UBS: China Life Insurance (02628) announces strong interim results far exceeding expectations, reiterates "buy" rating.

UBS released a research report stating that China Life Insurance (02628) has raised its net profit forecast for 2026 by 37% to reflect the earnings guidance for the first half of the year and the macro environment for the second half of the year. UBS reiterated a "buy" rating for China Life Insurance, with an H-share target price of HK$40. UBS stated that the mid-year performance forecast released by China Life Insurance for 2026 far exceeded expectations, with an expected year-on-year increase in net profit of 215% to 235% to RMB 129-137 billion, surpassing the market's full-year forecast of RMB 126 billion. The bank pointed out that China Life Insurance's second-quarter net profit is expected to increase by 8 to 8.7 times to RMB 109-118 billion, driven mainly by strong investment income growth and improved performance in insurance services. However, the momentum of the New Business Value (VNB) for China Life Insurance in the second quarter has cooled down slightly, with UBS estimating a year-on-year growth of 33% in the first half of the year, slower than the 76% growth in the first quarter. This is mainly due to the high base effect caused by the extension of the sales boom in the same period last year, the early sale of long-term products in the first quarter of this year, and the tightening of regulatory requirements for uniform commission of bank-insurance channels in the second quarter. Despite the possibility of further slowdown in the growth of new business value in the third quarter due to new regulations and high base effect, UBS expects China Life Insurance to still achieve double-digit growth in new business value for the full year.