China Life Insurance (601628): NBV grows faster than its peers, changes worthy of respect

China Life Insurance 合肥夜网 (601628): NBV grows faster than its peers, changes worthy of respect

Key Investment Events: The company’s revenue for the first three quarters was 6,240.

24 ppm, +15 throughout the year.

35%, net profit attributable to mother is 577.

02% yuan, +190 throughout the year.

41%; Q3 revenue was 1667.

91 ppm, +24 throughout the year.

66%, +15.

02%, net profit attributable to mother 201.

30,000 yuan, +483 throughout the year.

37%, +73.

83%.

The major boost of the company’s performance is mainly the income side: significant growth in investment income (every + 76% in the first three quarters), and the expenditure side: the actual tax rate of -13bp brought by the preferential fee for commissions and commissions, surrender and compensationExpenditure -43%.

In addition, the 750-day average Q3 upward 3bp pressure on the provision of reserves slowed down and released profits.

NBV + 20.

More than 4% higher than peers: Since China Life’s transformation, NBV has achieved +20 under pressure from the industry (less than 5% for Ping An and CPIC and Xinhua with negative growth).

The increase of 4% was mainly due to the increase in the scale of individual insurance agents (seasonal growth, Q1 / Q2 / Q3 were 153 at the end.

7/157.

3/166.

30,000 people) and continuous optimization and adjustment of product structure to increase the new business value rate.

The growth in the size of agents is qualitative and qualitative, and the effective sales manpower for each insurance month is +37.

4%, monthly average sales manpower scale of guaranteed products +49.

2%.

In addition, the income of agents continued to improve. Roughly calculated per capita income increased by about 22%, reflecting the continued stability of the size of agents, which is conducive to the improvement of new orders.

Transition period: The company has made steady progress in the direction of long-term + periodical payment + protection. The first year of premium payment accounts for 98% of new long-term insurance bills.

07%, +8 throughout the year.

45pct, annual payment over ten years accounted for 51 in the first year.

06%, +15 throughout the year.

72 points.

The improvement in product structure also brings optimization in business operations, and the surrender rate is further reduced.

78 points to 1.

67%.

Investment income boosted the company’s performance: the capital market recovered (mainly the equity market rose), and the company’s total investment yield in the first three quarters was 5.

72%, previously + 231bp, with a net investment return of 4.

83%, one year + 21bp; total investment scale continues to expand, + 11% to 3 compared with the end of last year.

44 trillion.

Investment suggestion: We are optimistic about China Life’s road of value transformation.

The improvement of NBVM is still the most anticipated among listed insurers, and the growth of overlapping new orders is expected to be NBV + 15%, which is much higher than the industry.

Currently corresponding to less than 1xP / EV in 2019, maintain the buy-B recommendation. Risk warning: less than expected transformation, downturn in equity markets, lower long-term interest rates, agent substitution, regulatory changes