China Life 2628; ADR (LFC)

[winston]

I have already shortlisted my puts on China Life and am waiting for the right time to execute it.

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China Life Insurance to Increase Investment in Pension Unit

By Bei Hu

May 8 (Bloomberg) -- China Life Insurance Co., the nation's largest insurer, agreed to invest 1.85 billion yuan ($265 million) more cash into its pension unit, it said in a statement to the Hong Kong stock exchange.

The Beijing-based company will directly own 87.4 percent of the China Life Pension Insurance Co. after the increased investment, the statement said. It will pay for the investment with internal resources, it added.

The pension unit manages group, and individual pension and annuity businesses, and also sells short-term medical insurance, personal accident policies as well as re-insurance related to those policies, the statement said. It will use the new capital to set up branches and representative offices in Chinese towns and provinces.

The additional investment will bring China Life's stake held directly and indirectly through its asset management arm to 92 percent from 75 percent, the statement released late yesterday said.

Source: Bloomberg

[LenaHuat]

Hi Winston

I wonder if U know abt this HK soothsayer, Lum Chang who publishes his annual forecasts in a red-lettered (I mean the color spread) book. He specifically mentioned that ChinaLife would sparkle this year. Good to read abt your making $$ from this counter.
I've quitted all my positions in HK stocks and still hesistant abt parking $$ there.

[winston]

Hmm... how good is this Lum Chang ? Sometimes, must believe also. I've bought a Put on Ping An yesterday and am waiting for China Life.. take care, Winston

[LenaHuat]

Hi Winston
My HK relative has been tracking this soothsayer's predictions for many years and thinks highly of him. "2628" is oredi auspicious.

[winston]

BROKER CALL - China Life Insurance H-shares kept 'outperform' - Credit Suisse

HONG KONG (XFN-ASIA) - Credit Suisse reiterated an "outperform" call on China Life Insurance Co Ltd's Hong Kong-listed shares after the mainland insurer reported strong growth in premium income for the first four months of the year.

It raised its target price for the stock to 40 hkd from 34, with the new target applicable to the end of 2009.

China's top insurer announced yesterday that its premium income for the four months to April stood at 128.0 bln yuan, up 43.2 pct from a year earlier. In April alone, premium grew 68 pct.

"This is comfortably above the 19.5 pct growth we factored into our valuations," Credit Suisse said.

The Swiss house cited two key factors for the robust growth in China Life's premium income.

China's weak equity market has helped restore demand for 'safer' insurance products, it said, adding that the company also benefited from new product launches.

Continued strong premium growth should help further restore investor confidence in China Life following disappointing growth in new business last year, the brokerage said.

While product mix changes may see average margins contract, volume growth is compensating, it added.

China Life shares today fell 0.75 hkd or 2.26 pct to 32.50.

[winston]

Not vested.

JP Morgan recently lowered its target price on China Life to HK$29.60 from HK$31.10.

'The investment environment remains difficult and we expect the actual investment return to miss the company's (China Life) long-term assumption of 5.5 percent,' JP Morgan said in a report.

[winston]

China Life Insurance Group H1 premium income 195.46 bln yuan, up 46.81 pct

BEIJING (XFN-ASIA) - China Life Insurance Group, parent of China Life Insurance Co Ltd (SHA 601628; HK 2628), booked first half premium income of 195.46 bln yuan, up 46.81 pct
year-on-year, the official Xinhua news agency reported, citing data from the group.

Premium income from the life insurance business stood at 193 bln yuan, while premium income from property insurance was 2.46 bln.

At the end of June, the company had assets of 1.205 trln yuan, accounting for about 40 pct of the industry's total, Xinhua added.

Late yesterday, listed China Life Insurance Co Ltd, in which China Life Group holds a 68.37 pct stake, announced first half premium income of 182.1 bln yuan, up 50 pct from a year earlier.

[winston]

Strong growth in premiums may not offset weak equities
Katherine Ng
Friday, July 18, 2008

Shares of China Life (2628) jumped 4percent to close at HK$28.05 yesterday, a day after the mainland's largest insurer and institutional investor reported its first-half premiums soared more than 50 percent over the previous year to 182 billion yuan (HK$208 billion).

Meanwhile, its rival Ping An Insurance (2318) saw its stock climb 3.11 percent to HK$49.80.

However, analysts said while strong growth in premiums might boost Chinese insurers' share prices, it probably won't be enough to offset the lower returns on investment income.

"We don't think the high premium growth can fully offset the impact of lower returns from equity investments," a Julius Baer analyst said yesterday.

Ivan Li, an investment analyst at Kim Eng, expects China Life's 2008 net profit to decline by 10 percent year-on-year, while he sees Ping An's full-year net earnings falling 20 percent due to weakened market conditions.

But Credit Suisse analyst Chris Esson maintained an "outperform" rating for China Life, noting that a weak equity market environment has restored demand for "safer" insurance products.

