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2026-11-11 12:25:05 UBS published a research report stating that CHINA LIFE (02628.HK) expects agent first-year regular premium (FYRP) to record positive growth during the "Good Start" campaign period, supported by a rebound in agent headcount and improving quality. The insurer believes the bancassurance channel continues to be dragged by Circular No. 65 (expense control). Although bancassurance FYRP rebounded MoM from July to September, the September level remained below the monthly average in 1H, indicating that the impact of Circular No. 65 persists. The company said bancassurance accounted for about 40% of industry FYRP in 1Q26. For 2027, double-digit growth in agent new business value is considered an aggressive target, while bancassurance growth is expected to slow YoY. UBS noted that the company is targeting double-digit growth in 2026 operating profit after tax (OPAT). OPAT in 3Q rose 21% YoY, versus a 13% increase in 1H, mainly driven by higher dividend income. OPAT is not currently part of the Ministry of Finance assessment framework, and dividends are not yet linked to OPAT. However, UBS believes OPAT will become increasingly important in dividend decisions. The company is committed to delivering stable long-term growth in dividend per share. UBS added that the company's equity exposure has reached 18% to 19%, close to its strategic asset allocation target. In the first nine months of this year, the company increased holdings of fair value through other comprehensive income (FVOCI) equities by about RMB200 billion, while reducing holdings in growth stocks by about RMB100 billion. The current allocation to high-dividend stocks is in line with targets. If risk-return becomes more attractive, the company is willing to further increase FVOCI exposure to enhance earnings stability. New money yield stands at 2.2%, well above the breakeven yield of 1.2% for new policies. Solvency sensitivity to equity price risk is limited, while interest rates are a more sensitive factor. If interest rates remain at current levels, the solvency ratio in 4Q is expected to remain broadly stable QoQ. The upcoming Phase III of C-ROSS II is expected to significantly improve the company's solvency position. UBS maintained its Buy rating on CHINA LIFE (02628.HK) H-shares with a TP of HKD36. (da/u)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |