Morningstar

New China Life Insurance Co Ltd Class H 01336

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Stock XHKG Rating as of
HK$29.45 +1.85 (6.70%)
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As of Delayed Price Closed

Company Report

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China Insurers Earnings: Strong Earnings Growth, VNB Outlooks Remain Key for Future Re-Rating

Iris Tan

We retain our fair value estimate for China Life Insurance at HKD 20 per share, China Pacific Insurance, or CPIC, at HKD 30 per share, and New China Life, or NCI, at HKD 22 per share, following their interim results that reported strong recovery in respective net profit growth at 11%, 37%, and 11% year on year. We expect upside risk to our current 15% to 30% year-on-year net profit growth forecast in 2024 given a low base in the second half of 2023. The stronger-than-expected net profit growth was primarily boosted by strong investment return, and we’ve factored in a gradual pickup in investment return over our forecast period. We leave our major assumptions unchanged.

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Price vs Fair Value

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01336 is trading at a 262% premium.
Price
HK$29.45
Fair Value
HK$87.00
Uncertainty
High
1-Star Price
HK$34.50
5-Star Price
HK$63.40
Economic Moat
Qwyd
Capital Allocation
Bwlknfkj

Bulls Say, Bears Say

Bulls

China’s emerging health insurance market has a low insurance density and penetration levels, growing at a 36% CAGR over the past four years and we expect it will grow at around 25% in the next five years.

Bears

The increasing sales of single premium bancassurance products increased NCI's interest rate sensitivity.

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News

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Trading Information

Previous Close Price
HK$27.60
Day Range
HK$27.35–29.90
52-Week Range
HK$12.46–29.90
Bid/Ask
HK$29.40 / HK$29.45
Market Cap
HK$91.87 Bil
Volume/Avg
24.2 Mil / 8.4 Mil

Key Statistics

Price/Earnings (Normalized)
8.55
Price/Sales
1.08
Dividend Yield (Trailing)
3.16%
Dividend Yield (Forward)
3.16%
Total Yield
3.16%

Company Profile

New China Life Insurance, or NCI, was headquartered in Beijing and founded by SOEs and private firms in 1996. The company is the fourth-largest life insurer in China in terms of total assets. Huijin Investment, the government’s investment company owns 31% shares of New China Life. The company was listed on the Hong Kong and Shanghai Stock Exchanges in 2011. New China Life offers comprehensive life insurance products and services to individual customers and institutional customers through nationwide distributional networks and diversified marketing channels, manages and deploys insurance funds through its subsidiaries, including Asset Management Company and Asset Management Company (Hong Kong).
Sector
Financial Services
Industry
Insurance - Life
Stock Style Box
Large Value
Total Number of Employees
30,221
Website
https://www.newchinalife.com

Competitors

Valuation

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Metric
01336
601628
601318
Price/Earnings (Normalized)
 8.5552.4611.36
Price/Book Value
 0.952.521.12
Price/Sales
 1.082.431.27
Price/Cash Flow
 0.973.022.05
Price/Earnings
01336
601628
601318

Financial Strength

Metric
01336
601628
601318
Quick Ratio
 ———
Current Ratio
 ———
Interest Coverage
 1.10—1.02
Quick Ratio
No chart available

Profitability

Metric
01336
601628
601318
Return on Assets (Normalized)
 0.70%0.95%0.98%
Return on Equity (Normalized)
 9.63%12.06%12.58%
Return on Invested Capital (Normalized)
 29.31%5.76%7.94%
Return on Assets
01336
601628
601318

Insurance - Life Industry Comparables

Screen With Investor
1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
China Life Insurance Co Ltd Class H
CILJF
—Znhb$147.5 Bil
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PNGAY
—Khvg$142.1 Bil
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PIAIF
WznzwpqBqbys$142.1 Bil
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AAGIY
—Ddfb$104.6 Bil
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AAIGF
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 Aflac Inc
AFL
FhvsgdzfGswbrs$64.5 Bil
 MetLife Inc
MET
HhlvvzdPfvf$58.9 Bil
 Manulife Financial Corp
MFC
SdxjkpszWywx$53.6 Bil
 Prudential Financial Inc
PRU
ThrgjffrPylj$43.9 Bil
 Prudential PLC ADR
PUK
QmqdjzzkvPkhxl$25.1 Bil

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