PICC(SH:601319) Xin Lang Cai Jing·2025-03-28 10:35Core Viewpoint - China Life Insurance reported a significant increase in net profit and maintained a strong dividend capacity, indicating robust financial health and growth potential in the insurance sector [1][4]. Financial Performance - The group’s net profit attributable to shareholders rose by 88.8% year-on-year to 42.2 billion RMB, aligning with expectations [1]. - The net assets attributable to shareholders increased by 11% to 268.9 billion RMB [1]. - The dividend per share grew by 14.7% year-on-year to 0.18 RMB, slightly below expectations [1][4]. Development Trends - The comprehensive cost ratio (CoR) increased due to significant disaster impacts, with a forecast for recovery in underwriting profitability by 2025 [2]. - In 2024, the property and casualty insurance premium income rose by 6.1% to 485.2 billion RMB, while the CoR increased by 1.0 percentage point to 98.8% [2]. - The net loss from major disasters exceeded the average of the past five years, impacting non-auto insurance profitability, although auto insurance CoR improved by 0.1 percentage point to 96.8% [2]. Life and Health Insurance Performance - Adjusted assumptions for life and health insurance still showed substantial growth, with life insurance contract service margin (CSM) increasing by 22% and health insurance CSM by 19% [3]. - The new business value (NBV) for life insurance, after assumption adjustments, remained 37% higher year-on-year at 5 billion RMB, while health insurance NBV was 131% higher at 6.5 billion RMB [3]. - The internal value of life and health insurance increased by 18% and 34% respectively from the beginning of the year [3]. Profitability Forecast and Valuation - The profitability forecast for 2025/2026 remains unchanged, with the company maintaining an outperform rating in the industry [5]. - The target price for the H-shares was raised by 27% to 6.2 HKD, reflecting a potential upside of 47.3% from the current price [5]. - The target price for the A-shares was increased by 10% to 7.6 RMB, indicating a 9% upside potential [5].