China Life Profit Surges Amid Investment Returns, Tax Relief

(Bloomberg) -- China Life Insurance Co., the nation’s largest life insurer, reported an almost sixfold jump in third-quarter profit thanks to higher investment returns and tax relief.

• Net income surged 483% to 20.1 billion yuan ($2.9 billion), in line with estimates based on a projected range given by the Beijing-based firm itself for the January through Sept. 30 period
• New business value, a gauge of the future profitability of new life policies, increased 20.4% in the first nine months, the company said in an exchange filing after market close Tuesday

Key Insights

• China Life’s quarterly profit exceeded expectations among Bloomberg Intelligence and China International Capital Corp. analysts. Investment income jumped 87%, even as the benchmark Shanghai Composite Index dropped 2.5%
• While new business value growth slowed from a 23% expansion in the first half, it still suggests double-digit growth in third quarter, leading peers, according to CICC, as a focus on wider-margin protection products bore more fruit.
• China Life’s new business value growth has bettered its peers this year in part because of the company’s practical strategies and the “outstanding” execution by new management that took the helm at the end of 2018, according to CICC analysts led by Tian Dan. Expansion is expected to remain strong into next year, they said
• To read more about the insurer’s reforms and prospects: China Life May Extend Profit Surge Through Rest of 2019: React

Market Reaction

• The stock rose 0.2% in Hong Kong trading to close at HK$19.74 ahead of the earnings release. The shares are up almost 20% this year

Get More

• Ping An Quarterly Profit Jumps on Investment, Banking Income
• China Life Boosts New Premiums With Higher Margin, More Agents

To contact Bloomberg News staff for this story: Zhang Dingmin in Beijing at dzhang14@bloomberg.net

To contact the editors responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net, Gregory Turk

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With assistance from Bloomberg