China Life(SH:601628) GF SECURITIES·2024-10-18 11:39Investment Rating - The report maintains a "Buy" rating for both A-shares and H-shares of the company [4]. Core Views - The company expects a significant increase in net profit attributable to shareholders for the first three quarters of 2024, estimated between CNY 101.135 billion and CNY 108.767 billion, representing a year-on-year growth of 184.6% to 206% [2]. - The substantial growth in profit is primarily driven by a recovery in the stock market, which has led to a significant increase in investment income, nearly doubling the net profit compared to the same period last year [2]. - The company holds a considerable proportion of equity and fund assets, with 11.8% in public market equities, which has been positively impacted by the market's recovery [2]. - The report anticipates that the new business value growth will continue to expand, supported by a decline in the cost of liabilities and favorable policies [2]. Summary by Sections Profit Forecast - The company forecasts an EPS of CNY 3.96, CNY 4.08, and CNY 4.28 for the years 2024 to 2026, respectively [3][10]. - The expected growth rates for net profit attributable to shareholders are 142.08%, 3.13%, and 4.84% for the years 2024 to 2026 [3][10]. Valuation - The report assigns a PEV of 0.90X for A-shares and 0.30X for H-shares, with a corresponding fair value of CNY 46.25 per share for A-shares and HKD 16.84 per share for H-shares [10]. - The valuation reflects a recovery in the capital market and stable growth in value, which is expected to drive the company's valuation upward [10]. Business Performance - The company anticipates a total premium income growth of 2.3%, 5.8%, and 6.0% over the next three years, with individual insurance channels showing a positive trend [9]. - The report highlights that the investment performance is expected to improve significantly due to favorable market conditions and the company's strategic asset management [9].