Credit Suisse raised its target price for China Life (02628) to HK$27 from HK$26 and maintained its "outperform" rating.
China Life issued a positive profit alert. The research house forecast VNB (value of new business) growth of 19% in 9-month, implying a double-digit rise in 3Q. For 2019, Credit Suisse estimated 18% VNB growth, implying a double-digit increase in 2H.
It noted that the excellent earnings were driven by (1) significant growth of investment
income, particularly in equities, (2) one-off tax write back Rmb5bn.
Credit Suisse raised its 2019-21 EPS forecasts by 41%/7%/7%, respectively, after factoring in strong earnings year-to-date and better investment performance on enhanced
capability.
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