Huachuang Securities·2025-04-30 09:45Investment Rating - The report maintains a "Recommended" rating for China Life Insurance (601628) with a target price of 51.7 CNY [2]. Core Views - In Q1 2025, the company achieved a net profit attributable to shareholders of 28.8 billion CNY, representing a year-on-year increase of 39.5%. The new business value (NBV) grew by 4.8% year-on-year, while net and total investment returns were 2.6% and 2.75%, respectively, down by 0.22 percentage points and 0.48 percentage points year-on-year [2][7]. - The company is experiencing significant growth in performance compared to its peers in the life insurance sector, primarily due to a substantial decrease in insurance service costs [7]. - The transformation of product offerings is showing clear results, with floating income products accounting for 52% of first-year premium income, a significant increase year-on-year. This shift is expected to help mitigate the cost pressures associated with guaranteed returns [7][8]. Financial Summary - Revenue and Profit Forecasts: - Revenue (million CNY): 2024: 528,567; 2025E: 502,046; 2026E: 510,364; 2027E: 514,581 [8]. - Net Profit (million CNY): 2024: 106,935; 2025E: 87,430; 2026E: 90,028; 2027E: 91,854 [8]. - Earnings per Share (CNY): 2024: 3.78; 2025E: 3.09; 2026E: 3.19; 2027E: 3.25 [8]. - Valuation Ratios: - Price-to-Earnings Ratio (P/E): 2025E: 12.2; 2026E: 11.9; 2027E: 11.6 [8]. - Price-to-Book Ratio (P/B): 2025E: 2.0; 2026E: 2.0; 2027E: 2.0 [8]. Investment Insights - The company’s investment assets reached 6.82 trillion CNY by the end of Q1 2025, reflecting a 3.1% increase from the end of the previous year. Despite fluctuations in interest rates, the company’s net investment yield decreased, primarily due to the expiration of high-yield fixed-income products [7][8]. - The report anticipates that the company's performance will improve in Q2 2025 as interest rates decline, potentially alleviating some of the negative impacts from floating losses on bonds [7].