KAIYUAN SECURITIES·2025-04-30 12:10Investment Rating - The investment rating for China Life Insurance (601628.SH) is "Buy" (maintained) [1] Core Views - The company's Q1 2025 net profit attributable to shareholders reached 28.8 billion yuan, a year-on-year increase of 39.5%, exceeding expectations. The growth was primarily driven by significant improvements in insurance service performance and a reduction in income tax expenses [4] - The company maintains a core solvency ratio of 146% as of the end of Q1 2025, a decrease of 7.22 percentage points from the beginning of the year, and has maintained an A rating in the comprehensive risk assessment for 27 consecutive quarters [4] - The report forecasts net profits of 117.1 billion, 129 billion, and 147.8 billion yuan for 2025, 2026, and 2027 respectively, representing year-on-year growth of 9.5%, 10.2%, and 14.6%. The current stock price corresponds to P/EV valuations of 0.68, 0.63, and 0.58 for 2025-2027 [4] Summary by Sections Financial Performance - In Q1 2025, total premiums reached 354.4 billion yuan, a year-on-year increase of 5.0%, while new premiums were 107.4 billion yuan, down 4.5%. Short-term insurance premiums increased by 19.2% [5] - The company has significantly increased the proportion of floating income products in first-year premiums to 51.7%, indicating successful transformation efforts [5] Investment Returns - The total investment income for Q1 2025 was 53.8 billion yuan, with an investment return rate of 2.75%, a decrease of 0.48 percentage points year-on-year, primarily due to declines in the bond market [6] - As of the end of Q1 2025, the company's investment assets reached 6.82 trillion yuan, a growth of 3.1% compared to the end of 2024 [6] Valuation Metrics - The report provides a financial summary with key metrics for 2023A to 2027E, including: - Premium service income projected to grow from 212.4 billion yuan in 2023 to 277.1 billion yuan in 2027, with a CAGR of approximately 10% [7] - Embedded value expected to increase from 1.26 trillion yuan in 2023 to 1.76 trillion yuan in 2027 [7] - New business value anticipated to rise from 36.9 billion yuan in 2023 to 44.5 billion yuan in 2027 [7]