China Life Insurance (601628): Investment and performance affect major medium-term performance advances

Core point of view: investment improvement, gradual reduction of tax exemption, and substantial increase in interim results. The company issued a 2019 interim results notice. It is expected that in 2019, the net profit attributable to shareholders of the parent company will be increased 188 each year.

86 to 221.

USD 7.1 billion, an annual increase of about 115% to 135%; increase in net profit attributable to shareholders of the parent company after excluding non-recurring gains and losses of 140.

59 to 173.

670,000 yuan, an increase of about 85% to 105% in ten years.

  The company’s interim results have improved significantly, mainly due to the increase in the increase in income from equity investments in the open market, and the implementation of relevant national accounting policies. The company’s income payable in 2018 decreased by approximately RMB 51.

54 ppm, correspondingly reducing the impact of income and expenses during the reporting period.

  The investment proposal closed on July 29, and the company’s Hong Kong stock priority was 20.

15 Hong Kong dollars at the current exchange rate of 0.

88 calculation, equivalent to about 17.

73 yuan, about 59% of the closing price of A shares on July 29.

It is expected that the EPS will be 0 each year from 2019 to 2021.

92, 1.

06, 1.

16 yuan, corresponding to July 29 A-share merger PE is 32.

6, 28.

3, 25.

7 times, the corresponding P / EV is estimated to be 0.

93, 0.

86, 0.

78 times.

  According to the stable scale of the company’s business model, assuming that its main business grows in a balanced 武汉夜网论坛 manner, the remaining marginal long-term amortization of life insurance contributes stable profits, and the life insurance valuation method is used to predict future relevant indicators. The reasonable value of the company is 33.

63 yuan (converted at the current exchange rate and considering a certain discount, the reasonable value of H shares is 24.

76 HKD is the highest), corresponding to 2019 P / EV of 1.

05 times, maintain A, H shares buy rating.

  Risks remind the replacement of systemic risks brought about by major changes in the external financial environment, the risk of death difference losses, interest rate risks, catastrophe risks, etc. caused by major changes in the risk rate of the insurance industry, and the impact of fluctuations in capital markets on performance.Certainty.