Bank of America Securities: Maintains a "buy" rating on China Life Insurance (02628), expecting a 20 to 30% increase in new business value in the first quarter.

Bank of America Securities issued a research report, stating that it has raised China Life Insurance's profit forecast for 2026 by 5%, but lowered the profit forecast for 2027 by 1%, maintaining an H-share target price of HK$33.1 and a "buy" rating. China Life Insurance saw a 44% year-on-year increase in net profit last year. In the fourth quarter of last year, due to a significant decrease in investment income on a quarterly basis, coupled with lower insurance service revenue, it recorded a net loss of 13.7 billion yuan. The bank suggests investors to overlook the fourth quarter performance, especially the low insurance service revenue in the second and fourth quarters, but strong performance in the first and third quarters. New business value increased by 36% year-on-year to 45.8 billion yuan last year, with first-year regular premiums remaining roughly steady, and the new business profit margin increasing from 26.2% in 2024 to 36.2%. The bank expects China Life Insurance to achieve a 20% to 30% increase in new business value in the first quarter of this year. However, due to the company's aggressive investment strategy, its net profit is expected to decline year-on-year. Nevertheless, the bank believes that short-term fluctuations in investment income should not affect its long-term and normal investment return forecasts for the company.