Morgan Stanley: Maintains "overweight" rating on China Life Insurance (02628), expects new business value to continue outperforming industry peers.

Morgan Stanley released a research report stating that China Life Insurance (02628) is expected to achieve a net profit of 128.9 billion to 137.1 billion RMB in the first half of the year, a year-on-year increase of 215% to 235%, with an annualized return on equity of about 40%, outperforming its peers; which means net profit in the second quarter is expected to reach 109.4 billion to 117.6 billion RMB, a year-on-year increase of about 800% to 900%. Morgan Stanley maintains a "overweight" rating for China Life's H shares with a target price of HK$38.9, believing that the valuation of H shares is still attractive and the fundamentals are improving. The bank believes that a more aggressive growth-oriented allocation and outperformance of technology stocks in the second quarter have driven strong investment performance in the period, leading to a positive performance for China Life in the first half of the year. It is predicted that the new business value of China Life in the first half of the year will increase by more than 30%, continuing to outperform its peers. Although insurance sales in the second quarter generally slowed down, the bank still believes that China Life's mid-term performance will be impressive.