China Life 2628; ADR (LFC)

[winston]

DJ MARKET TALK:China Life Off 5.5%;CS Tips 4Q Miss, Cuts Forecast

1003 [Dow Jones] China Life (2628.HK) down 5.5% at HK$20.75, but psychological HK$20.00 support may hold, after warns FY08 net profit to fall more than 50% on-year. Credit Suisse says guidance suggests miss relative to its earnings expectations, deterioration in 4Q08 reported profit to less than CNY1 billion, vs CNY2.3 billion in 3Q08, CNY10.8 billion in 1H08.

Believes miss due to weaker investment income, severe cost seasonality, higher reserving costs. Lowers FY08 earnings forecasts by 15%, FY09-10's by 8%-13%. Still, keeps Outperform call, HK$25.00 target price, as "continues to view China Life as defensive at this stage of the economic cycle."

[winston]

DJ MARKET TALK: China Life Down 7.3% But Citi Tips FY09 Recovery

1451 [Dow Jones] China Life (2628.HK) slumps 7.3% to HK$20.35 after warning FY08 net profit to fall more than 50% on-year, which implies FY08 earnings of at most CNY14.06 billion. Citigroup says net profit under HKFRS should be slightly better, currently estimates China Life to post 40% HKFRS profit decline.

Still, while FY08 worst year since listing, expects recovery in FY09; keeps view China Life should continue to outperform peers, wider market given resilient revenue profile, relatively low funding cost. Keeps Buy call, HK$28.50 target price. Stock 3rd most heavily traded with HK$1.41 billion; HK$20 psychological support set to hold.

[winston]

China Life dives after warning
Katherine Ng

China Life (2628) tumbled 7.5 percent yesterday to close at HK$20.30 after saying its 2008 net profit will drop by at least 50 percent.

The plunge came despite analysts maintaining their forecasts that the mainland's biggest insurer could outperform the market this year.

China Life performed better in Shanghai, closing only 1.8 percent lower at 19.92 yuan (HK$22.60) after diving more than 5 percent in early trading.

Although retail investors were bearish, analysts said China Life's profit-decline forecast had been anticipated and they would not revise their estimates. "There could be a significant discrepancy between the two accounting standards," JPMorgan analyst Michael Chan said. "We will maintain all its prospective estimates based on international accounting standards."

Chan said China Life could have chosen not to announce a profit warning.

"The insurer is still sitting on unrealized gains of 8.6 billion yuan at the end of the third quarter," he said. "It could have chosen not to realize the significant gains to defend earnings contraction."

Citi analyst Bob Leung agreed and said the size of the dividend could be a key swing factor for China Life's 2008 final results.

Both JPMorgan and Citi maintained their target price of HK$28.50.

[winston]

China Life collects $5.4 bln premiums in Jan

BEIJING, Feb 16 (Reuters) - China Life Insurance Co Ltd (601628.SS), the world's largest life insurer by market value, reported 36.6 billion yuan ($5.4 billion) in revenue from premiums in January.

China Life (2628.HK) did not provide a comparable figure for the same period last year in a filing document to the Shanghai Stock Exchange late on Monday.

China's insurance industry slowed considerably late last year. Total premiums for all insurers grew 39 percent in 2008, but year-on-year growth for December alone slowed to 6.9 percent, according to data from the China Insurance Regulatory Commission.

Local media reported that total premiums at China's top three life insurers, namely China Life Insurance Co, the life insurance arm of Ping An Insurance (Group) Co (601318.SS) and China Pacific Insurance (Group) Co (601601.SS), grew 11 percent in January from a year earlier to 55.5 billion yuan.

[winston]

DJ MARKET TALK: China Life Still The China Insur Play To Buy-Citi

0925 [Dow Jones] STOCK CALL: China Life (2628.HK) "still the one" to Buy among China insurance plays, says Citigroup; notes strong 19% on-year growth in January premium income despite slowing economy, Chinese New Year effect.

Says reinvestment risk of China Life's existing portfolio small in 2009; besides over 75% of bond portfolio being more than 5 years in duration, estimated maturity payout of up to CNY60 billion in 2009 would also reduce need for life insurer to reposition existing assets.

Says A-share market aside, investment opportunities associated with government-led infrastructure projects could even help company raise long-term sustainable investment yield. Keeps view China Life will continue to outperform peers, wider market on resilient revenue, earnings recovery in 2009. Sets target at HK$28.50. Stock closed +1.1% at HK$22.45 yesterday.

