Mercuries Life Insurance Company Ltd. provides life insurance products primarily in Taiwan. The company also offers health, accident, annuities, group, travel, and investment insurance products. It operates through five branch offices located in Taipei, Taichung, Chiayi, Tainan, and Kaohsiung. The company was incorporated in 1993 and is headquartered in Taipei, Taiwan.

Taiwan

Mercuries Life Insurance Company Ltd.

Financial Services

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

2867.TW reported revenue of TWD 99 375mn in the last 12 months, down 34% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. 

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 31ppts over six months and grown 13ppts slower in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is slightly negative.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 0.0% in the last 12 months, up from -2.6% in FY23. 

Historically, 2867.TW has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 2.2%, a growth from -6.3% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 0.1% in the last 12 months, an increase from -0.6% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to 0.1%, below the peers. 

Mercuries Life Insurance Company Ltd. reported a return on equity (RoE) of 5.1% in the last 12 months, up from -26.4% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -3.0 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

2867.TW has below average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity may be unstable and is unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note low margin volatility and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to slow historical revenue growth, bleak profitability, negligible return on capital, and poor cash flow generation.

In highly turbulent market conditions, 2867.TW is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, 2867.TW is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to notable. 

From both historical and forecast perspectives, the stock is moderately underpriced compared to similar stocks. Specifically, the stock is fairly valued on P/E. 

Mercuries Life Insurance Company Ltd.

NT$ 5.23

3

Mercuries Life Insurance Company Ltd.

NT$ 5.23

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

NT$ 5.23

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