Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

China Life Bolsters Revenue Base Despite Headwinds

Published 11/24/2016, 07:06 AM
Updated 07/09/2023, 06:31 AM

On Nov 23, we issued an updated research report on China Life Insurance Co. Ltd. (NYSE:LFC) .

Headquartered in Beijing, the company enjoys competitive leverage and strong enterprise value as the first Chinese insurance company to be listed in the New York Stock Exchange, the Hong Kong Stock Exchange and the Shanghai Stock Exchange.

The company’s strong fundamentals have also helped it carve out a niche in the global insurance market. The company’s financial flexibility, backed by its solid liquidity and commendable solvency, has not only made strategic investments possible but also retained the shareholders’ confidence on this stock.

Robust growth in premiums over the last few years has boosted the company’s revenue base substantially China Life further plans to invest more in business development initiatives in order to utilize the untapped opportunities of the insurance market. It intends to take corrective actions for better implementation of strategies on its sales force in order to accelerate business.

However, the persistently low interest rate has been adversely affecting the investment income of insurance players like Alleghany Corporation (NYSE:Y) , NMI Holdings, Inc. (NASDAQ:NMIH) and Arch Capital Group Ltd. (NASDAQ:ACGL) to name a few. China Life is no exception to this trend as it has also witnessed a decline of 43% in its net investment income in the first nine months of 2016.

Moreover, the slowdown in Chinese economy is a major headwind for the company as most its operations are confined to the nation itself. It also needs to strengthen its cost-management initiatives to avoid capital erosion. Persistently weak cash inflow further indicates the company’s waning operating efficiency.

China Life presently carries Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>



CHINA LIFE INS (LFC): Free Stock Analysis Report

ALLEGHANY CORP (Y): Free Stock Analysis Report

ARCH CAP GP LTD (ACGL): Free Stock Analysis Report

NMI HOLDINGS-A (NMIH): Free Stock Analysis Report

Original post

Zacks Investment Research

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.