[winston]

DJ MARKET TALK: China Life +3.8%; CS Identifies Four Catalysts

1436 [Dow Jones] China Life (2628.HK) +3.8% at HK$23.45, mostly riding on broad market gains; is most heavily traded stock with HK$1.52 billion, stock hasn't traded above HK$24 since early February, may be near-term cap.

Credit Suisse keeps stock at Outperform with HK$25.00 target; identifies 4 key catalysts:-
1) stabilization of 10-year government bond yields above 3% should support 5% investment return assumption;
2) recent rebound in Shanghai Composite bodes well for potential NAV upgrades;
3) premium growth trends should underpin expectations of VNB growth in 2009;
4) regulatory reforms aimed at deepening capital market, broadening investment options another positive

[winston]

DJ MARKET TALK: China Life Down 2.4% But In Sweet Spot In 1H - GS

1101 [Dow Jones] China Life (2628.HK) down 2.4% at HK$24.65, is most heavily traded stock with HK$741.5 million, as profit-taking sets in after 5-session, 20.0% rally, but Friday's close of HK$23.70 unlikely to be troubled by pullback.

News premium income in January-February +13% on-year at CNY67.20 billion taken as mostly neutral; Goldman Sachs says data "modestly higher than expected," as believes China Life's product mix should be stable or improving vs 1H08 since regulators have been urging insurers to curb excessive growth of bancassurance products.

Keeps China Life at Buy though target price of HK$24 already surpassed; affirms view fundamentals of China life insurers "in the sweet spot" in 1H09 given rapid premium growth, equity returns from A-share market

[winston]

China Life net profit tumbles 45pc by Mandy Lo

China Life Insurance (2628), the largest life insurer by premiums in China, reported net profit sank 45 percent, the first plunge in earnings since its Hong Kong listing in December 2003, after suffering from investment losses in equity securities.

"The sharp fall in capital markets during 2008 due to the global financial crisis resulted in substantial pressure on the company's investment," chairman Yang Chao said yesterday.

Net income fell to 21.28 billion yuan (HK$24.14 billion) from 38.88 billion yuan while earnings per share dropped to 0.75 yuan from 1.38 yuan a year earlier. The company proposed a final dividend of 0.23 yuan per share, down from 0.42 yuan per share. Even as policy fees leaped 20.9 percent to 134.7 billion yuan, revenues fell 13 percent to 166.8 billion yuan.

Realized and fair-value losses on investments totaled 13.8 billion yuan, which was mainly generated from gross realized loss and impairments of equity investment, sharply down from a net gain of 34.2 billion yuan in 2007.

Investment income rose to 44.05 billion yuan from 44.02 billion yuan.

Yang said 2009 will be a more difficult year amid uncertainties in global economies and markets.

As at the end of last year, China Life slashed the proportion of equity securities held to 8 percent from 23 percent, while increasing debt securities to 61.4 percent from 52.1 percent and lifting term deposits to 24.4 percent from 19.8 percent.

A US$260 million (HK$2.02 billion) investment in the initial public offering of Visa International had a 70 percent return.

[winston]

DJ MARKET TALK: China Life Off 2.5% Pre-Mkt;Slower Premium Growth

0944 [Dow Jones] China Life (2628.HK) down 2.5% at HK$27.55 at pre-open, after 1Q January-March premium growth slows to 1.8% on-year, vs combined January and February's 12% on-year rise. UBS says while premiums did grow +21% on-month in March 2009, magnitude much less than March 2008's 46% on-month rise.

Notes decline due to company encouraging sales of higher margin regular premium over single premium policies and high base from bancassurance sales in March 2008, which will be difficult to replicate given regulator's tighter stance on banks as distribution channel.

Keeps at Neutral, target at HK$28.70. Stock may find 10-day moving average of HK$26.78 as immediate support

[winston]

Domestic rally lifts China Life by Katherine Ng, The Standard HK

China Life (2628), the mainland's largest insurer, earned 5.387 billion yuan (HK$6.11 billion) in the first quarter - 55 percent more than a year ago - as it ceased to book impairment and forex losses thanks to a recent rally in the domestic market.

Thanks to better domestic sentiment, the insurer recorded a writeback of 841 million yuan, compared with 5.51 billion yuan impairment losses in the same period last year.

Forex income turned to a net gain of 2 million yuan from a 536 million yuan loss last year, according to Chinese accounting standards, the firm said in a statement to the Shanghai Stock Exchange yesterday.

Premium income was 104 million yuan, at par with last year.
( In-Force Premiums less than New Business Premium below ? )

Sales rose to 116 billion yuan from 111 billion yuan.
( New Business Premium growth is very slow. Where's the great China growth story ? )

China Life shares outperformed the market yesterday, surging 4.04 percent to close at HK$27.35 ahead of the results.