Group 1 - The core viewpoint emphasizes China Life's commitment to implementing the new "National Ten Articles" requirements, focusing on high-quality development and enhancing asset-liability management to adapt to market changes [1] - In 2024, the company plans to develop and upgrade over 100 new products to meet the growing insurance protection and wealth management needs of the public [1] - The company is actively responding to national strategies by expanding its pension finance offerings, particularly in commercial pension annuities, and has achieved the highest industry rankings in personal pension business metrics [1] Group 2 - China Life is enhancing its inclusive finance initiatives by expanding insurance coverage for specific groups such as farmers, low-income populations, and students, while simplifying product terms for better customer understanding [1] - The company is making strides in digital finance by catering to internet-savvy customers' needs for pension, death, and accident insurance, achieving breakthroughs in diverse product offerings [1] - In terms of product innovation, China Life is focusing on health insurance by launching various specialized products, including easy-underwriting critical illness products and long-term care insurance, while also incorporating innovative drugs into coverage [2]

Core Viewpoint - China Life Insurance actively implements the business philosophy of "One China Life, One Life Protection," providing comprehensive financial services including insurance, investment, and banking to support the development of the private economy. Group 1: Credit Support for Small and Micro Enterprises - China Life's subsidiary, Guangfa Bank, has established credit relationships with small and micro enterprises, such as Qiangchun Technology Co., which received a loan of 2.56 million yuan and later increased to a maximum credit of 3 million yuan [1][2] - Guangfa Bank has provided financing support exceeding 11.6 billion yuan to over 5,000 small and micro business owners in Hangzhou, with a total balance of inclusive loans for small enterprises reaching 196.1 billion yuan nationwide, reflecting a growth of approximately 9% since the beginning of 2024 [2] Group 2: Insurance Products for Small and Micro Enterprises - China Life has developed targeted insurance products for small and micro enterprises, providing employee protection for over 50,000 companies in Zhejiang alone in 2024 [3] - The company has launched specialized insurance products for technology enterprises, including intellectual property infringement liability insurance and data infringement loss compensation insurance, serving over 130,000 small and micro enterprises in Zhejiang [3] Group 3: Investment Support for Private Enterprises - China Life has leveraged its insurance funds to support private and small enterprises with an investment scale exceeding 240 billion yuan by the end of 2024 [5] - The company has invested in various private enterprises, including significant stakes in well-known companies such as CATL, Tencent, Midea, and Alibaba, with over 50% of the top ten holdings being private enterprise stocks [6] Group 4: Comprehensive Financial Services - China Life integrates various financial resources, including equity investment, banking settlement services, and equity financing consulting, to provide a full range of financial and non-financial services to small and micro enterprises [4] - The company emphasizes its commitment to supporting the private economy as part of its broader strategy to enhance financial services for the real economy [6]

Group 1 - The former president of China Life Group, Yang Chao, has been investigated, drawing significant attention [1][2] - Yang Chao, born in 1950, retired in 2011 after nearly 6 years as the general manager of China Life Group, during which he oversaw the company's return to A-share listing in January 2007 [2] - The announcement of Yang Chao's investigation came just a day after China Life Group released its 2024 annual report, which showed a revenue of 528.57 billion yuan, a 30.5% increase year-on-year, and a net profit of 106.93 billion yuan, a 108.9% increase year-on-year [2] Group 2 - The last high-ranking executive from China Life Group to be investigated was Wang Bin, who was sentenced to death with a two-year reprieve for bribery and concealing overseas deposits in September 2023 [3] - Wang Bin served as chairman of the group from September 2018 to January 2022, which does not overlap with Yang Chao's tenure [3]

