BOCOM INTL: Maintains Buy rating on China Life Insurance (02628), raises target price to 33 Hong Kong dollars.

BOCOM INTL released a research report, updating the profit forecast for China Life Insurance (02628). The company's net profit attributable to shareholders in 2025 is expected to increase by 44.1% year-on-year, while the new business value is expected to grow by 35.7% year-on-year. Despite poor investment performance in 4Q25, the long-term operating trend remains unchanged. The bank forecasts that the new business value will increase to 50 billion RMB in 2026. The target price has been raised to 33 Hong Kong dollars, corresponding to a target P/EV of 0.6 times in 2026, and the recommendation to buy is maintained. Key points from BOCOM INTL: 2025 Performance The company recently reported its performance for 2025, achieving operating income of 615.678 billion RMB, an increase of 16.5% year-on-year; net profit attributable to shareholders was 154.078 billion RMB, an increase of 44.1% year-on-year, continuing high-quality growth on the high base of 108.9% year-on-year growth in 2024. Benefiting from the improvement in the value contribution of channels such as individual insurance and bancassurance, the new business value (NBV) for the whole year was 45.750 billion RMB, an increase of 35.7% year-on-year. The overall investment return rate increased to 6.09%, an increase of 59 basis points year-on-year. Although the performance of some investment targets has declined since 4Q25, leading to investment losses that have had some impact on overall performance, considering the long-term nature of the main business growth of life insurance companies, the impact is relatively limited. The company's management further reiterated at the performance briefing that they will accelerate the pace of building a world-class life insurance company with Chinese characteristics, and judged that supported by changes in population structure, and the development of the insurance industry during the "Fifteenth Five-Year Plan" period, the next five years will be a "golden period of opportunity" for the company's development. Profit Outlook Update The bank has updated its forecast for 2026-28, expecting steady growth in the scale of life insurance business in the next three years, especially with the accelerated introduction of new products for major health and old-age care, premium business income is expected to maintain a growth rate of over 5% year-on-year. The new business value is expected to continue to increase significantly based on the high base in 2025, reaching 50 billion RMB in 2026. Digital operation and risk control capabilities will continue to improve, cost reduction and efficiency enhancement will be implemented in depth, and profitability will continue to maintain at a good level after overcoming short-term disturbances in the investment side. Overall, as a leading benchmark in the Chinese life insurance market, the company is expected to continue to maintain a profit growth rate surpassing its peers, and to be the first to benefit from the industry's long-term profit improvement and valuation repair process.