[ET Net News Agency, 4 February 2020] Daiwa Research lowered its target price for China
Life Insurance (02628) to HK$28 from HK$30 and maintained its "buy" rating.
The research house said a reduction in face-to-face activities hurts agency distribution
and training and may affect agent headcount in the next few months due to lower
productivity and recruitment.
During SARS, China saw life insurance premium growth moderate to 25% during March-May
2003 from 50% in the first two months of 2003. China Life is less affected than other
listed China life insurers as its agency FYP (first year premium) APE (annual premium
equivalent), though growing fast, was 75% of total FYP APE in 1H 2019, the lowest among
peers.
Daiwa estimated a 2% VNB (value of new business) impact for the industry and a 1% VNB
impact for China Life for 2020. It trimmed its 2020 VNB growth by 1% due to the outbreak
and factor in lower investment income, resulting in 1-16% cuts to its 2020-21 EPS. (KL)