China Life Insurance (601628) Quarterly Comment: Investment-side Performance Improves Structure and Boosts Value

China Life Insurance (601628) Quarterly Comment: Investment-side Performance Improves Structure and Boosts Value

The recovery of equity investment has greatly boosted performance, and the strategy of “reinvigorating China Life” has steadily advanced the company’s net profit attributable to its parent in the first quarter of 2019, which was 26 billion yuan, a year-on-year increase of 92%.

The growth of performance was mainly attributable to the rapid improvement in equity investment income driven by the rebound in the capital market.

Premium income was 272.4 billion, a year-on-year increase of +11.

9%, the market outlook remains ahead.

The company’s “Rejuvenation of China Life” strategy has a clear strategic deployment, and the coordinated development of value and scale promotes the company to gradually develop a new journey.

EPS are expected to be 0 in 2019-21.

67 yuan, 0.

97 yuan and 1.

32 yuan, maintain “Buy” rating.

Significant optimization of the premium structure and the significant increase in NBV brought by the increase in the value rate. With the change in sales strategy, new orders achieved significant growth, with the first-year delivery of 66.8 billion yuan and YoY + 9.

1%, mainly for the vigorous promotion of the starter product Xinxiang Jinsheng.

The first-year delivery accounted for 98 in new long-term insurance orders.

97%, a year-on-year increase of +12.

At 23pct, 杭州桑拿网 the scale of inter-bank trade continued to shrink, and the premium structure optimization effect was remarkable.

The renewal premium is 1784 trillion, YoY + 13.

5%, the proportion of total premiums increased slightly by 1pc to 65 per year.


The surrender rate dropped sharply3.

34pct to 0.

62%, business quality continued to improve.

NBV increased significantly by 28 in the first quarter.

3%, exceeding market expectations. We believe that with the 9% increase in new orders, NBV can still achieve rapid growth, mainly due to the significant increase in the value ratio under the vigorous promotion of the late opening insurance.

The company’s value rate is at a low level among listed insurers, and there is room for improvement.

19Q1 last insurance agent 153.

70,000, an increase of 9 from the beginning 南宁桑拿 of the year.

The number of employees, cost incentives and the recovery of new orders have alleviated the gap between the increase in personnel to a certain extent, and the quality has improved significantly. The monthly effective manpower and the average monthly manpower for selling certain guaranteed products have increased.

9% and 59.


Bank insurance channel sales team 27.

60,000, an increase of 3 earlier.

10,000 people, insurance planner monthly average long-term insurance performance manpower increased by 58 each year.

7%, multi-channel production capacity to jointly promote business development.

The overall return on investment returns, and the positive effect is expected to gradually achieve a quarterly growth of CSI 300 and SSE 50 by 29% and 25%, respectively. The blue-chip allocation of insurance fund income has increased significantly. The company’s total investment income is 52.9 billion, a year-on-year increase of + 92%, The main contribution to profit growth.

Annualized total investment yield 6.

71%, a year-on-year increase of +2.

79 points, alleviating the improvement of the market’s expected risk of potential spread loss; the net investment rate of return fluctuated slightly.

05pct to 4.

31%.Provision for asset impairment 20.

3 ppm, which is substantially higher than 5 in the same period last year.

10,000 yuan, consolidating the foundation for performance growth.

Against the background of a positive investment market trend, investment returns will distort the negative bias situation (the difference in investment returns in 2018 has a static effect on the beginning of EV-6).

1%), the positive effect is expected to gradually appear.

The rise in long-term interest rates is positive for life insurance companies, pushing up the valuation hub, and maintaining the “Buy” rating. The long-term interest rates continue to rise, and pure life insurance companies have benefited significantly. Including the equity market and NBV ‘s unexpected performance, it is expected to catalyze the market under three-dimensional driving.

According to the latest earnings adjustment earnings forecast, it is estimated that the EVPS in 2019-21 is 32.

56 yuan, 37.

61 yuan and 43.

41 yuan (previous value was 32.

49 yuan, 37.

63 yuan and 43.

63 yuan).

Corresponding P / EV is 0.

91x, 0.

78x and 0.


Comparable companies estimate an average of 0.

99x, the interest rate upward thrust is estimated to move upward, and we give January 2019.


2xP / EV, target price range 35.


07 yuan, maintain “Buy” rating.

Risk reminder: The advancement of the insurance business is weaker than expected, and the downward interest rate brings potential risk of spread damage. The fluctuation of the equity market leads to the uncertainty of investment income growth.