A finance expert claimed that China Life Insurance might be a good investment in the long run. The expert analyzed several financial areas of the venture and claimed that it had been a profitable entity and has been experiencing increasing earnings per share in recent months.
An affiliate of Yahoo! Finance Simply Wall St. claimed that many investors have been eyeing the China Life Insurance in recent months due to its good financial market performance. It was exclaimed that the entity had not only been generating revenue but profits as well.
It was mentioned that capitalists would consider the company's profits as a sign of steady value generation. However, it was also mentioned that a loss-making company might be able to redeem itself and improve its capital in the long run. The expert claimed that China Life Insurance is among those companies that may generate good financial performance in the long run.
According to the report, the Chinese financial market is a 'voting machine' in the short-run, but a 'weighing machine' in the long run. The expert then mentioned that this meant the earnings per share (EPS) of the China Life Insurance might grow in the long-term since its annual EPS growth has been at 52 percent per year in the last three years. Riverton Roll reported that it had revenue of 23.78 billion USD for the third quarter of 2019 alone.
The expert then added that the growth rate might not be sustainable in the long run. However, it was claimed that there are other parts of the entity that also showed promising signs. The earnings before interest (EBIT) tax margins including revenue growth would be significant factors to look into when assessing a company's viability as a healthy investment, the expert said. The report further noted that looking into these factors would prove that the company's growth is of high quality.
It was then discussed that China Life Insurance's revenue from its operations had been lower than its revenue in the last 12 months. It was further added that its EBIT margins had been steady or unmoving in 2019. However, it was highlighted that its revenue growth was a solid 11 percent amounting to 718 billion Chinese Yuan in 2019 alone. The expert then concluded that revenue growth is a promising sign that the venture could be a healthy investment.
Furthermore, it was shown that China Life Insurance insiders own 0.03 percent of the company. Their shares were perceived to be lower despite the valuation of China Life Insurance at 978 billion Hong Kong dollars. However, it was revealed that the insiders hold 301 million Chinese Yuan worth of stocks. The expert then claimed that the value of those stocks represented a significant buy-in. Furthermore, it was claimed that this showed that the company's investors showed great conviction in its business strategy.
