Back to top

Analyst Blog

On Jul 24, 2013, we upgraded China Life Insurance Co. Ltd. (LFC - Analyst Report) to Outperform from Underperform based on its strong brand name, an extensive domestic distribution channel, strong investments and stable ratings.

Why the Upgrade?

After posting disappointing financial results over the past few quarters, China Life witnessed a 79.1% surge in operating earnings in the first quarter of 2013. The operating profit of this Zacks Rank #1 (Strong Buy) stock increased to RMB12.8 billion ($2.04 billion) from RMB6.9 billion ($1.09 billion) in the year-ago quarter due to higher investment yield and lower impairment losses. Moreover, total assets, return on equity and shareholder equity improved during the quarter.

Driven by this turnaround in China Life’s performance and the improving Chinese economy, analysts raised their estimates for the company’s 2013 earnings. This resulted in a 20.6% surge in the Zacks Consensus Estimate during the last 30 days to $2.58 per share, up 177.4% over 2012.

Moreover, the investment income of China Life has shown substantial improvement over the past few years. Investment income increased 37.2% in the first quarter of 2013 due to a change in the company’s approach toward investment and increased investment in fixed income investment assets.

Moreover, China Life has the most extensive distribution and service network among all insurance companies operating in China. The company’s distribution network of exclusive agents, direct sales representatives, bancasurrance outlets, customer service managers and financial advisers is spread across the country, making it one of the largest brands with one of the biggest customer base in China.

Other Stocks to Consider

Other stocks in the life insurance business that are worth considering are American Equity Investment Life Holding Co. (AEL - Snapshot Report) – Zacks Rank #1 (Strong Buy), Health Insurance Innovations, Inc. (HIIQ - Snapshot Report) – Zacks Rank #2 (Buy), and StanCorp Financial Group Inc. (SFG - Analyst Report) – Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%