China Pacific Insurance Group Co Ltd reports 32.0% Net Income decline in 2016
29/03/2017 • About China Pacific Insurance Group Co Ltd (
$2601) • By InTwits
China Pacific Insurance Group Co Ltd reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Pacific Insurance Group Co Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's a lot of higher than industry average of 0.5%.
- CAPEX is quite volatile: 7,708 in 2016, 6,427 in 2015, 11,432 in 2014, 5,292 in 2013, 3,588 in 2012
- The company has potentially unprofitable business model: ROIC is at 2.0%
- It operates with high leverage: Net Debt/EBITDA is 1.9x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Pacific Insurance Group Co Ltd ($2601) key annual financial indicators
| mln. CNY | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 167,157 | 192,217 | 216,205 | 246,963 | 270,186 | 9.4% |
| Net Income | 5,077 | 9,261 | 11,049 | 17,728 | 12,057 | -32.0% |
Balance Sheet
|
|---|
| Cash | 23,875 | 16,561 | 10,766 | 8,678 | 15,257 | 75.8% |
| Short Term Debt | 50,143 | 25,199 | 26,908 | 28,981 | 39,104 | 34.9% |
| Long Term Debt | 15,579 | 15,765 | 19,759 | 19,572 | 11,498 | -41.3% |
Cash flow
|
|---|
| Capex | 3,057 | 3,676 | 3,645 | 3,257 | 6,079 | 86.6% |
Ratios
|
|---|
| Revenue growth | 7.5% | 15.0% | 12.5% | 14.2% | 9.4% | |
| Net Income Margin | 3.0% | 4.8% | 5.1% | 7.2% | 4.5% | -2.7% |
| CAPEX, % of revenue | 1.8% | 1.9% | 1.7% | 1.3% | 2.2% | 0.9% |
| ROIC | 1.7% | 2.5% | 2.6% | 3.4% | 2.0% | -1.4% |
| ROE | 5.9% | 9.5% | 10.2% | 14.2% | 9.1% | -5.1% |
China Pacific Insurance Group Co Ltd ($2601) key quoterly financial indicators
| mln. CNY | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 84,623 | 62,264 | 69,203 | 54,096 | | | | |
| Net Income | 2,199 | 3,943 | 2,687 | 3,228 | | | | |
Balance Sheet
|
|---|
| Cash | 13,888 | 10,581 | 10,582 | 15,257 | | | | |
| Short Term Debt | 21,127 | 41,592 | 37,573 | 39,104 | | | | |
| Long Term Debt | 19,497 | 19,497 | 19,497 | 11,498 | | | | |
Ratios
|
|---|
| Net Income Margin | 2.6% | 6.3% | 3.9% | 6.0% | | | | |
Revenue and profitability
The company's Revenue increased on 9.4%.
Net Income marign decreased on 2.7 pp from 7.2% to 4.5% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 2.2%. China Pacific Insurance Group Co Ltd's CAPEX/Revenue showed almost no change from 2013 to 2016. It's average CAPEX/Revenue for the last three years was 1.8%.
Return on investment
The company operates at low ROIC (2.02%) and ROE (9.10%). ROIC decreased slightly on 1.4 pp from 3.4% to 2.0% in 2016. ROE decreased on 5.1 pp from 14.2% to 9.1% in 2016.
Leverage (Debt)
Debt increased on 4.2% while cash surged on 75.8%.
Appendix 1: Peers in Insurance
Below you can find China Pacific Insurance Group Co 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) | | 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) | | 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) | | 7.0% | 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% |
| Target Insurance Holdings Ltd ($6161) | 2.7% | 5.8% | 7.4% | 6.2% | |
| |
|---|
| Median (6 companies) | 2.9% | 2.7% | 3.4% | 2.7% | 2.8% |
|---|
