BOC International released a research report stating that it maintains the “buy” rating of China Life Insurance (02628) and expects net profit to be 46.6 billion yuan under the new standards in 2024. Since the share of the company's transactional financial assets (31%) of investment assets is relatively higher than that of peers, it is expected to cause profit volatility. The target price was lowered from HK$17 to HK$14. Currently, the valuation is still attractive.
According to the report, as of the end of 1Q24, the company's core solvency ratio was 154.97%, down 3 percentage points from the end of the previous year, mainly due to the increase in capital with minimum market risk due to increased equity allocation. In the past 3 years, the company has increased its long-term debt allocation efforts to reduce the long-term debt period. The long-term gap has been reduced to 4.4 years, which is at a low level in the industry, which is conducive to mitigating the risk of interest spreads and losses.