Changjiang Securities: China Life Insurance's profitability is improving, with outstanding investment performance.

Changjiang Securities research report notes that PICC P&C's profitability is improving, with outstanding investment performance. In the first half of the year, the company achieved net profit attributable to shareholders of the parent company of 36.745 billion yuan, a year-on-year increase of 38.5%; it plans to distribute an interim dividend of 0.11 yuan per share, a year-on-year increase of 46.7%. Equity investments drove profit performance, while a decline in the expense ratio drove growth in P&C underwriting profit. Profitability in agricultural insurance, auto insurance, and liability insurance continued to improve. In terms of scale, auto insurance, accident and health insurance, agricultural insurance, and liability insurance remained the main sources of premium income in the first half of the year, among which accident and health insurance and liability insurance grew relatively well, increasing by 6.1% and 10.8% year-on-year, respectively. Individual insurance drove life insurance value growth, while bancassurance contributed new health insurance single premiums. The company plans to distribute an interim dividend of 0.11 yuan per share, a year-on-year increase of 46.7%, higher than profit growth. The report is bullish on the growth space brought by improved underwriting profitability and structural adjustment in life insurance. PICC P&C's insurance business relies on market position, business structure optimization, and expense control to enhance underwriting profitability; its life insurance business also continues to improve, and channel structure adjustment and the development of participating insurance are expected to continue yielding results. The report is bullish on performance growth and valuation upside potential brought by improvements at both the asset and liability ends.