Core Viewpoint - The Chinese government is accelerating the development of the third pillar of pension insurance in response to the aging population, indicating a growing urgency in the financial sector to innovate and expand pension-related products and services [1][2]. Policy Developments - The government has progressively established a clear path for addressing aging, with key milestones including the 2013 policy to accelerate the development of the elderly care service industry, the elevation of aging response to a national strategy in 2019, and the establishment of a multi-tiered pension system by 2022 [2]. - By December 2024, a comprehensive framework for the personal pension system was completed, with a goal to establish a robust pension financial system by 2028 and achieve high-quality development by 2035 [2]. Company Strategies - China Life Insurance Company is focusing on product innovation in areas such as commercial annuities, health insurance, and inclusive insurance, aiming to maintain its leading position in the personal pension sector [1][3]. - The company has introduced a new strategic plan called the "333 strategy," which emphasizes the importance of pension finance as a new growth area [3]. Market Performance - As of the end of 2024, China Life's personal pension business reached nearly 3 billion yuan, with over 270,000 policies sold, making it the industry leader [4]. - The company has launched 12 types of personal pension insurance products, catering to various customer needs and preferences, including flexible and high-yield options for younger clients [7]. Innovation and Training - China Life is actively training insurance agents to better understand and promote personal pension products, enhancing customer service through an integrated online and offline platform [8]. - The company has developed a multi-dimensional product system that addresses the needs of different age groups and income levels, ensuring a comprehensive approach to retirement planning [9]. Investment Philosophy - China Life adheres to a long-term investment strategy, focusing on balancing safety, stability, and returns in its pension financial products, with a commitment to maintaining customer trust in their retirement funds [10][11]. - The company reported settlement rates of 3.3% and 3.1% for its dedicated commercial pension insurance accounts, reflecting its focus on providing stable returns for clients [11].

Core Viewpoint - China Life Insurance has improved its ESG rating to A, focusing on climate risk analysis and sustainable financial practices [1][2][3] Environmental Section - The environmental section emphasizes "green development and financial transformation," including the establishment of a climate risk scenario analysis framework and a green finance development strategy for 2023-2025 [1] - The company promotes green insurance and investment, achieving a paperless insurance rate of 99.9% for individual long-term insurance [1] Social Section - The social section highlights "finance for good and leading sustainable development," focusing on inclusive finance for new citizens and new business formats [2] - China Life has invested 103.7 billion in rural revitalization and contributed 31 million in consumer assistance and 21 million in public donations [2] - The company has nearly 160 million registered users on its life insurance app, enhancing digital service efficiency [2] Governance Section - The governance section is themed "compliance-based and solid operational foundation," with a focus on board independence and diversity, including 27% female board members [2] - The company has maintained an A-class risk rating for 26 consecutive quarters and established a comprehensive risk management system [2] - 92% of suppliers have signed a supplier declaration, and there have been zero major penalties for risk events [2] Innovations - In 2024, China Life initiated climate risk scenario analysis and stress testing, utilizing international climate scenarios and optimizing them for national conditions [3] - The analysis assesses the impact of climate risks on investment, operations, and liabilities over short (2030), medium (2050), and long-term (2080) horizons [3] Customer Complaints - Customer complaints surged by 119% in 2024, with a total of 298,063 complaints, indicating a significant increase from 135,730 in 2023 [4] - The complaint rate per 10,000 policies rose to 7.05 from 3.32, reflecting broader trends in the financial insurance sector [4] - Major issues include sales misrepresentation, policy cancellation disputes, and regulatory violations [4][5] Regulatory Issues - In 2024, China Life faced over 10 million in regulatory fines, with violations including misleading policyholders and financial misconduct [5] - The company is enhancing consumer protection processes and has increased the review of products and services by 48.34% year-on-year [5][6] Leadership and Compliance - Recent investigations into former executives highlight ongoing compliance challenges, with a former president under investigation for serious violations after 14 years of retirement [7][8] - The company emphasizes its commitment to ethical governance and anti-corruption measures, conducting over 2,100 integrity talks and addressing corruption-related crimes [8]

