Incident: The company disclosed its 2024 mid-year report. 2024H1 achieved operating income of 234.2 billion yuan (YoY +23.3%), net profit to mother of 38.3 billion yuan (YoY +10.6%), and earnings per share of 1.35 yuan (YoY +10.6%); NBV +18.6% YoY, inclusive value +11.4% compared to the beginning of the year.

The total premium reached a record high during the same period, and the business structure was optimized and quality improved. The company achieved premium income of 489.6 billion yuan (YoY +4.1%) in 2024H1, a record high. Among them, individual insurance premiums were +5.6% year-on-year, and the NBV for individual insurance in the first half of the year was 29.29 billion yuan (YoY +14.6%).

The banking insurance channel implemented the “integrated reporting and banking” policy, and banking insurance premiums were -19.9% compared to the same period. Benefiting from product restructuring and cost optimization, etc., the company's NBVM was effectively improved, which in turn led to NBV +18.6% year-on-year.

The scale of manpower has steadily rebounded, and the quality of the team continues to improve. By the end of 2024H1, the company's total sales manpower and personal insurance sales manpower were 0.685 million/ 0.629 million people respectively, and the size of the workforce gradually stabilized. 2024H1 The monthly first-year premium payment per capita was +12.4%. The company's individual insurance channels further promoted marketing system reform. The “Seed Plan” has been piloted in 24 cities. The team quality continues to improve, and team production capacity has achieved steady growth.

Benefiting from the rise in the equity dividend sector and the bond market, investment returns have been greatly boosted. By the end of 2024H1, the company's investment assets reached 6.09 trillion yuan, +12.5% over the end of the previous year. Affected by declining interest rates and the performance of individual equity market dividends, the 2024H1 fair value change profit and loss surged by 44.6 billion yuan year-on-year, and the company achieved a total investment income of 122.4 billion yuan (YoY +50.2%) and a net investment income of 92.4 billion yuan (YoY +1.8%); the total return on investment was 3.59% (YoY+0.25pct), and the net return on investment was 3.03% (YOY-0.70pct).

Investment advice: Maintain a Buy-A investment rating. We expect China Life Insurance's 2024-2026 EPS to be 1.86 yuan, 2.06 yuan, and 2.34 yuan (based on the new guidelines), giving 0.8 x 2024 p/EV, corresponding to a 6-month target price of 41.08 yuan.

Risk warning: Large fluctuations in the equity market, uncertainty about regulatory policies, continued decline in the number of agents, etc.