- August 23, 2021
We published a research report on CCNL (9983.HK) on the back of its recent interim results announcement. Please kindly see the full report attached.
Key Highlights:
We reiterate our Buy rating on Central China New Life, as we believe the stock is on track to achieve our ~47% YoY earnings growth estimate. Recent sell-off offers an attractive entry point, in our view, as it is now trading at attractive valuations of 11.5x 2021E P/E (Industry Average: 21x).
- We believe Central China New Life is on track to achieve our full year earnings growth estimate of 46.5% YoY, after the company reported a solid set of 1H21 results.
- Central China New Life’s 1H21 revenue came in at RMB1,564m with core net profit of RMB267m, marking a YoY increase of 47% and 45% respectively.
- 1H21 GP Margins and Core Net Margins came in at 32.1% and 17.1% respectively, higher than our expectations of 30.4% and 15.5%, respectively.
- We believe Central China New Life’s revenue quality has improved, considering that the 1H21 Trade Receivables has declined to RMB1.17bn (2H20: RMB1.2bn).
- Recent flooding in Henan may result in additional CAPEX and construction delays of 1-3 months at selected property projects, but we estimate the impact to be minimal at ~RMB10-20m.
