Ping An Insurance Group Co of China Ltd reports 42.8% Net Income growth in 2017
20/03/2018 • About Ping An Insurance Group Co of China Ltd (
$2318) • By InTwits
Ping An Insurance Group Co of China Ltd reported 2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Ping An Insurance Group Co of China Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.3%. At the same time it's a lot of higher than industry average of 0.5%.
- CAPEX is quite volatile: 292 in 2017, 481 in 2016, 327 in 2015, 1,270 in 2014, 252 in 2013
- The company has potentially unprofitable business model: ROIC is at 2.5%
- It operates with high leverage: Net Debt/EBITDA is 2.6x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Ping An Insurance Group Co of China Ltd ($2318) key annual financial indicators
| mln. CNY | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 421,485 | 530,082 | 693,501 | 775,858 | 967,425 | 24.7% |
| Net Income | 28,154 | 39,279 | 54,203 | 62,394 | 89,088 | 42.8% |
Balance Sheet
|
|---|
| Cash | 119,706 | 141,537 | 194,465 | 462,931 | 418,970 | -9.5% |
| Short Term Debt | 631,108 | 555,825 | 529,494 | 673,960 | 914,511 | 35.7% |
| Long Term Debt | 1,248,271 | 1,598,567 | 1,978,320 | 349,825 | 451,283 | 29.0% |
Cash flow
|
|---|
| Capex | 10,083 | 13,530 | 16,529 | 16,624 | 19,257 | 15.8% |
Ratios
|
|---|
| Revenue growth | 24.2% | 25.8% | 30.8% | 11.9% | 24.7% | |
| Net Income Margin | 6.7% | 7.4% | 7.8% | 8.0% | 9.2% | 1.2% |
| CAPEX, % of revenue | 2.4% | 2.6% | 2.4% | 2.1% | 2.0% | -0.2% |
| ROIC | 1.7% | 2.0% | 2.5% | 2.2% | 2.5% | 0.2% |
| ROE | 16.4% | 16.6% | 17.4% | 17.4% | 20.8% | 3.4% |
Ping An Insurance Group Co of China Ltd ($2318) key quoterly financial indicators
| mln. CNY | 17Q1 | 17Q2 | 17Q3 | 17Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 283,952 | 217,862 | 219,698 | 245,913 | 26.5% | 18.7% | 18.8% | 34.5% |
| Net Income | 23,053 | 20,374 | 22,891 | 22,770 | 11.4% | 1.5% | 45.5% | 286.9% |
Balance Sheet
|
|---|
| Cash | 519,040 | 278,348 | 509,306 | 418,970 | -4.6% | -34.0% | 13.4% | -9.5% |
| Short Term Debt | 703,399 | 813,700 | 886,791 | 914,511 | 42.8% | 56.6% | 88.6% | 35.7% |
| Long Term Debt | 409,178 | 436,104 | 438,402 | 451,283 | 31.3% | 12.9% | 8.2% | 29.0% |
Ratios
|
|---|
| Net Income Margin | 8.1% | 9.4% | 10.4% | 9.3% | -1.1% | -1.6% | 1.9% | 6.0% |
Revenue and profitability
The company's Revenue surged on 24.7%. Revenue growth showed acceleration in 17Q4 - it increased 34.5% YoY.
Net Income marign increased slightly on 1.2 pp from 8.0% to 9.2% in 2017.
Capital expenditures (CAPEX) and working capital investments
Ping An Insurance Group Co of China Ltd's CAPEX/Revenue was 2.0% in 2017. Ping An Insurance Group Co of China Ltd's CAPEX/Revenue decreased slightly on 0.56 pp from 2.6% in 2014 to 2.0% in 2017. For the last three years the average CAPEX/Revenue was 2.2%.
Return on investment
The company operates at good ROE (20.80%) while ROIC is low (2.47%). ROIC showed almost no change in 2017. ROE increased on 3.4 pp from 17.4% to 20.8% in 2017.
Leverage (Debt)
Debt surged on 33.4% while cash decreased on 9.5%.
Appendix 1: Peers in Insurance
Below we provide Ping An Insurance Group Co 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 | 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% | |
|---|