Ping An chief executive Cheung Chi-yan said despite the company's investment in Fortis Group showing a decline in value recently, it plans to hold on to the 5 percent stake for the long term.

[winston]

Not vested.

China Life more assured after surge in premiums
Benjamin Scent
Monday, July 21, 2008

Investors may want to take another look at China Life (2628), which has taken a beating in the midst of the depressing A-share market performance.

Shares in the company, now trading at HK$28.05, have fallen 46 percent from their peak of HK$52 at the end of October. However, analysts are starting to say the mainland insurer has fallen too far, and recent news points toward better things ahead.

In the past, investors looked only at the performance of the A-share market to judge the health of China Life, where investment income makes up about a quarter of total revenue. However, with no good news coming from that area this year, the focus has started to shift back to China Life's core business, which is showing impressive trends.

These fundamentals were ignored before when China Life was buoyed by the euphoria of the A-share bull market, but investors would do well to give them a look now.

China Life's insurance premiums surged 61 percent in June, traditionally a seasonally weak month.

"This upswing in premium growth represents a sharp turnaround from the weak 2007 and should therefore further improve investor perceptions of their growth prospects," Credit Suisse analyst Christopher Esson said.

Premium growth is expected to remain "exceptionally strong" for the rest of the year, given the company's high rural exposure and growing demand after the Sichuan earthquake, CLSA wrote.

Good news could also come on the investment front.

Some commentators are starting to say the A-share market has bottomed out, so there may be some recovery for China Life on its equity investments. Holding its shares could be a safer bet than other financials.

Unlike the largest mainland lenders, it does not hold any debt issued by Fannie Mae or Freddie Mac, and it does not need to worry about any government austerity measures clamping down on lending growth.

Credit Suisse and CLSA currently have "buy" ratings on China Life.

The stock has 25 percent upside from current levels, based on Credit Suisse's HK$35 target price.

[winston]

Not vested.

China Life profit falls on weak stock market
By Kennix Chim

HONG KONG, Aug 25 (Reuters) - China Life Insurance Co (2628.HK: Quote, Profile, Research, Stock Buzz) (LFC.N: Quote, Profile, Research, Stock Buzz), the country's top life insurer, posted a 32 percent fall in first-half profit on Monday, as a drop in China's equity market hurt the company's investment income, but the result beat forecasts.

After huge profits in 2007, Chinese insurers are battling with slower earnings growth this year. Investment income is falling along with Chinese stocks, competition is intensifying, and claims in the first half rose on heavy snowstorms and the devastating Sichuan province earthquake.

China Life (601628.SS: Quote, Profile, Research, Stock Buzz), which leads rival Ping An Insurance (Group) Co (2318.HK: Quote, Profile, Research, Stock Buzz) (601318.SS: Quote, Profile, Research, Stock Buzz) in the mainland market, said it earned 15.8 billion yuan ($2.3 billion) in the first half, compared with 23.3 billion yuan in the year-ago period.

By comparison, Ping An's first-half profit fell 2 percent to 9.49 billion yuan, as growth in premiums was offset by a drop in investment income.

On average, four analysts polled by Reuters were expecting China Life's first-half profits to total 11.7 billion yuan.

China Life's first-half investment performance was better than the market had expected, probably because of dividend returns on mutual fund investments, said Ben Lin, an analyst at Nomura.

Shanghai's stock market .SSEC, on which China Life depends for a sizeable portion of its investment income, lost 48 percent in the first half of the year amid a global market selloff and China's tightening efforts to cool inflation.

Due to increasing fixed-income investment assets, China Life reported 25.3 billion yuan in net investment income in the first half of 2008, up 5 percent from the same period last year, but its net realised gains on financial assets dropped 67 percent to 742 million yuan.

The insurer booked 6.5 billion yuan in losses from changes in fair value resulting from the continued capital markets downturn, while it had a 10.8 billion gain a year earlier.

Its net investment yield inched down to 2.99 percent in the first half from 3.36 percent a year earlier.

Due to the fluctuations in the capital markets, China Life increased its debt securities and time deposits to 79.5 percent of total investment assets at the end of June, from 72 percent at the end of December, while equity investments decreased to 13.3 percent from 23 percent.

China's life insurance market, dominated by China Life and Ping An, has grown dramatically amid the country's run of double-digi economic growth.

China Life's gross written premiums and policy fees rose 24 percent to 79 billion yuan in the first half of 2008.

Analysts expect the entry of new players, including banks with vast distribution networks, will further intensify competition in the bancassurance area.

Nomura's Lin said bancassurance now contributes about half of China Life's new premiums. However, such business generates relatively low margins amd is not expected to boost China Life's bottom line significantly.

China Life's Shanghai-listed A shares have dropped 56 percent so far this year while its Hong Kong shares are down 31 percent, compared with a 24 percent decrease in the benchmark Hang Seng Index .HSI during the same period.