Damo: Maintaining China Life's (02628) “Overweight” rating and target price of HK$38.8, leading the industry in new business value growth in the first nine months

The Zhitong Finance App learned that Morgan Stanley released a research report stating that it will maintain China Life's (02628) H share “gain” rating and a target price of HK$38.8. The company's third-quarter results were broadly in line with the bank's and market expectations. New business value continued to outperform peers, and management expected further growth in new business value in 2027.

The bank pointed out that China Life Insurance's net loss for the third quarter was 45 billion yuan, which was roughly in line with expectations and better than the bank's previous estimated loss of 52 billion yuan. Underlying profit for the first nine months of 2026 increased 15.8% year-on-year to RMB 94 billion, which can be used as another reference for dividends per share. Despite market headwinds, book value per share fell by only 1.8% quarterly and increased by 9.5% in the first nine months. The total return on investment was 3.23%, and the company continued to shift its investments to high-yield stocks.

In terms of new business, China Life Insurance's new business value increased 13.1% year-on-year in the first nine months, making it the strongest in the industry. Despite a slowdown in growth in the third quarter, it is likely to outperform most of its peers. The core solvency ratio remained stable at 156.3%, down 0.5 percentage points from quarter to quarter. The bank estimates that even if the stock market falls by 10%, the solvency ratio will only drop by about 2 percentage points.