Jan. 19, 2010 (Chinavestor) Large cap Chinese stocks have started to report 2009 full year operational statistics and unaudited preliminary numbers. China Life Insurance (NYSE:LFC) (HKG:2628), the largest Chinese life insurer ahead of Ping An Insurance (HKG:2318) reported total premiums income on Monday. China Unicom (NYSE:CHU), the second largest Chinese cell carrier after China Mobile (NYSE:CHL) reported operational statistics today.
According to unaudited company figures, China Life Insurance (NYSE:LFC) sold insurance policies worth RMB 295 billion ($43.4 billion) in 2009, slightly lower then in 2008. Looking at dynamics in the chart below, there is no acceleration of income from month to month.
Considering that share price of China Life Ins. (NYSE:LFC) advanced over 50% in 2009, the company should be trading at a premium. What justified such a stellar performance in 2009 was strong returns of investment income, a ~15% of all income for the company. The Shanghai Composite Index advanced +80% in 2009 with index heavy weights such as Petrochina (SHA:601857), the largest oil producer in Asia, and ICBC (SHA:601398), the largest financial institution in the world by market cap, recording strong advances in the year. Given that China Life Insurance (NYSE:LFC) got preferential asset allocation during the 2007 IPO boom, strong prices of ICBC and Petrochina boost LFC's investment income handsomely.
Chinavestor pays close attention to the Chinese telecom sector as well. China Unicom (NYSE:CHU) reported 2009 December operational statistics today - but investors have to dig in to see what's behind the numbers. 2009 was a year for China Unicom (HKG:0762) to shine - they introduced the iPhone in October 2009 while China Mobile (NYSE:CHL) (HKG:0941) hasn't had any comparable 3G phone at that time. Yet CHU failed to gain much traction as the following charts suggest - all three business segments experienced a slow down.
This spells trouble for China Unicom (NYSE:CHU) for the first quarter of 2010 - and creates opportunities for China Mobile (NYSE:CHU) and China Telecom (NYSE:CHA).
While the total number of cell phone users reached a company all time high of 144.845 million in December 2009, net addition per month have significantly slowed down compared to the February-March period.
The fixed line segment continued to lose subscribers - but at an accelerating speed. CHU Lost 10% of all fixed line subscribers in 2009. Unless a dramatic change occurs, China Unicom (NYSE:CHU) will have less then 100 million fixed line subscribers by the end of January 2010. While we are fully aware that China is more wireless then wired (mobile subscribers outnumber wired ones 4:1), the fast deterioration of the wireline segment spells trouble for the company.
The smaller yet important broadband segment experienced a significant slowdown as well in 2009. As the following chart testifies, China Unicom (NYSE:CHU) gained 219,000 new customers in December 2009 compared to 971,000 in January 2009.
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