20230825-招银国际-中国人寿-02628.HK-Outpaced_VNB_growth_in_1H23__short-term_NP_pushback_not_affect_value_growth_7页_1mb

Summary of China Life (2628 HK) - 1H23 Performance and Analyst View

• Key Highlights:

  • VNB Growth: Strong Value-Added New Business (VNB) increased by +19.9% YoY in 1H23, exceeding market expectations and driven by a value-focused product strategy in traditional life and annuities.
  • Profit Performance: Net profit declined by 8.0% in 1H23 compared to +17.8% in 1Q23, primarily due to investment losses from a bumpy equity market in Q2, with an impairment loss of RMB12.84bn.
  • Analyst Recommendation: Maintain "BUY" rating with a target price of HK$17.81 (up 56.2% from current HK$11.40), as the profit pushback is seen as short-term and the balanced product mix is expected to drive long-term value growth.

• Valuation and Metrics:

  • Trading at 0.22x FY23E P/EV and 0.6x FY23E P/B, with a 9.1% valuation percentile in 5-year history.
  • A balanced product split (endowment:47%, whole-life:37%, annuities:17%) is poised to enhance market share and support long-term growth.

• Additional Notes:

  • The insurer has reduced property-related exposure, with stock holdings under 0.4% of total assets.
  • Solvency ratios improved under IFRS 9 and 17, and investment strategies aim to shorten the asset-liability duration gap.