People's Insurance Co Group of China Ltd reports 9.2% revenue growth in FY2016
24/03/2017 • About People's Insurance Co Group of China Ltd (
$1339) • By InTwits
People's Insurance Co Group of China Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- People's Insurance Co Group of China Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.2%. At the same time it's a lot of higher than industry average of 0.4%.
- CAPEX is quite volatile: 29,816 in 2016, 27,144 in 2015, 21,838 in 2014, 17,645 in 2013, 10,500 in 2012
- The company has potentially unprofitable business model: ROIC is at 2.2%
- 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.
People's Insurance Co Group of China Ltd ($1339) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 257,349 | 304,738 | 351,496 | 406,011 | 443,323 | 9.2% |
| Net Income | 6,832 | 8,121 | 13,109 | 19,542 | 14,245 | -27.1% |
Balance Sheet
|
|---|
| Cash | 71,438 | 40,024 | 33,671 | 34,023 | 39,804 | 17.0% |
| Short Term Debt | 71,290 | 44,453 | 35,488 | 29,211 | 33,066 | 13.2% |
| Long Term Debt | 35,217 | 47,333 | 48,601 | 39,210 | 46,084 | 17.5% |
Cash flow
|
|---|
| Capex | 4,491 | 3,776 | 3,864 | 3,551 | 3,621 | 2.0% |
Ratios
|
|---|
| Revenue growth | 8.9% | 18.4% | 15.3% | 15.5% | 9.2% | |
| Net Income Margin | 2.7% | 2.7% | 3.7% | 4.8% | 3.2% | -1.6% |
| CAPEX, % of revenue | 1.7% | 1.2% | 1.1% | 0.9% | 0.8% | -0.1% |
| ROIC | 3.1% | 2.7% | 3.2% | 4.3% | 2.2% | -2.1% |
| ROE | 14.1% | 11.9% | 16.0% | 18.7% | 11.9% | -6.8% |
Revenue and profitability
The company's Revenue increased on 9.2%.
Net Income marign decreased slightly on 1.6 pp from 4.8% to 3.2% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 0.82%. The company showed almost no change in CAPEX/Revenue from 2013 to 2016. Average CAPEX/Revenue for the last three years was 0.93%.
Return on investment
The company operates at low ROIC (2.22%) and ROE (11.90%). ROIC decreased on 2.1 pp from 4.3% to 2.2% in 2016. ROE decreased on 6.8 pp from 18.7% to 11.9% in 2016.
Leverage (Debt)
Debt jumped on 15.7% while cash surged on 17.0%.
Appendix 1: Peers in Insurance
Below we provide People's Insurance Co Group of China 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Taiping Insurance Holdings Co Ltd ($966) | | 46.0% | -9.0% | 88.8% | 3.7% |
| PICC Property & Casualty Co Ltd ($2328) | | 18.1% | 16.9% | 17.9% | 7.9% |
| Target Insurance Holdings Ltd ($6161) | -7.5% | 5.3% | 5.1% | 10.0% | |
| AIA Group Ltd ($1299) | | 8.6% | 16.2% | -8.2% | 20.8% |
| Asia Financial Holdings Ltd ($662) | | -4.3% | 9.0% | -16.8% | |
| |
|---|
| Median (6 companies) | -7.5% | 7.0% | 12.6% | 0.9% | 14.3% |
|---|
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% | 0.7% |
| AIA Group Ltd ($1299) | 2.0% | 2.2% | 1.8% | 0.6% | 0.6% |
| China Taiping Insurance Holdings Co Ltd ($966) | 1.2% | 2.3% | 4.9% | 0.5% | 0.7% |
| 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% | |
| |
|---|
| Median (6 companies) | 0.7% | 0.5% | 1.3% | 0.4% | 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% | 5.4% |
| AIA Group Ltd ($1299) | 3.1% | 2.9% | 3.2% | 2.5% | 3.2% |
| China Taiping Insurance Holdings Co Ltd ($966) | 1.1% | 1.3% | 2.2% | 3.0% | 2.4% |
| Manulife Financial Corp ($945) | 0.9% | 1.9% | 2.0% | 1.1% | 1.2% |
| Asia Financial Holdings Ltd ($662) | 4.7% | 2.6% | 3.7% | 1.9% | |
| |
|---|
| Median (5 companies) | 2.9% | 2.7% | 3.4% | 2.7% | 2.8% |
|---|
