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Fanhua (AIFU)
NASDAQ:AIFU

Fanhua (AIFU) AI Stock Analysis

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Fanhua

(NASDAQ:AIFU)

Rating:65Neutral
Price Target:
$3.00
▼(-6.25%Downside)
AIFU's overall score is primarily influenced by its strong balance sheet and undervaluation. However, bearish technical indicators and declining revenues present significant risks.

Fanhua (AIFU) vs. SPDR S&P 500 ETF (SPY)

Fanhua Business Overview & Revenue Model

Company DescriptionAIX Inc., together with its subsidiary, distributes insurance products in China. It operates through two segments, Insurance Agency and Claims Adjusting. The Insurance Agency segment provides life and health insurance products, such as individual whole life, individual health, individual annuity, individual term life, individual endowment life, and participating insurance products; and non-life insurance products primarily includes individual accident, travel, homeowner, indemnity medical, commercial property, cargo, hull, liability, construction and erection, and extended warranty insurance products. The Claims Adjusting segment offers pre-underwriting survey, claims adjusting, residual value disposal, loading and unloading supervision, and consulting services. The company also provides value-added services; elderly care services; healthcare services; and family governance services. In addition, it operates Baowang (baoxian.com), an online insurance distribution platform; Lan Zhanggui, an all-in-one insurance sales and service platform; FA app, an all-in-one insurance sales and service platform; ehuzhu.com, an online mutual aid platform; Fanhua RONS DOP, a digital marketing platform; Fanhua RONS Guanjia, a customer service platform; and Fanhua WeCom that enables agents to directly interact with existing and potential customers. The company serves customers through insurance sales and service group, and insurance agencies, as well as sales and service outlets, independent sales agents, and in-house claims adjustors. The company was formerly known as Fanhua Inc. and changed its name to AIX Inc. in November 2024. AIX Inc. was founded in 1998 and is headquartered in Guangzhou, China. AIX Inc. operates as a subsidiary of Highest Performances Holdings Inc. As of December 18, 2024, AIX Inc. operates as a subsidiary of ALi Innovations Corporation.
How the Company Makes MoneyFanhua Inc. generates revenue primarily through commissions and fees earned from the distribution of insurance products. The company partners with a wide range of insurance providers to offer a diverse portfolio of life and property and casualty insurance products to its clients. Revenue streams include commission income from insurance carriers based on the premium value of the policies sold and service fees for providing ancillary services such as policy administration and claims settlement. Additionally, Fanhua benefits from strategic partnerships with various insurance companies, which enhances its product offerings and market reach, contributing significantly to its earnings.

Fanhua Financial Statement Overview

Summary
AIFU shows financial stability with a strong balance sheet and improved cash flow management. However, declining revenues and operational inefficiencies are significant concerns.
Income Statement
65
Positive
The company's gross profit margin for the latest year is approximately 38.47%, which is fairly strong, but it has been declining over the years. The net profit margin improved significantly to 25.15%. However, there's a concerning negative EBIT margin due to a reported loss, indicating operational inefficiencies. Revenue has decreased substantially by about 43.45% from the previous year, presenting a major challenge.
Balance Sheet
70
Positive
The company maintains a healthy equity ratio of 61.34%, showing financial stability with a strong proportion of equity in its asset base. The debt-to-equity ratio is low at 0.08, indicating low leverage risk. Return on equity has improved to 17.86%, reflecting enhanced profitability for shareholders.
Cash Flow
75
Positive
Operating cash flow to net income ratio is 0.31, which is moderate and suggests cash generation from core operations. Free cash flow increased by 51.39% over the previous year, showing strong cash flow management. The free cash flow to net income ratio is 0.3, indicating a balance between cash earnings and net income.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
3.20B1.81B3.20B2.78B3.27B3.27B
Gross Profit
1.05B695.97M1.05B986.01M1.16B1.05B
EBIT
195.82M-15.10M195.82M168.68M301.90M302.19M
EBITDA
188.27M-2.42M229.88M188.15M320.29M320.13M
Net Income Common Stockholders
280.48M454.96M280.48M100.27M250.99M268.25M
Balance SheetCash, Cash Equivalents and Short-Term Investments
1.55B821.33M1.55B915.28M1.44B1.55B
Total Assets
4.05B4.15B4.05B3.09B3.24B3.08B
Total Debt
292.77M206.49M292.77M172.17M215.29M189.76M
Net Debt
-228.76M14.37M-228.76M-395.35M-349.33M-55.67M
Total Liabilities
1.71B1.52B1.71B1.36B1.28B1.13B
Stockholders Equity
2.07B2.55B2.07B1.62B1.84B1.83B
Cash FlowFree Cash Flow
88.79M134.40M88.79M60.01M95.41M387.05M
Operating Cash Flow
101.79M142.85M101.79M137.75M126.20M402.30M
Investing Cash Flow
-234.31M-436.59M-234.31M-127.56M450.40M325.34M
Financing Cash Flow
86.18M-64.39M86.18M-20.37M-260.30M-638.81M

Fanhua Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price3.20
Price Trends
50DMA
3.09
Positive
100DMA
5.08
Negative
200DMA
15.02
Negative
Market Momentum
MACD
-0.07
Negative
RSI
51.69
Neutral
STOCH
76.06
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AIFU, the sentiment is Neutral. The current price of 3.2 is above the 20-day moving average (MA) of 3.02, above the 50-day MA of 3.09, and below the 200-day MA of 15.02, indicating a neutral trend. The MACD of -0.07 indicates Negative momentum. The RSI at 51.69 is Neutral, neither overbought nor oversold. The STOCH value of 76.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AIFU.

Fanhua Risk Analysis

Fanhua disclosed 68 risk factors in its most recent earnings report. Fanhua reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Fanhua Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
65
Neutral
$175.61M2.9012.00%
64
Neutral
$12.85B9.817.79%78.20%12.23%-7.93%
59
Neutral
$377.71M12.7511.69%0.92%15.22%19.19%
59
Neutral
$261.13M-11.67%0.70%-23.83%-11.60%
55
Neutral
$698.11M-15.58%77.44%85.53%
47
Neutral
$312.46M63.25-2.23%10.50%-92.02%
MBMBI
28
Underperform
$220.63M26.69%583.33%6.59%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AIFU
Fanhua
3.20
-57.20
-94.70%
ITIC
Investors Title Company
202.00
42.08
26.31%
MBI
MBIA
4.30
-1.03
-19.32%
AMBC
Ambac Financial
6.85
-6.19
-47.47%
JRVR
James River Group
5.85
-1.82
-23.73%
HIPO
Hippo Holdings
27.10
10.53
63.55%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.