 139 in FY2015, 456 in FY2014, 472 in FY2013, 406 in FY2012
- The company has potentially unprofitable business model: ROIC is at 3.2%
- It operates with high leverage: Net Debt/EBITDA is 2.0x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
AIA Group Ltd ($1299) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 20,154 | 21,892 | 25,433 | 23,347 | 28,196 | 20.8% |
| Net Income | 3,019 | 2,824 | 3,450 | 2,765 | 4,164 | 50.6% |
Balance Sheet
|
|---|
| Cash | 2,948 | 2,316 | 1,835 | 1,992 | 1,642 | -17.6% |
| Short Term Debt | 1,792 | 1,889 | 3,753 | 3,085 | 1,984 | -35.7% |
| Long Term Debt | 766 | 1,950 | 2,934 | 3,195 | 3,460 | 8.3% |
Cash flow
|
|---|
| Capex | 406 | 472 | 456 | 139 | 181 | 30.2% |
Ratios
|
|---|
| Revenue growth | 42.3% | 8.6% | 16.2% | -8.2% | 20.8% | |
| Net Income Margin | 15.0% | 12.9% | 13.6% | 11.8% | 14.8% | 2.9% |
| CAPEX, % of revenue | 2.0% | 2.2% | 1.8% | 0.6% | 0.6% | 0.0% |
| ROIC | 3.1% | 2.9% | 3.2% | 2.5% | 3.2% | 0.7% |
| ROE | 12.6% | 11.0% | 12.4% | 8.9% | 12.6% | 3.7% |
Revenue and profitability
AIA Group Ltd's Revenue surged on 20.8%.
Net Income marign increased on 2.9 pp from 11.8% to 14.8% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 AIA Group Ltd had CAPEX/Revenue of 0.64%. AIA Group Ltd showed small CAPEX/Revenue decline of 1.5 pp from 2.2% in FY2013 to 0.64% in FY2016. It's average CAPEX/Revenue for the last three years was 1.0%.
Return on investment
The company operates at good ROE (12.60%) while ROIC is low (3.20%). ROIC increased slightly on 0.71 pp from 2.5% to 3.2% in FY2016. ROE increased on 3.7 pp from 8.9% to 12.6% in FY2016.
Leverage (Debt)
Debt dropped on 13.3% while cash dropped on 17.6%.
Management team
AIA Group Ltd's CEO is Mark Edward Tucker. Mark Edward Tucker has 8 years tenure at the company.
Appendix 1: Peers in Insurance
Below you can find AIA Group Ltd benchmarking vs. other companies in Insurance industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Taiping Insurance Holdings Co Ltd ($966) | 20.4% | 46.0% | -9.0% | 88.8% | |
| PICC Property & Casualty Co Ltd ($2328) | 18.7% | 18.1% | 16.9% | 17.9% | |
| Target Insurance Holdings Ltd ($6161) | -7.5% | 5.3% | 5.1% | 10.0% | |
| Asia Financial Holdings Ltd ($662) | 113.9% | -4.3% | 9.0% | -16.8% | |
| Manulife Financial Corp ($945) | | -37.7% | 203.5% | -38.2% | 57.5% |
| |
|---|
| Median (5 companies) | 19.6% | 5.3% | 9.0% | 10.0% | 57.5% |
|---|
| AIA Group Ltd ($1299) | | 8.6% | 16.2% | -8.2% | 20.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| PICC Property & Casualty Co Ltd ($2328) | 1.4% | 1.0% | 0.8% | 0.8% | |
| China Taiping Insurance Holdings Co Ltd ($966) | 1.2% | 2.3% | 4.9% | 0.5% | |
| Asia Financial Holdings Ltd ($662) | 0.3% | 0.0% | 14.0% | 0.3% | |
| Target Insurance Holdings Ltd ($6161) | 0.2% | 0.0% | 0.0% | 0.2% | |
| Manulife Financial Corp ($945) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (5 companies) | 0.3% | 0.0% | 0.8% | 0.3% | 0.0% |
|---|
| AIA Group Ltd ($1299) | 2.0% | 2.2% | 1.8% | 0.6% | 0.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| PICC Property & Casualty Co Ltd ($2328) | 7.0% | 6.4% | 7.4% | 8.7% | |
| Target Insurance Holdings Ltd ($6161) | 2.7% | 5.8% | 7.4% | 6.2% | |
| China Taiping Insurance Holdings Co Ltd ($966) | 1.1% | 1.3% | 2.2% | 3.0% | |
| Asia Financial Holdings Ltd ($662) | 4.7% | 2.6% | 3.7% | 1.9% | |
| Manulife Financial Corp ($945) | 0.9% | 1.9% | 2.0% | 1.1% | 1.2% |
| |
|---|
| Median (5 companies) | 2.7% | 2.6% | 3.7% | 3.0% | 1.2% |
|---|
| AIA Group Ltd ($1299) | 3.1% | 2.9% | 3.2% | 2.5% | 3.2% |
