Damo: Maintaining China Life Insurance's (02628) “Gain” Rating; New Business Value Continues to Outperform Peers

The Zhitong Finance App learned that Morgan Stanley released a research report saying that China Life Insurance (02628) expects net profit of 128.9 billion yuan to 137.1 billion yuan in the first half of the year, an increase of 215% to 235% year-on-year, and an annualized return on shareholders' equity of about 40%, leading the industry; this means that net profit for the second quarter reached 109.4 billion yuan to 117.6 billion yuan, an increase of about 800% to 900% year on year. Damo maintains China Life Insurance's H share “increase” rating, with a target price of HK$38.9. It believes that the H share valuation is still attractive, and the fundamentals are improving.

The bank believes that a more aggressive growth-oriented allocation and technology stocks outperformed the market in the second quarter, driving China Life Insurance's strong investment performance in the first half of the year, and predicts that China Life Insurance's new business value will increase by more than 30% in the first half of the year, continuing to outperform its peers. Despite the general slowdown in insurance sales in the second quarter, it still believes that China Life's mid-term results will perform well.