China Life 2628; ADR (LFC)

[winston]

China not growth market for life insurance ? LOL

And wait till there's a serious correction on the A share market

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* China Life Insurance (601628.SS) sank 2.0 percent to 28.38 yuan in Shanghai after saying it booked 191.1 billion yuan in insurance premiums in the first seven months of the year, down 5.8 percent from a year earlier.

[winston]

Equity sales in rosy market boost China Life first half by Katherine Ng, The Standard HK

China Life (2628) - the mainland's largest insurer - said first-half earnings rose 15.4 percent thanks to higher investment returns on the back of a rosy stock market.

The Beijing-based insurer posted an interim net profit of 18.22 billion yuan (HK$20.66 billion), compared with 15.8 billion yuan a year ago. The results missed the market consensus of 20 billion yuan.

No interim dividend was declared.

Chairman Yang Chao said China Life had actively responded to capital market changes and adjusted its investment portfolio on a timely basis so it could ride the market rally. It reduced the proportion of fixed-income investment and increased equity investment, further optimizing the investment asset allocation, Yang said in a statement to the Hong Kong stock exchange.

At the end of June, China Life cut its debt securities to 51.49 percent from 61.43 percent a year ago, while equity investment at 13.43 percent improved significantly from 8.01 percent.

( Wonder whether they managed to get oit before the 20% drop ? )

Yang said the successful bidding for stakes in China Construction Bank (0939) and Bank of China (3988) led to satisfactory investment returns.

The banks' shares and the insurer's portfolio adjustments boosted the gross investment yield by 96 basis points to 3.27 percent.

( Wonder how much they are using in their pricing ? )

Net investment income in the first six months was down 25.18 percent to 18.9 billion yuan, but total investment income rose 64.66 percent to 32.19 billion yuan if net realized gains on assets sold and fair value gains were counted.

The firm made a profit of 11.88 billion yuan from equity sales - 15 times the 742 million yuan it made in the first half of 2008. At the same time, net fair value gains for holding assets were 1.375 billion yuan, compared with last year's loss of 6.49 billion yuan.

Meanwhile, China Life's gross written premiums and policy fees were up 10.82 percent to 87.863 billion yuan, with embedded value reaching 267.3 billion yuan, 11.34 percent higher than at the end of 2008, maintaining its leading position with about 39.2 percent market share.

[winston]

China Life bullish on buying chunk of policy bank ; Source: The Standard HK

China Life Insurance, the world's biggest life insurer by market value, said it is very hopeful it will acquire a stake in China Development Bank Corp, which funds the nation's infrastructure projects.

Talks are almost complete, and terms are very favorable to China Life, the insurer's chairman, Yang Chao, said yesterday in Wuyishan, Fujian province. The size of the stake is pending regulatory approvals, Yang said.

He is seeking long-term investments in unlisted companies to match the insurer's growing long-term liabilities from sales of policies. China Life, which boosted profit by 15 percent in the first half of the year, also has expressed an interest to buy stakes in banks to gain a distribution network for its policies as it defends market share of more than 40 percent.

The Beijing-based insurer is expanding its investment team to study long-term opportunities in the nation's financial institutions and other big unlisted state-owned firms, Yang said.

China Life is interested in buying a stake in Agricultural Bank of China, vice president Liu Jiade said last month.

"I'm even more interested in Development Bank than Agricultural Bank," Yang said. "Their asset quality is very good, and the return is high." BLOOMBERG

http://www.thestandard.com.hk/news_deta ... 90910&fc=7

[winston]

Not vested. I'm not as positive as this guy ..

DJ MARKET TALK: China Life +1.0%;Premium Growth Turning Corner-CS

1021 [Dow Jones] China Life Insurance (2628.HK) +1.0% at HK$35.95, despite reporting premium income for first 9 months slips 4.5% on-year to CNY237.3 billion. Still, figure shows September premium +13.4% on-year at CNY26.6 billion, "finally turning the corner," says Credit Suisse.

Says it appears business mix restructuring that has held back headline growth for most of 2009 "has almost worked its way through the system;" given rebasing effect, expects premium growth to remain positive from here.

House keeps Outperform call on China Life, target price unchanged at HK$40.00.

Source: Dow Jones Newswire

[winston]

Didn't all the analysts were telling you that everyone is lining up to buy insurance in China ? LOL

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Insurer doubles profit but fails to impress by Katherine Ng, The Standard HK

China Life Insurance (2628) said third-quarter profit more than doubled to 5.95 billion yuan (HK$6.75 billion) from a year earlier as the equity market recovery boosted its investment returns.

But the result of the mainland's largest insurer was lower than analysts' expectations of 7.49 billion yuan and down from 8.53 billion yuan in the second quarter.

Net profit for the first nine months was 19.9 billion yuan, up 51.9 percent from 13.1 billion yuan a year ago.

The rally in capital markets contributed to the robust results as investment returns for the three months increased to 15.6 billion yuan, compared to 11.1 billion yuan a year earlier, chairman Yang Chao said yesterday.

Since the beginning of the year, China Life's investment income rose 8.8 percent to 49.3 billion yuan from a year ago. This was due to fair-value gains returning to positive territory - 1.18 billion yuan compared with last year's 8 billion yuan fair- value losses.

