occurrences

China Life released its 2024 semi-annual report. 2024H1 achieved NBV of 32.262 billion yuan, an increase of 18.6% year on year; net profit to mother was 38.278 billion yuan, up 10.6% year on year, and 5.9% year on year under the same caliber.

Life insurance NBV maintained double-digit growth, and the number of agents rebounded steadily 1) 2024H1 achieved an NBV of 32.262 billion yuan, +18.6% year-on-year (+26.3% in 24Q1). The company's NBV maintained double-digit growth, mainly due to an increase in the value rate of new businesses. 2024H1's NBV margin was 20.1%, +4.2PCT year over year; the premium for the new order was 160.266 billion yuan, -6.4% year over year. By channel, 2024H1's individual insurance channels achieved NBV of 29.291 billion yuan, or +14.6% over the same period last year. 2) As of 2024H1, the number of company agents was 0.629 million, an increase of 0.007 million over 2024Q1, and the number of agents has rebounded steadily. Judging from the agent situation, the company's agent production capacity has been steadily increasing, and the monthly first-year premium payment per person for 2024H1 was +12.4% compared to the same period last year.

3) As of 2024H1, the company's EV was 1.4 trillion yuan, +11.4% compared to the beginning of the year, mainly due to positive contributions from market value and other adjustments, expected return on embedded value, new business value, and differences in return on investment.

Net profit improved significantly, with net profit doubling year-on-year in Q2 1) 2024H1 achieved net profit of 38.278 billion yuan, +10.6% YoY, and +5.9% YoY under the same caliber (-24.5%/+100.3% for 24Q1/24Q2, respectively). The company's net profit improved significantly year-on-year, mainly due to the year-on-year increase in investment income. 2024H1's total investment income was +33.9% YoY to $122.366 billion. 2) 2024H1 Company's annualized net/total return on investment was 3.03%/3.59%, respectively, and -0.28/+0.26PCT, respectively. Among them, the return on net investment declined slightly year on year, which is expected to be mainly affected by the decline in interest rates; the overall return on investment is expected to increase year on year, mainly due to the year-on-year improvement in the equity market and the company's active deployment of high-dividend assets.

Profit Forecasts and Ratings

We expect the company's net profit to be 59.9/68.8/80.1 billion in 2024-2026, with corresponding growth rates of 30%/15%/17%, respectively. We maintain a “buy” rating given the company's greater soundness on the debt side and greater flexibility on the asset side.

Risk warning: Economic recovery falls short of expectations, capital market volatility intensifies, and customer demand is slowing down.