Summary of China Life Insurance Conference Call Company Overview - **Company**: China Life Insurance - **Date**: April 1, 2025 Key Points Industry and Business Structure - In Q1 2025, China Life demonstrated strong performance in its business structure transformation, with the sales proportion of participating products exceeding 50% [3] - The company aims to gradually increase the share of participating insurance in new policies through product diversification, agent training, customer education, and differentiated evaluation mechanisms [3][5] - Long-term operational performance is emphasized over short-term results, aligning with the company's strategic focus on sustainable growth [3] Product Strategy - Participating insurance products are expected to have a different asset allocation compared to traditional insurance, allowing for higher equity asset allocation under the VFA measurement model [3][6] - The company is focusing on developing diverse retirement insurance products and comprehensive retirement services to meet market demand [7] - Risk management strategies include controlling the payment period of retirement annuities and selling participating retirement annuities to mitigate interest rate risks [8] Financial Performance and Risk Management - Participating insurance has advantages in liability costs and duration, contributing positively to overall business development [9] - The individual insurance channel's workforce is stable, with a focus on talent selection and basic management improvements through digital technology [10] - The company maintains a neutral and flexible asset allocation strategy in response to the downward trend in interest rates, prioritizing long-term debt securities [11] Dividend Strategy - China Life has a high dividend strategy with over 130 billion yuan allocated, achieving an average dividend yield exceeding 6% [3][14] - High dividend stocks are viewed as a stable investment, particularly in a declining interest rate environment, enhancing the stability of net investment returns [14] - The company is committed to optimizing its high dividend stock investment strategy, focusing on stable operations, sound corporate governance, reasonable market valuations, and high dividend yields [14][15] Alternative Investments - The company is exploring alternative investments to enhance overall account investment returns, particularly in the context of declining interest rates [17] - Investments in unlisted equity and other innovative products are part of the strategy to diversify and balance the equity portfolio [16][17] Future Outlook - The company anticipates an increase in the dividend level for 2024 compared to 2023, aligning with the characteristics of floating income products [18] - The profit from participating insurance primarily comes from interest spread and mortality difference, with a focus on sharing interest spread with customers [18] Hong Kong Market Strategy - China Life's Hong Kong stock allocation is primarily through the Stock Connect, focusing on new economy and high dividend opportunities [19] - The company is also attentive to QD quota issues and is increasing equity allocations in response to policies encouraging long-term capital market participation [19] Additional Insights - The company acknowledges the impact of conservative risk control assumptions on performance fluctuations, ensuring stable operations amid market uncertainties [12] - Adjustments to VFA assumptions will be considered based on industry conditions and regulatory compliance, but no immediate changes are guaranteed [13]

Group 1: Financial Performance - In 2024, the company achieved an operating income of 474 million yuan, representing a year-on-year growth of 4.37% [1] - The net profit attributable to shareholders was 7.114 million yuan, with a year-on-year increase of 5.93% [1] - The net cash flow from operating activities reached 51.686 million yuan, showing a significant year-on-year growth of 118.29% [1] Group 2: Industry Context - The global economic slowdown and increasing geopolitical risks are putting dual pressure on China's manufacturing sector, leading to demand contraction and rising costs [1] - The Chinese government is promoting high-end manufacturing, intelligent manufacturing, and green transformation, which provides direction for the development of the manufacturing industry [2] Group 3: Technological Advancements - The company is the first in the Asia-Pacific region to produce eleven-layer high-barrier film casting equipment, showcasing superior adaptability to various raw materials [3] - The company has developed advanced nine-layer co-extrusion and eleven-layer co-extrusion equipment that meets international advanced standards in efficiency, precision, and automation [2] Group 4: Environmental Initiatives - The company is involved in key national projects aimed at green transformation and technological innovation in agricultural film processing equipment [4] - The company has successfully developed various eco-friendly agricultural film production equipment, breaking the long-standing reliance on imports and demonstrating significant market validation [4] Group 5: Product Development - The company is enhancing its product matrix by developing strategic new models such as customized container liquid bag machines and high-barrier film machines [5] - The company is focusing on upgrading its film products and leveraging its manufacturing advantages to explore new directions and products in the film sector [5] Group 6: Market Expansion - The company's high-barrier soft packaging films have gained industry recognition for their excellent barrier properties and are being successfully marketed in regions such as Central Asia, South America, and Southeast Asia [6]

