Xiaomo: China Life Insurance (02628) profit far exceeded expectations, dividend payment was surprising

The Zhitong Finance App learned that J.P. Morgan Chase released a research report saying that China Life Insurance (02628) Fa Yingxi expects medium-term net profit to increase by about 215% to 235% year on year, reaching about 128.933 billion to 137.119 billion yuan, which is close to the bank and market's net profit forecast for the full year 2026. The bank expects the stock price to respond positively in the short term, as earnings far exceeded expectations, but considering that most of the profit growth is expected to come from investment income, it is estimated that investors will pay more attention to the room for dividend increases. Komo maintains China Life Insurance's “plus” rating, with a target price of HK$40.

Xiaoma pointed out that China Life Insurance showed that strong profits in the first half of the year were supported by many factors, including strict asset liability management, product diversification, debt cost control, and effective investment execution. The bank's analysis shows that every 10% increase in the Shanghai and Shenzhen 300 index is sensitive to China Life Insurance's 2026 net profit forecast, which means that the profit performance in the first half of the year not only reflects the increase in the stock market, but also indicates that China Life will pay an interim dividend for the first time in 2025, with an interim dividend of 0.238 yuan, and a full year dividend of 0.86 yuan. The payout rates are 16% and 18%, respectively. It is too conservative. If China Life maintains a stable dividend rate, there is potential room for doubling per share this year. A-share market Maintain stability.