China Life 2628; ADR (LFC)

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Brokers' Post-result Ratings, TPs, Views on CHINA LIFE (02628.HK) (Table)

Brokers│Ratings│TPs (HK$)
Citigroup│Buy│27
Credit Suisse│Outperform│23
CICC│Outperform│20
BofA Securities│Buy│21.2->19.3
Daiwa│Buy│16
UBS│Buy│15

Brokers│Views
Citigroup│1H profit above forecast; VNB in line
Credit Suisse│VNB falls 19%, dented by sales, profit margin contraction
CICC│1H VNB growth dented by high base, may improve in 2H
BofA Securities│VNB in line
Daiwa│1H VNB in line
UBS│VNB faces challenge on agent channel

CHINA LIFE (02628.HK) Interim NP Grows 34.2% to RMB40.975B

Source: AAStocks Financial News

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not vested

CHINA LIFE: To Strive for Stable Growth Amid Near-term Challenges on Insurance Sector

CHINA LIFE's VNB declined by 19% YoY over 1H to RMB29.867 billion.

The company's president Su Hengxuan expressed at the result meeting that the overall insurance sector is still facing enormous pressure as the people's diminishing spending sentiment was reflected on their investments in insurance and wealth management products, coupled with slower China's economic growth in 2Q than 1Q.

Su, however, remarked that the near-term challenges which the industry is withstanding are merely temporary and restated his confidence in the positive outlook of Chinese economy in the long-term.

Su said that CHINA LIFE will endeavour to further strengthen the asset-liability interaction and their coordinated management, while maintaining prudent operation and stable development.

Source: AAStocks Financial News

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CHINA LIFE INSURANCE (2628 HK / 601628 CH)

Recommendation : BUY (2628 HK) / SELL (601628 CH)
Fair Value : HKD 16.80 (2628 HK) / CNY 14.00 (601628 CH)

VNB DOWN 19% YOY IN 1H21.

1H21 net profit grew 34% yoy to CNY41bn, driven by strong investment income.

Value of new business and agency size shrank, reflecting ongoing industry-wide pain and continued challenges from the pandemic.

Fair value reduced to HKD16.80 (2628 HK) / CNY 14.00 (601628 CH), reflecting a discount for its lower than sector average ESG rating and lower estimates in view of the moderation in growth outlook, which should lead to a weaker VNB outlook for the full year.

Undemanding valuations however has reflected much of the near-term industry headwinds, while the structural growth outlook remains positive.

With rising protection and wealth management needs of China’s rising middle class, China Life is one of the key beneficiaries of this medium term growth trend as a leading domestic life insurer with ~15-20% estimated market share.

The regulatory shift towards more long-term and protection product mix is positive for future margins but transition to the new business model and transformation process led by new management, may be bumpy amidst the current challenging operating environment, hampered by concerns from volatile equity markets and impact on face-to-face sales recovery following the Covid-19 outbreak.

Dividend payout as of end FY20 was 36%.

While we see value, we believe investors will need to be patient given a continued gradual recovery outlook for the sector as offline business takes time to normalize amid intensifying competition, while the stabilization of China’s bond yield and better A-share equity market on the back of an improving macro backdrop should be supportive of investment income generation.

Source: OCBC

[winston]

not vested

China Life Insurance (LFC)

52-week range: $8.17 – $12.39

China Life Insurance is China’s largest life insurance company in terms of premiums.

With around 170,000 employees, it ranks No. 52 on the Fortune Global 500 list.

Since the insurer has a controlling stake in China Life Asset Management Co. Ltd, it is one of China’s largest asset managers as well. The group was listed on the New York Stock Exchange in 2003.

On Aug. 25, China Life Insurance released interim results for the six-month period ended June 30.

Total revenue was up 6.5% from a year ago, while gross written premiums were up by 3.5%.

Net profits were up by 34.2% over the past year.

So far in 2021, LFC stock is down about 21%, and the current price supports a dividend yield of almost 5.7%.

Trailing P/E is at 5.2x, the price-sales ratio is 0.4 and its price-book ratio is at 0.7.

Potential investors could consider buying around these levels.

Source: Investor Place

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not vested

CHINA LIFE (02628.HK) 9M21 Premium Income Grows 1.8%

CHINA LIFE (02628.HK) announced that the accumulated premium income of the company for the first nine months of 2021 was RMB553.4 billion, up 1.8% YoY.

Source: AAStocks Financial News

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vested

China Life Insurance Company (2628) recorded a 3 percent rise in net profit to 48.5 billion yuan (HK$58.96 billion) in the first nine months from a year ago while its net profit in the third quarter shrank by 54.5 percent to 7.53 billion yuan.

In the first three quarters, the insurer's revenues from the insurance business grew 1.8 percent to 553.44 billion yuan, but the value of new business plunged 19.6 percent.

As of the end of September, the company's investment assets expanded 11 percent to 4.54 trillion yuan from the end of last year.

The gross investment income increased 12.8 percent year-on-year to 165.7 billion yuan with a gross investment yield of 5.25 percent.

The net investment income was 139.2 billion yuan, which was 13.4 percent higher compared with last year, and the net investment yield was 4.4 percent.

In addition, the insurer's total sales force was 1.05 million as of the end of September, dropped by 36.7 percent year on year.

Source: The Standard

[winston]

not vested

China Life Insurance (2628 HK / 601628 CH) - Continued softness in 3Q

With rising protection and wealth management needs of China’s rising middle class, China Life is one of the key beneficiaries of this medium-term growth trend as a leading domestic life insurer with ~15-20% estimated market share.

The regulatory shift towards more long-term and protection product mix is positive for future margins but transition to the new business model and transformation process led by new management may be bumpy amidst the current challenging operating environment hampered by concerns from volatile equity markets and impact on face-to-face sales recovery following the Covid-19 outbreak.

Dividend payout as of end FY20 was 36%. While we see value, we believe investors will need to be patient given a continued gradual recovery outlook for the sector as offline business takes time to normalize amid intensifying competition and ongoing macro slowdown in China. BUY (2628 HK) / SELL (601628 CH).

Source: OCBC

[winston]

not vested

China Life Insurance new business value falls 23pc

China Life Insurance (2628) saw its new business value last year fall 23 percent to 44.78 billion yuan (HK$55 billion) , with a lower-than-expected net profit.

The country's largest life insurer posted a 1.3 rise in net profit in 2021 to 50.92 billion yuan from an earlier year.

Net premiums earned over the same period grew 1.1 percent to 611.25 billion yuan.

Source: Bloomberg

https://www.thestandard.com.hk/section- ... falls-23pc

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not vested

China Life Insurance (2628 HK/601628 CH): More time needed for transition [HOLD, TP HK$13.00/SELL, TP RMB11.41]

FY21 net profit missed mainly due to higher reserving pressure and lower investment income growth

VNB declined by 23.3% y-o-y, worse than expected, mainly dragged by weak new business sales, deteriorating product mix, and aggressive agent headcount cut

Agent headcount declined by 40% y-o-y to 820k agents; still expect for a mild decline in FY22F

Cut FY22/23F earnings by 11%/6% and lowered VNB growth assumption to -16%/+5%; TP lowered to HK$13; maintain HOLD

Source: DBS

[winston]

not vested

China Life Insurance (2628 HK / 601628 CH) - Agent headcount stabilises

With the increasing need for protection and wealth management of China’s rising middle class, China Life is one of the key beneficiaries of this medium-term growth trend as a leading domestic life insurer with ~15-20% estimated market share.

The regulatory shift towards more long-term and protection product mix is positive for future margins but the transition to the new business model and transformation process led by new management may be bumpy, amidst the current challenging operating environment hampered by concerns from volatile equity markets and impact on face-to-face sales recovery following the Covid-19 outbreak.

Dividend payout ratio as of end FY21 was 36%.

While we see value, we believe investors will need to be patient given the sector’s recovery outlook looks delayed as offline business takes time to normalize amid intensifying competition, recent resurgence of the pandemic and ongoing demand softness in China. BUY (2628 HK) / SELL (601628 CH).

Source: OCBC