MS：China Life Insurance Co. Ltd

摩根斯坦利：中国人寿 公司研究

15页 April 19, 2007

Maintain Equal-weight; Increasing PT to 23.97.
China Life reported 2006 net profit of Rmb20.0 billion, up
114% YoY, and 16% above consensus. We are raising
our earnings estimates by 48% for 2007 and 36% for
2008. We introduce our 2009 earnings forecast of
Rmb33.9 billion, implying 21% YoY growth. Our
Equal-weight is more a valuation call.
Investment to drive earnings and EV. The impact is
less significant on EV. Equity investments that were
subject to lock-up were already marked to market in EV
in 2006. The 20% stake in Guangdong Development
Bank was carried at book. Shanghai A Share
Composite Index is up 35% YTD. We see little sign of
abatement in domestic liquidity despite series of
tightening measures. Equity holdings were up to 13.9%
of total investment, from 8.0% at end-05.
New business trend ahead of estimates. We estimate
the present value of new business growth would have
been 22% in 2006, excluding the impact of assumption
changes, vs. our estimated 20% growth. Encouragingly,
margin improvement drove much of the present value
progression, driven in part by positive product mix shift.
Key assumptions closer to our estimate; we