Release Date: March 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- China Life Insurance Co Ltd (CILJF, Financial) achieved a record high in gross investment yield, reaching RMB308.2 billion, up 150% year-on-year.
- The company's total assets grew by 16.7% year-on-year, reaching RMB6.77 trillion, indicating strong financial growth.
- Net profit attributable to equity holders reached RMB106.94 billion, a year-on-year increase of 131.6%, marking the highest level in the company's history.
- The company maintained a high solvency ratio, with a core solvency ratio of 453.34% and a comprehensive solvency ratio of 207.76%.
- China Life Insurance Co Ltd (CILJF) distributed a dividend of RMB0.65 per share for 2024, up 51.2% from the previous year, demonstrating a commitment to shareholder returns.
Negative Points
- The bond yield environment has been challenging, with high-quality assets in shortage, posing a challenge to long-term investment returns.
- The company's net asset value dropped by about 10% in Q3 due to new accounting standards, indicating volatility in financial reporting.
- Interest rate fluctuations have impacted the company's insurance service performance, particularly in Q4 2024.
- The company faces challenges in balancing short-term yield fluctuations with long-term sound investment strategies.
- Despite strong performance, the company acknowledges the need for continuous transformation to adapt to changing market environments and customer demands.
Q & A Highlights
Q: Over the past two years, the industry underwent a tremendous transformation. What is your view on the future direction and the potential of the industry for development?
A: (Xiliang Cai, Chairman) The Chinese economy targets a 5% growth rate, which supports sustainable growth in the life insurance industry. With a population exceeding 1.4 billion and a growing middle-income group, there is ample space for development. The demand for protection in health, pension, and wealth management is enormous, supported by vigorous policy initiatives. However, transforming potential market demand into realistic needs requires insurance companies to enhance technological innovation, risk management, and product and service innovation.
Q: Given the low interest rate environment, what is your view on asset allocation and measures to address interest rate challenges?
A: (Hui Liu, Board and Secretary) China Life has a solid basis for existing assets, with a diverse investment portfolio focusing on long-term debt and high dividend equity. We aim to extract more potential from traditional asset classes and innovate our investment approaches. We also rely on risk management to ensure security across cycles, leveraging our strong investment capabilities to deliver long-term value.
Q: What are the business trends observed in Q1 2025, and what is the outlook for the year?
A: (Mingguang Li, President) Q1 2025 has been special, with a focus on high-quality development and balancing multi-objective growth. We have diversified products and business formats, with floating rate products expanding rapidly. For the whole year, we aim to maintain steady growth in core indicators, promote value creation across channels, and enhance cost management and efficiency.
Q: What are the major driving forces behind the significant increase in investment yield in 2024?
A: (Hui Liu, Board and Secretary) The improvement is due to a diversified and sound investment portfolio, strategic long-term allocation, and seizing market opportunities. We achieved good returns across investment categories, balancing short-term fluctuations with long-term sound yield through dynamic asset allocation strategies.
Q: How will you balance short-term yield fluctuations and long-term sound investment in the context of promoting mid- and long-term fund allocation into the market?
A: (Hui Liu, Board and Secretary) We focus on building a sound large asset class structure, precise account investment strategies, and a balanced equity market portfolio. We aim to reduce asset volatility and boost long-term returns through dynamic adjustments and optimization strategies under new accounting standards.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
