China Life Insurance (601628) 2018 Annual Report Review: Assets and Debt Endured Pressure on Current Performance and Value Growth Decline

China Life Insurance (601628) 2018 Annual Report Review: Assets and Debt Endured Pressure on Current Performance and Value Growth Decline

Matters: China Life released its 2018 annual report: net profit attributable to mothers was 11.4 billion, with a digit of -64.

7%; one-year new business value is 495 trillion, one year -17.

6%; net assets attributable to mothers were 3183 ppm, an earlier increase of -0.

8%; the embedded value is 7950 ppm, an earlier increase of 8.

3%; the remaining marginal surplus was 684 billion yuan, an increase of 12 from the beginning of the year.

5%; total / net investment income increased by 3.

29% / 4.

64%, down by 1 every year.


28pct; 0 on average.

16 yuan / share, at least -60%.

Comment: Proactively compress banking and insurance transactions, and optimize channel and payment structure.

China Life achieved a premium income of 53.58 million yuan in 2018, +4 in ten years.

7%, of which renewal premium growth rate is two years.

6%, the new single premium growth rate was -23.

At 5%, the potential negative growth slowed down the overall growth rate.

The first is for the company to actively adjust its business structure, reduce the banking and insurance transactions, and convert value growth.

In 2018, the overall premium growth rate of the agent channel was 15%, and the growth rate of the premium of the bancassurance channel showed a negative growth of -32%.

From the perspective of new long-term insurance orders, the quarterly negative growth of the bancassurance channel reached -60.

5%, the agent channel has a negative growth for ten years.


The active transformation effect is significant: the payment period structure in 2018 has been significantly optimized, and the proportion of new transactions in new orders 杭州夜网 has decreased sharply, and the proportion of periodical payments has increased by 26pct to 90%; the proportion of bancassurance channels in total premiums has decreased by 8pct to 14%, and the agent channelUp 7pct to 76%.

NBV also experienced overlapping negative growth as new businesses decreased, and the decline in the value ratio of individual insurance channels was part of the reason.

China Life achieved new business value of 49.5 billion in 2018, a year-17.

6%, which is 6pct narrower than earlier.

Product new business value accumulated in 201828.

9%, up 2 every year.


One of the insurance channels can reduce the value of new business42.

2%, a year-on-year decline of 5pct; the new business value of the bancassurance channel resets 18.

7%, an increase of 10 per year.

7 points.

The 天津夜网 floating loss was realized, the expansion of the bid-ask spread was widened, and the investment side caused a big shock.

China Life’s 2018 Total / Net Investment Return3.

29% / 4.

64%, down by 1 every year.


28 points, comprehensive investment income 3.1%, falling by 1 every year.

47 points.

The decline in total investment yield and comprehensive investment yield has been mainly affected by changes in equity markets.

In 2018, the investment asset bid-offer spread lost 215 ppm, a three-fold increase from the previous.

Losses from changes in fair value were 81 trillion, an increase of 55% over the previous period; the provision for impairment losses on investment assets was 82 trillion, an increase of nearly two times.

The fluctuation of investment performance is the downward trend of the decline in the highest net profit. In 2018, the company’s floating losses were released in a concentrated manner, and in 2019 it will gradually enter the battlefield.

Assets and liabilities are under pressure in both directions, and the value growth rate has fallen below 10%.

At the end of 2018, China Life had an embedded value of US $ 7,951 trillion, an increase of 8 earlier.

3%, the growth rate appears to fall back.

Initially, the value of new business has negative growth, and its contribution to value growth has become smaller; due to the impact of changes in the equity market, breakthroughs in investment income in 2018 have offset negative biases, which has an impact on value growth.

Investment advice: Affected by the investment side, China Life’s 2018 performance has shifted.

Looking forward to 2019, China Life starts from a new starting point, and the overall strategic planning transformation and marketization pace have accelerated.

We expect EPS / BPS to be 1 in 2019-2011.



06 (previous average 0.


46 /-); 12.



51 (former average of 13.


5 /-).

It is expected that the EV growth rate in 2019 is 15% -20%, and the corresponding price range is 32.


8 yuan / share, maintain the “recommended” level.

Risk warning: NBV growth is slower than expected, the equity market fluctuates, and interest rates continue to fall.