CHINA LIFE profit soars up to 235% in 1H26, far exceeding forecasts

Key Takeaways:

• 1H26 net profit seen at RMB129-137 billion, up 215%-235% YoY
• 2Q26 net profit surged 8-8.7x YoY to RMB109-118 billion
• UBS raised 2026 net profit forecast by 37%, reiterated Buy rating

CHINA LIFE (2628.HK) expects first-half 2026 net profit of RMB129 billion to RMB137 billion, up 215 percent to 235 percent from a year earlier, far surpassing both buy-side expectations and the market's full-year consensus of RMB126 billion.

"The positive profit alert far exceeded expectations," UBS analyst said in a research report. The broker noted that the surge was driven by strong investment income growth and improvement in insurance service results.

Second-quarter net profit jumped 8 times to 8.7 times YoY to RMB109 billion to RMB118 billion, UBS estimated. However, the insurer's value of new business momentum showed signs of cooling, with first-half VNB rising 33 percent YoY, slowing from the 76 percent growth in the first quarter.

UBS raised its full-year 2026 net profit forecast for CHINA LIFE by 37 percent to reflect the interim profit alert and the macro environment so far in the second half. The broker reiterated its Buy rating on the stock while maintaining its H-share target price at HKD40.

The massive earnings beat signals a robust recovery in China's insurance sector, driven by a rebound in equity markets and improving investment returns. Investors will watch for the company's interim report for details on dividend payout and updated VNB guidance, which could provide further catalysts for the stock.