Morningstar

China Pacific Insurance (Group) Co Ltd Class A 601601

Morningstar Rating
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Stock XSHG Rating as of
¥39.10 +3.33 (9.31%)
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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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601601 is trading at a 453% premium.
Price
¥39.10
Fair Value
¥91.00
Uncertainty
High
1-Star Price
¥78.90
5-Star Price
¥48.70
Economic Moat
Zrhnj
Capital Allocation
Tchgrqxnp

Bulls Say, Bears Say

Bulls

The regulator has introduced solvency regulations that are more accommodating, including a lower risk weight to equity investment and the approval of perpetual bond issuance. We expect this should improve flexibility for future dividend payments.

Bears

The regulatory reduction in the commission rate paid to the bancassurance channel could lead to a further decline in sales over the near term, despite potentially better profitability in the long run.

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Trading Information

Previous Close Price
¥35.77
Day Range
¥35.92–39.35
52-Week Range
¥21.27–39.35
Bid/Ask
¥39.09 / ¥39.10
Market Cap
¥376.16 Bil
Volume/Avg
114.9 Mil / 28.1 Mil

Key Statistics

Price/Earnings (Normalized)
11.15
Price/Sales
1.10
Dividend Yield (Trailing)
2.61%
Dividend Yield (Forward)
2.61%
Total Yield
2.61%

Company Profile

China Pacific Insurance was established in 1988, with headquarter in Beijing. The company is one of the largest providers of life and general insurance products and services. It is China's third-largest life insurer and third-largest general property and casualty insurer. The company strives for an integrated financial services platform that consists of insurance, banking, and asset management.
Sector
Financial Services
Industry
Insurance - Life
Stock Style Box
Large Value
Total Number of Employees
98,732
Website
https://www.cpic.com.cn

Competitors

Valuation

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Metric
601601
01299
601318
Price/Earnings (Normalized)
 11.1521.7411.36
Price/Book Value
 1.412.671.12
Price/Sales
 1.105.791.27
Price/Cash Flow
 2.65—2.05
Price/Earnings
601601
01299
601318

Financial Strength

Metric
601601
01299
601318
Quick Ratio
 ———
Current Ratio
 ———
Interest Coverage
 1.1312.101.02
Quick Ratio
No chart available

Profitability

Metric
601601
01299
601318
Return on Assets (Normalized)
 1.44%2.23%0.98%
Return on Equity (Normalized)
 13.45%15.38%12.58%
Return on Invested Capital (Normalized)
 79.05%12.10%7.94%
Return on Assets
601601
01299
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
—Tvpmn$147.5 Bil
 Ping An Insurance (Group) Co. of China Ltd Class H
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TcqsjqlVqcz$142.1 Bil
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AFL
XkpgdnswXvppzc$64.5 Bil
 MetLife Inc
MET
LqpdvhbdJzmt$58.9 Bil
 Manulife Financial Corp
MFC
GxprwzhdMjt$53.6 Bil
 Prudential Financial Inc
PRU
RgwwywpcJdqfr$43.9 Bil
 Prudential PLC ADR
PUK
RyynfnztmCxlpn$25.1 Bil

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