Incident: China Life released its 2024 three-quarter report. During the reporting period, the company achieved operating income of 427.18 billion yuan, +54.8% year-on-year under comparable measures; realized net profit to mother of 104.523 billion yuan, or +173.9% year-on-year. Total premiums for the first three quarters of 2024 were $608.251 billion, +5.1% year-on-year. The weighted ROE was 19.95%, +9.08pct year over year. By the end of 24Q3, the company's investment assets reached 6.36 trillion yuan, +12.3% compared to the end of the previous year.

Premium income has been growing steadily, and NBV has maintained high growth. During the reporting period, the company's renewal premiums and new policy premiums were 410.742 and 197.509 billion yuan respectively, +7.5% and +0.4% year-on-year respectively. First-year premiums were +6.8% to $113.184 billion, of which first-year premiums of ten years or more were +17.7% to $52.556 billion, accounting for 46.43% of first-year premiums, accounting for 46.43% of first-year premiums, accounting for +4.31pct year over year. On a comparable scale, the value of the company's new business was +25.10% year-on-year in the first three quarters of 24, maintaining rapid growth, and is expected to be supported on both sides of volume and price. The withdrawal rate was 0.74%, -0.14pct year on year, and the quality of operations continued to improve.

The quantity and quality of sales manpower has risen sharply, and the new marketing model is beginning to bear fruit. As of the end of 24Q3, the company's total sales force was 0.694 million people, +1.3% month-on-month; of these, personal insurance sales force was 0.641 million people, +1.9% month-on-month, and first-year premiums per person from each insurance channel were +17.7%. The company's sales system reform strategy continues to advance, the quantity and quality of sales force has risen sharply, the scale of manpower continues to grow, and team production capacity is rising at the same time.

The pilot of a new marketing model for individual insurance progressed rapidly, and the “Seed Program” was piloted in 24 cities including Nanjing and Shenzhen, with initial results.

Investment returns drive high profit growth. The company's net profit to mother during the reporting period was 104.523 billion yuan, +173.9% year-on-year, showing outstanding performance flexibility. In the first three quarters of 24, the company achieved a total investment income of 261.419 billion yuan, +152.4% year-on-year under the same caliber, and a total return on investment of 5.38%; a net investment income of 144.712 billion yuan, +3.9% year-on-year under the same caliber, and a net return on investment of 3.26%. The recovery in the equity market has led to a high increase in total investment income, supporting the company's high performance flexibility.

Investment advice: China Life Insurance continues to make steady progress in high-quality development, profoundly implement the “three persistence”, “three improvements” and “three breakthroughs”, continue to enhance its comprehensive strength, and give full play to the role of head geese. In 2024-2026, revenue is expected to be +42.41%/2.38%/6.88%, net profit to mother +149.34%/+1.20%/+7.36%, EPS is 4.07/4.12/4.43 yuan/share, and PE corresponding to the closing price on November 19 is 10.88/10.75/10.01 times. Maintain a “buy” rating.

Risk warning: equity market fluctuates sharply, interest rates continue to decline, business transformation falls short of expectations