Core Viewpoint - China Life Insurance has made significant progress in its dividend policy for 2024, emphasizing a balance between shareholder interests and sustainable development [1][2]. Dividend Policy - The company plans to distribute a total dividend of 18.37 billion yuan, with a proposed dividend of 0.6 yuan per share, representing a substantial increase of 51% compared to 2023 [1]. - The decision-making process for dividends considers the long-term characteristics of life insurance, ensuring a smooth adjustment of dividend levels to mitigate the impact of short-term profit fluctuations [2]. Financial Performance - The company adheres to relevant regulations regarding dividend distribution while taking into account its profitability, volatility, and solvency, which are critical for its operational development [1][2]. - The emphasis on solvency indicates the need to reserve necessary funds for future growth and business opportunities, ultimately aiming to create more value for shareholders [1]. Long-term Strategy - The company aims to maintain stable dividend levels from a long-term perspective, ensuring consistent returns for shareholders despite short-term profit volatility [2]. - Future strategic initiatives are expected to enhance the company's value creation capabilities, allowing shareholders to benefit from the company's steady growth [2].

Core Viewpoint - The long-term care insurance, referred to as the "sixth insurance" of social security, aims to provide financial support for individuals in a state of long-term disability, particularly focusing on the elderly in rural areas [1][4]. Group 1: Service Implementation - The company collaborates with local medical insurance bureaus and various care institutions to create a comprehensive long-term care insurance service system, benefiting over 620 families [1][4]. - A dual-driven model of "grid-based investigation + digital empowerment" has been established to address the challenges faced by rural disabled individuals, resulting in the creation of dynamic health records for over 620 families [1][2]. Group 2: Tailored Care Solutions - In ancient towns, staff members record 23 daily living ability indicators for disabled individuals, while in coastal towns, customized care plans are developed for severely disabled elderly, effectively alleviating their families' caregiving and financial burdens [2][3]. - The company provides a multi-faceted service approach, including health monitoring, rehabilitation training, and psychological counseling, to support families facing dual caregiving crises [3][4]. Group 3: Community Support and Training - The company has invested in community welfare projects, donating care supplies to over 200 underprivileged families and conducting training for over 1,000 individuals in care skills [4]. - Initiatives such as health lectures have reached over 5,000 people, enhancing community awareness and support for long-term care insurance [4].

Investment Rating - The investment rating for the company is "Buy" and is maintained [8]. Core Views - The insurance industry is currently facing challenges on the asset side, but the company, as a pure life insurance provider, demonstrates strong sensitivity and elasticity, making it a recommended quality beta asset for allocation [2]. - The company's current stock price corresponds to a 2025 PEV of 0.70 times, which is at a historical low, leading to a continued recommendation for investment [2]. Summary by Sections Financial Performance - The company achieved a net profit attributable to shareholders of 106.94 billion yuan in 2024, representing a year-on-year increase of 108.9% [6]. - The value of new business grew by 24.3% year-on-year on a comparable basis [6]. Investment Returns - The company reported significant improvement in investment returns, with total and net investment yields of 5.5% and 3.47% respectively, showing notable improvement from the mid-year figures of 3.59% and 3.03% [11]. Embedded Value and Business Quality - The embedded value (EV) reached 1.4 trillion yuan in 2024, reflecting a year-on-year growth of 11.2%, which is relatively high within the industry [11]. - The company adjusted its economic assumptions for the value system cautiously, with the investment return rate lowered from 4.5% to 4.0% [11]. New Business Development - The new business value maintained a high growth rate, with a year-on-year increase of 24.3% in 2024, despite a slight decline from 25.1% in the previous quarter [11]. - The first-year premium growth rate was 5.8%, with a notable 14.3% increase in new policies with a term of ten years or more [11]. Workforce and Marketing Strategy - The individual insurance workforce stood at 615,000 by the end of 2024, showing a slight decrease from previous quarters, but productivity per capita improved with a 15% year-on-year increase in new policy premiums [11]. - The company is implementing a "seed plan" to explore new marketing models, which has shown initial success in 24 cities [11].