Bocom International has released a research report updating its profit forecast for CHINA LIFE (02628). The company's net profit attributable to shareholders in 2025 is projected to grow by 44.1% year-on-year, while its new business value is expected to increase by 35.7%. Despite underperformance in investment returns during the fourth quarter of 2025, the long-term operational trend remains intact. The firm forecasts that the new business value will rise to RMB 50 billion by 2026. The target price has been raised to HK$33, corresponding to a target P/EV ratio of 0.6 times for 2026, and the Buy rating is maintained.
Key points from Bocom International are as follows:
2025 Performance: The company recently reported its 2025 results, with operating revenue reaching RMB 615.678 billion, a year-on-year increase of 16.5%. Net profit attributable to shareholders amounted to RMB 154.078 billion, up 44.1% year-on-year, achieving high-quality growth on top of the 108.9% year-on-year increase in 2024. Benefiting from improved value contributions from channels such as individual agency and bancassurance, the full-year new business value reached RMB 45.75 billion, growing by 35.7% year-on-year. The company's total investment yield rose to 6.09%, an increase of 59 basis points year-on-year. Although investment losses from underperforming assets since the fourth quarter of 2025 had some impact on overall results, the effect is considered limited given the long-term nature of the life insurance business.
During the earnings presentation, management reaffirmed its commitment to accelerating the development of a world-class life insurance company with Chinese characteristics. They also noted that demographic changes and supportive policies for the insurance industry during the 15th Five-Year Plan period will create a "golden opportunity" for the company's growth over the next five years.
Updated Profit Outlook: The firm has revised its forecasts for 2026-2028, anticipating steady growth in the scale of the life insurance business over the next three years. With the accelerated rollout of new health and pension products, premium income is expected to maintain a year-on-year growth rate of over 5%. The new business value is projected to continue its strong growth on the high base of 2025, potentially reaching RMB 50 billion by 2026. Enhanced digital operations and risk control capabilities, along with ongoing cost reduction and efficiency improvements, are expected to sustain profitability at a favorable level once short-term investment disruptions subside. Overall, as a leading player in China's life insurance market, the company is well-positioned to maintain profit growth ahead of its peers and benefit early from the industry's medium-to-long-term profitability improvement and valuation recovery.
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