China Life Insurance (601628) 2019 Third Quarterly Report-Manpower Growth Exceeds Expectations, 2020 Starts Out

Event: On the evening of October 29, 2019, China Life announced the third quarter of 2019 results, and the value of new business increased by 20.

4%, net profit 杭州桑拿网 attributable to mothers was 57.7 billion, a year-on-year increase of 190%.

Key points of investment: Net profit, multiple growth of comprehensive income, Q3 single-quarter net profit slightly exceeded expectations: benefited from the significant improvement in investment and the implementation of the new tax reduction policy, the company’s net profit attributable to the mother in the first three quarters of 57.7 billion, an increase of more than 190%The comprehensive income was 78.1 billion yuan, an increase of 266% over the same period.

Among them, Q3 achieved a net profit of 20.1 billion attributable to mothers in a single quarter, which was slightly higher than expected. It is expected that the operating improvements and better investment-end performance brought about by the company’s reforms will be the first.

The business structure has improved markedly, and the value of new business has maintained a high growth rate: new single-phase sales in the first three quarters were 99.1 billion, with long-term growth.

7%, the growth rate is not high, but high-value business is growing rapidly, the proportion has increased significantly, and the proportion of new single-phase transactions over ten years or more has increased by 15.

7pct to 51.

1%, and the proportion of specific guaranteed services increased by 8.

8 points.

Thanks to the substantial improvement in business structure, the value rate of new business has increased significantly, and the value of new business has been realized20.

The high growth rate of 4% is far higher than the main advantage.

The growth of individual insurance manpower has become a bright spot: as of the end of September, the size of individual insurance manpower reached 166.

30,000 people, an increase of up to 15 compared with the end of last year.

At the same time, the average monthly effective manpower and the monthly average sales manpower of specific guaranteed products both achieved rapid growth, with growth rates reaching 37 respectively.

4% and 49.

2%, individual insurance teams have achieved both quantity and quality.

We believe that there are two main reasons: First, under the strategy of revitalizing China Life, individual insurance channels have strengthened investment in staffing, training, retention and other aspects, and the team’s own sales ability has been improved; second, it has actively cooperated in product strategy, through the launch of economical productsImprove morale and income.

The investment side is still bright, with a total investment yield of 5.

72%: Benefiting from the steady growth of premiums and the significant drop in the surrender rate, the company’s investment assets increased by 10 compared with the beginning of the year.

7% to 3.

44 trillion yuan, while continuing to strengthen the accumulation of fixed income assets, and well grasp the rhythm of the equity market, the first three quarters of net investment yield4.

83%, increasing by 0 every year.

21pct, total investment yield 5.

72%, an increase of 2 a year.

31 points.

Profit forecast and investment advice: Under the assumption of 5% return on investment, the EPS for 2019-2021 is predicted to be 1.



97 yuan, corresponding to 18 for PE.



67 times, EVPS is 32.



35 yuan, the corresponding PEV is 0.



77 times, the current estimate is in a reasonable range, maintaining the “overweight” level. Risk factors: insufficient manpower on scale, new orders sales falling short of expectations, and equity market falling sharply