New China Life Insurance Co Ltd revenue decline decelerated to 1.2% in 2017 vs. 8.3% a year earliner
20/03/2018 • About New China Life Insurance Co Ltd (
$1336) • By InTwits
New China Life Insurance Co Ltd reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
- New China Life Insurance Co Ltd doesn't have a profitable business model yet: 2017 ROIC is 1.3%
- New China Life Insurance 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: 3,616 in 2017, 1,089 in 2016, 860 in 2015, 4,151 in 2014, 2,124 in 2013
- The company has potentially unprofitable business model: ROIC is at 1.3%
- It operates with high leverage: Net Debt/EBITDA is 3.3x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
New China Life Insurance Co Ltd ($1336) key annual financial indicators
| mln. CNY | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 128,217 | 142,094 | 157,918 | 144,796 | 143,082 | -1.2% |
| Net Income | 4,422 | 6,406 | 8,601 | 4,942 | 5,383 | 8.9% |
Balance Sheet
|
|---|
| Cash | 18,570 | 14,503 | 13,904 | 14,230 | 8,812 | -38.1% |
| Short Term Debt | 52,211 | 59,234 | 19,838 | 39,255 | 19,934 | -49.2% |
| Long Term Debt | 15,000 | 19,000 | 19,000 | 14,000 | 4,000 | -71.4% |
Cash flow
|
|---|
| Capex | 1,995 | 2,278 | 2,475 | 1,932 | 3,994 | 106.7% |
Ratios
|
|---|
| Revenue growth | 14.8% | 10.8% | 11.1% | -8.3% | -1.2% | |
| Net Income Margin | 3.4% | 4.5% | 5.4% | 3.4% | 3.8% | 0.3% |
| CAPEX, % of revenue | 1.6% | 1.6% | 1.6% | 1.3% | 2.8% | 1.5% |
| ROIC | 1.3% | 1.6% | 2.0% | 1.2% | 1.3% | 0.1% |
| ROE | 11.8% | 14.6% | 16.2% | 8.5% | 8.8% | 0.3% |
New China Life Insurance Co Ltd ($1336) key quoterly financial indicators
| mln. CNY | 17Q1 | 17Q2 | 17Q3 | 17Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 44,204 | 32,096 | 38,418 | 28,290 | -19.3% | -0.4% | 27.6% | 1.8% |
| Net Income | 1,837 | 1,400 | 1,805 | 341 | -7.9% | 4.6% | 24.2% | 118.6% |
Balance Sheet
|
|---|
| Cash | 18,912 | 15,044 | 11,672 | 8,794 | 30.3% | 16.9% | 1.6% | -37.8% |
| Short Term Debt | 41,879 | 29,766 | 32,785 | 19,934 | 119.2% | 3.2% | 15.6% | -49.2% |
| Long Term Debt | 14,000 | 14,000 | 4,000 | 4,000 | -26.3% | -26.3% | -71.4% | -71.4% |
Ratios
|
|---|
| Net Income Margin | 4.2% | 4.4% | 4.7% | 1.2% | 0.5% | 0.2% | -0.1% | 0.6% |
Revenue and profitability
New China Life Insurance Co Ltd's Revenue decreased slightly on 1.2%. Annual revenue decline showed slowdown in 17Q4 - revenue increased slightly on 1.8%.
Net Income marign showed almost no change in 2017.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.8% in 2017. The company's CAPEX/Revenue increased slightly on 1.2 pp from 1.6% in 2014 to 2.8% in 2017. It's average CAPEX/Revenue for the last three years was 1.9%.
Return on investment
The company operates at low ROIC (1.26%) and ROE (8.76%). ROIC showed almost no change in 2017. ROE showed almost no change in 2017.
Leverage (Debt)
Debt dropped on 55.1% while cash dropped on 38.1%.
Appendix 1: Peers in Insurance
Below we provide New 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 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Manulife Financial Corp ($945) | -37.7% | 203.5% | -38.2% | 57.5% | |
| AIA Group Ltd ($1299) | 8.6% | 16.2% | -8.2% | 20.8% | |
| PICC Property & Casualty Co Ltd ($2328) | 18.1% | 16.9% | 17.9% | 7.9% | |
| China Taiping Insurance Holdings Co Ltd ($966) | 46.0% | -9.0% | 88.8% | 3.7% | |
| |
|---|
| Median (4 companies) | 7.0% | 12.6% | 0.9% | 14.3% | |
|---|
Top companies by CAPEX/Revenue, %
| Top | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| PICC Property & Casualty Co Ltd ($2328) | 1.0% | 0.8% | 0.8% | 0.7% | |
| China Taiping Insurance Holdings Co Ltd ($966) | 2.3% | 4.9% | 0.5% | 0.7% | |
| AIA Group Ltd ($1299) | 2.2% | 1.8% | 0.6% | 0.6% | |
| Manulife Financial Corp ($945) | 0.0% | 0.0% | 0.0% | 0.0% | |
| |
|---|
| Median (4 companies) | 0.5% | 1.3% | 0.4% | 0.6% | |
|---|
Top companies by ROIC, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| PICC Property & Casualty Co Ltd ($2328) | 6.4% | 7.4% | 8.7% | 5.4% | |
| AIA Group Ltd ($1299) | 2.9% | 3.2% | 2.5% | 3.2% | |
| China Taiping Insurance Holdings Co Ltd ($966) | 1.3% | 2.2% | 3.0% | 2.4% | |
| Manulife Financial Corp ($945) | 1.9% | 2.0% | 1.1% | 1.2% | |
| Target Insurance Holdings Ltd ($6161) | 5.8% | 7.4% | 6.2% | | |
| |
|---|
| Median (6 companies) | 2.7% | 3.4% | 2.7% | 2.8% | |
|---|
