Buffett Brain · Research note
2601.HK· Financial Services
China Pacific Insurance (Group)
China Pacific Insurance's 112% 5-year average ROIC and 62% owner earnings yield highlight a robust moat and compelling valuation.
Buffett fit
Strong fit
Owner
100
Durability
76
Management
87
Price
100
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Financial Services stocks in our database.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
Owning 100% of China Pacific Insurance would mean controlling a business with a 5-year average of 112.34% and a net margin of 12.42%.
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The company's insurance operations have shown resilience, with profitability maintained over the past 5 years despite a maximum EPS decline of 27.25%.
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Management has maintained a stable share count with a CAGR of 0.17%, indicating disciplined .
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With a of 5.8 and an yield of 62%, the valuation is highly attractive.
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- The full reasoning behind all four pillars
- The 5-year price target and the return it implies
- What would change the call
- Graham, Lynch and Greenblatt on the same stock
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
7- 15-year average of 112.34%, top-quintile in sector
- 2 yield of 62%, indicating strong cash generation
- 3Earnings yield of 17.35%, providing a significant
- 4Revenue CAGR of 9.41% over 5 years, showing steady growth
Concerns
5- 1Net margin of 12.42% below sector top-quintile
- 2EPS max decline of 27.25% over 5 years, indicating some earnings volatility
- 3Insufficient data on current ratio and interest coverage
- 4Potential regulatory changes in China's insurance market could impact operations
Price history
$27.78+11.6%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
China Pacific Insurance provides a range of insurance products, including life, health, property, and casualty insurance. It operates through segments such as Life and Health Insurance, Property and Casualty Insurance, and Asset Management. The company generated $430.81 billion in revenue with a net income of $53.51 billion. With an yield of 62%, the company has strong unit economics.
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Financial Services
Questions about China Pacific Insurance (Group)
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