At the same time, the insurer's equities holdings as of June 30 stood at 13.4 percent, up from 8 percent at the end of last year.

Foreign-exchange losses were sharply reduced to 27 million yuan from 1 billion yuan in the same period last year.

Although the Shanghai Composite Index shed 6.1 percent in the third quarter, it rose more than 21 percent up to the end of September.

Shares of China Life have risen 60 percent so far this year, reaching a 52-week high of HK$37.90 on Friday.

Premium income - its core business - during the first nine months was up 4.7 percent to 237.26 billion yuan from a year ago.

Huatai Securities analyst Liu Peng told Bloomberg Yang's efforts to shift from lower- margin single-premium products to long-term, regular-premium policies was paying off and bolstering underwriting profits. Net premium income fell to 63.1 billion yuan in the third quarter, China Life said, compared to 65.7 billion yuan in the same period a year ago.

http://www.thestandard.com.hk/news_deta ... 91027&fc=2

[winston]

For life insurance companies, there's such a thing called Asset Liability Matching, where risk is kept to a minimum and you make on the spread between what is priced, say 4% and what you make, say 6%.

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DJ MARKET TALK:China Life May Outperform;3Q Results Strong -Delta

0858 [Dow Jones] China Life (2628.HK) may fall, but may fare better vs broader market if based on its ADRs (down 1.0% vs local close at equivalent of HK$37.39).

China Life says its 3Q09 net profit more than doubled to CNY5.95 billion from CNY2.34 billion in 3Q08, as gains in value of its securities holdings more than offset fall in premium income. 9M09 net profit +51.6% at CNY19.87 billion.

Conita Hung at Delta Asia tips stock may fall on profit-taking, after ending +5.7% at HK$37.75 Friday. "China Life has reported a strong set of third quarter results, but I think its fourth quarter results will be even stronger, as investment outlook in equity market remains strong so far since the start of the fourth quarter," she says.

Source: Dow Jones Newswire

[winston]

A lot of words. Just focus on the -3% drop in premiums !

DJ MARKET TALK:Nomura Ups China Life Profit Forecast On Strong 3Q

1123 [Dow Jones] STOCK CALL: Nomura raises China Life (2628.HK) 2009 net profit forecast 10% to CNY30.33 billion as 3Q results beat expectations; company's 3Q net profit more than doubles on-year to CNY5.95 billion on Chinese accounting rules, as investment gains, lower surrender payment, claim payouts, more than offset 3.1% drop in premium income.

Tips near-term catalysts from possible deregulation on investment channels, news flow on investment opportunities, relatively low nationwide penetration of life insurance in China. Keeps Buy, target stays at HK$45.00 based on new business multiple of 35X;

Source: Dow Jones Newswire

[winston]

Not vested.

DJ MARKET TALK: China Life +1.6%; BOA-ML Keeps As Top Sector Pick

1454 [Dow Jones] China Life (2628.HK) +1.6% at HK$38.35, off early high of HK$38.65, outperforming vs HSI's 1.7% fall, after strong quarterly results. Bank of America-Merrill Lynch notes China Life's 3Q09 and 9M09 net profit show strong on-year growth of 154.6%, 51.6%, respectively, due to low base year-earlier.

Notes 9M09 results inline with house's expectations and expects premium growth momentum to pick up in 4Q09. Remains confident China Life can achieve house's FY09 net profit growth target of 42% under HK GAAP and VNB growth of around 27%.

On back of improved premium growth outlook and potential margins enhancement, house keeps stock at Buy, target at HK$38.47. "China Life remains our top pick in the Chinese insurance sector."

( Premium Growth ? Margins Enhancement ? )

Source: Dow Jones Newswire

[winston]

Not vested. From Phillips:-

Risk
Domestic stock market subjects to large fluctuation in 2009Q4, leads investment return to decrease sharply, and affects the Group's profitability.

( Do you buy a Life Company for it's investment return ? A Life Company is not an Investment bank and you should not buy it for it's trading profits. A Life Company matches it's Liabilities to various Assets and make on the spread ).


Valuation
In all, China Life's business remains stable and the profitability improves continually. We estimate that the value for life insurance of China Life is about HK$22, coupling with the valuations for property insurance, brokerage and other aspects, we give China Life's 12-month target price at HK$44.50, 22% higher than its last closing price, equivalent to 29x P/E and 3.8x P/EV in 2010 respectively. Maintain “buy” rating.

[winston]

Not vested. You understand this analysis ? LOVL

DJ MARKET TALK: China Life +1.0%; November Premium "Solid" - CS

1022 [Dow Jones] China Life (2628.HK) +1.0% at HK$39.30, outperforming broader market, as premium income trend continues to improve. While January-November premium income down 2.3% on year at CNY274.4 billion, November premium +23% at CNY19.7 billion, which "a solid performance", according to Credit Suisse; says China Life trading at 2.5X P/EV, 23X VNB (value of new business) attractive, given structural growth opportunity in China, supportive macro, regulatory conditions.

Keeps Outperform rating, HK$46.00 target price; "we view any strategic investments as a potential catalyst." Stock most heavily traded with HK$303.3 million.

Source: Dow Jones Newswire