Fanhua (AIFU) AI Stock Analysis

• Market Cap: $25.68M
• Dividend Yield: N/A
• Average Volume (3M): 48.47K
• Price to Earnings (P/E): 4.3
• Beta (1Y): 1.01
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 4,707
• Sector: Financial
• Sector Strength: 71
• Industry: Insurance - Specialty
• EPS (TTM): 1.10
• Shares Outstanding: 2,895,264
• 10 Day Avg. Volume: 30,707
• 30 Day Avg. Volume: 48,466
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $6.50
• Price Target Upside: 35.70% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 68 Neutral
• Price Target: $6.50 ▲(35.70% Upside)

AIFU's overall stock score is driven by strong balance sheet stability and an attractive valuation, suggesting potential undervaluation. However, technical indicators show mixed signals, and income statement weaknesses with declining revenues and operational losses pose risks. Addressing these challenges is crucial for long-term growth.

Fanhua Business Overview & Revenue Model

Company Description

AIX 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 Money

Fanhua generates revenue primarily through insurance brokerage fees, which are earned when the company facilitates the sale of insurance policies to clients. This includes commissions from life, health, and property insurance products. Additionally, the company earns income from asset management services, where it manages investments for clients and receives management fees. Other revenue streams may include consulting services and partnerships with insurance providers that may offer referral bonuses or performance-based incentives. Significant partnerships with major insurance companies enhance Fanhua's product offerings and distribution capabilities, contributing to its overall 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

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

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

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.20B	1.81B	3.20B	2.78B	3.27B	3.27B
Gross Profit	1.05B	695.97M	1.05B	986.01M	1.16B	1.05B
EBITDA	188.27M	-2.42M	229.88M	188.15M	320.29M	320.13M
Net Income	280.48M	454.96M	280.48M	100.27M	250.99M	268.25M
Balance Sheet
Total Assets	4.05B	4.15B	4.05B	3.09B	3.24B	3.08B
Cash, Cash Equivalents and Short-Term Investments	1.55B	821.33M	1.55B	915.28M	1.44B	1.55B
Total Debt	292.77M	206.49M	292.77M	172.17M	215.29M	189.76M
Total Liabilities	1.71B	1.52B	1.71B	1.36B	1.28B	1.13B
Stockholders Equity	2.07B	2.55B	2.07B	1.62B	1.84B	1.83B
Cash Flow
Free Cash Flow	88.79M	134.40M	88.79M	60.01M	95.41M	387.05M
Operating Cash Flow	101.79M	142.85M	101.79M	137.75M	126.20M	402.30M
Investing Cash Flow	-234.31M	-436.59M	-234.31M	-127.56M	450.40M	325.34M
Financing Cash Flow	86.18M	-64.39M	86.18M	-20.37M	-260.30M	-638.81M

Fanhua Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.79
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AIFU, the sentiment is Negative. The current price of 4.79 is below the 20-day moving average (MA) of 6.07, below the 50-day MA of 6.16, and below the 200-day MA of 9.39, indicating a bearish trend. The MACD of -0.46 indicates Positive momentum. The RSI at 38.27 is Neutral, neither overbought nor oversold. The STOCH value of 23.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AIFU.

Fanhua Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ITIC	72 Outperform	$462.66M	14.11	12.55%	6.47%	15.28%	26.05%
Sector *	68 Neutral	$17.69B	11.82	10.30%	3.73%	9.66%	0.42%
AIFU	68 Neutral	$25.68M	4.32	12.00%	―	―	―
MBI	56 Neutral	$398.86M	―	26.69%	―	―	66.83%
HIPO	55 Neutral	$830.68M	―	-3.27%	―	43.15%	94.09%
JRVR	52 Neutral	$265.40M	―	-13.01%	1.38%	-20.88%	1.34%
AMBC	49 Neutral	$404.16M	64.08	-4.09%	―	-17.06%	-118.90%