China Life (601628): Double-ended improvement in performance, high growth and continuous reform

China Life (601628): Double-ended improvement in performance, high growth and continuous reform

Incident China Life issued a report for the third quarter of 2019. The company achieved 4,970 premium income in the first three quarters.

470,000 yuan, an increase of 6 in ten years.

1%; first year premium is 990.

53 ppm, an increase of 4 per year.

7%; renewal premiums reached 3348.

3.2 billion, an annual increase of 5.

9%; short-term insurance premium income 612.

15 ppm, an increase of 31% per year; the value of new business is up to 20 per year.

4%; total investment income in the third quarter was 1344.

870,000 yuan, the total return on investment reached 5.

72%, net investment yield 4.


The company achieved net profit of 577.

$ 19 billion.

4%, the basic profit income is 2.

03 yuan / share; expected average net asset income increased by 11.

14%, an increase of 6 per year.

03 averages.

Brief comment: NBV maintains a high growth rate of 20%. The business structure will continue to be optimized. Benefiting from the adverse growth of new single premiums and the improvement of NBVM brought by the improvement of business structure, the value of new business in the first three quarters of China Life increased by 20.

4%, although the growth rate was slightly narrower than the previous two quarters, but maintaining a level of 20% still slightly exceeded market expectations, and the penetration level was ahead of its peers.

In the first three quarters, the company achieved 4,970 premium income.

4.7 billion, an annual increase of 6.

1%, the first year premium is 990.

53 ppm, an increase of 4 per year.

7%; renewal premiums amount to 3,348.

32 ppm, a five-year increase of 5.


Under the guidance of the strategy of “Reinvigorating China Life”, China Life focuses on value enhancement and steadily promotes the development of protection products and long-term business. The first-year premiums paid for ten years or more accounted for the first-year premiums.51.

06%, an annual increase of 15.


The proportion of premiums for specific protection products in the first year’s premiums surpassed the increase8.


The current product structure is still dominated by long-term savings, but protection products will continue to upgrade, with excessive product reserves, and business structure will be further optimized.

The number of agents has increased rapidly, and multiple methods have been used to promote quality improvement. By the third quarter of 2019, the total sales force of the company was approximately 1.95 million, an increase of approximately 180,000 from the end of 2018, which has exceeded the initial increase target.

Among them, the number of individual insurance channel teams reached 166.

30,000 people, an increase of 15 from the end of 2018.


One insurance reform is one of the key tasks of the company’s “Dingxin Project”. The marketing, collection, planning, and operation departments are separated into separate departments to make the management lines clearer.Under the vigorous reform, the quality of the army continued to improve, and the effective sales manpower of individual insurance channels increased every month.

4%, the average monthly manpower sales of specific protection products expanded and increased49.


At the same time, the company raises the standard in agent recruitment, strengthens newcomer training and strengthens practical skills, improves standard incentives in the assessment system, and gives the sales team more support means, thereby promoting the improvement of agent quality.

The investment management system is gradually market-oriented, and the yield has increased significantly. By the end of the third quarter of 2019, the company’s total investment assets were 34,391.

1.5 billion, an increase of 10 from the end of 2018.

7%, achieving a total investment income of 1344.

87 trillion US dollars, the total investment yield increased to 2.

3 points

To 5.

72%; net investment income is 1139.

30,000 yuan, net investment income increased by 4.

83%, increasing by 0 every year.

21 points.

Since this year, China Life has continued to deepen the market-oriented reform of the investment management system. At present, it has completed the adjustment of the structure. The Investment Management Center has six core teams. After that, it will establish a market-oriented rank sequence and assessment and incentive mechanism to extend the assessment period., Adhere to the “long-term investment, value investment, stable investment” concept.

The company has also significantly strengthened its asset and liability management, effectively responded to interest rate trends and market supply, and seized effective allocation documents to increase the allocation of long-term and ultra-long-term government bonds, high-quality non-standard assets, and high dividend stocks.Under the environment of falling interest rates, investment income has maintained a steady improvement.

Net profit increased by 190%, and it may gradually increase the company’s net profit attributable to mother 577 in the first three quarters.

$ 19 billion.

4%, the first is a ten-year high growth in investment income.

5%, and the second is the impact of adjustments to pre-tax budget policies on program fees and commission expenses, and the factor of one-time redemption of discounts in 2018, with commissions and commission expenses exceeding $ 9.5 billion.

In the fourth quarter, considering the cost expenditure and expense settlement, the expected profit growth rate will be slightly biased.

Investment suggestion The company’s performance in the first three quarters of 2019 has continued to grow, and the growth rate of new business value has maintained a high level. Under the strategic transformation of “Reinvigorating China Life”, the insurance business and investment business are in a good position to enhance value and 北京桑拿洗浴保健 create revenue.

The company currently corresponds to a P / EV of 0.

9 times, we think the reasonable estimate is 35.

57 yuan, given a “buy” rating.

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