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China Life's (LFC) 1H17 Earnings & Revenues Increase Y/Y

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China Life Insurance Co. Ltd’s (LFC - Free Report) first-half 2017 earnings per share of 6.45 cents (RMB 0.43) grew 7% year over year.

The company’s net profit attributable to equity holders of the company was $1.8 billion (RMB 12.2 billion) at the end of first six months of 2017, reflecting 17.8% year-over-year growth. The upside was primarily driven by higher revenues.

Operational Update

During the first half of 2017, the company’s total revenues reached $59.4 billion (RMB 396.2 billion), up 17.3% year over year on the back of rapid growth in premiums.

The company's gross written premiums were $51.9 billion (RMB 346 billion), an increase of 18.3% year over year.

Exclusive Individual Agent Channel’s gross written premiums amounted to $34.1 billion (RMB 227.4 billion), an increase of 28% year over year.

First-year regular premiums totaled $11.7 billion (RMB 77.7 billion), up 10.8% year over year.

Renewal premiums amounted $27 billion (RMB 180.5 billion), up 39% year over year.

Underwriting and Policy Acquisition Costs ratio at the end of first six months of 2017 came at 9.29%, a deterioration of 39 basis points (bps) year over year.

Administrative Expense ratio was 3.39%, improving 41 bps from the prior-year period.

China Life Insurance Company Limited Price, Consensus and EPS Surprise

Financial Update

As of Jun 30, 2017, total assets came at $431.2 billion (RMB 2,875 billion), up 6.6% from year-end 2016.

As of Jun 30, 2017, total liabilities came at $384.3 billion (RMB 2,562 billion), up 7.2% from year-end 2016.

As of Jun 30, 2017, total shareholders’ equity came at $46.3 billion (RMB 308.6 billion), up 2% from year-end 2016.

As of Jun 30, 2017, the company had $10.35 billion (RMB 69 billion) of cash fund, down 38% from year-end 2016.

The company's gross investment income was $85 billion (RMB 567 billion), an increase of 11.5% year over year.

During the first half of 2017, the company’s investment assets reached $389.3 billion (RMB 2,595.5 billion), an increase of 5.8% from the end of 2016.

As at the end of the first six months of 2017, the company's total assets reached $431.2 billion (RMB 2,875 billion), an increase of 6.6% from the end of 2016.

The company's embedded value was $104.6 billion (RMB 697.5 billion), an increase of 7% from the end of 2016.

At the end of the first half of 2017, the company reported return on equity of 4.01%, reflecting 71 bps year-over-year improvement.

The company's market share in the first half of 2017 was approximately 19.38%, maintaining the first place in the industry

Solvency Ratio

Core solvency ratio at the end of first six months of 2017 amounted 275.7%, down 450 bps from year-end 2016.

Comprehensive Solvency ratio came at 280%, down 1726 bps from  year-end 2016.

Zacks Rank and Other Stocks to Consider

China Life presently has a Zacks Rank #2 (Buy).

Some other stocks worth considering in the insurance industry are First American Corporation (FAF - Free Report) , CNO Financial Group, Inc. (CNO - Free Report) and Argo Group International Holdings, Ltd. (AGII - Free Report) . While First American Corp sports a Zacks Rank #1 (Strong Buy), the other two carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

First American Corporation provides financial services. The company delivered positive surprises in all the last four quarters with an average beat of 12.64%.

CNO Financial develops, markets and administers health insurance, annuity, individual life insurance and other insurance products for senior and middle-income markets in the United States. The company delivered positive surprises in three of the last four quarters with an average beat of 6.69%.

Argo Group underwrites specialty insurance and reinsurance products in the property and casualty market worldwide. The company delivered positive surprises in all the last four quarters with an average beat of 26.51%.

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