【Huaxi Non-Bank】China Life 2025 Annual Report Review: Strong growth in profit and NBV, Q4 investment faces short-term pressure

Event Overview

China Life released its 2025 annual report. In 2025, the company achieved a net profit attributable to shareholders of 154.078 billion yuan, an increase of 44.1% year-on-year; among them, the net profit attributable to shareholders in Q4 alone was a loss of 13.726 billion yuan (compared to a profit of 2.412 billion yuan in the same period of 2024), mainly due to adjustments in the capital market during the quarter, putting pressure on fair value changes and gains and losses. The net assets attributable to shareholders at the end of the period were 595.205 billion yuan, an increase of 16.8% from the beginning of the year, and a decrease of 4.9% from the end of Q3 2025; the weighted average ROE was 27.81%, an increase of 6.22 percentage points year-on-year. In 2025, the company’s embedded value reached 14.7 trillion yuan, an increase of 4.8% year-on-year; the value of new business reached 45.752 billion yuan, an increase of 35.7% year-on-year. The company intends to distribute a year-end cash dividend of 0.618 yuan per share (including tax) for 2025, along with the previously distributed interim cash dividend, totaling an annual cash dividend of 0.856 yuan per share (including tax) for 2024, amounting to approximately 24.195 billion yuan, accounting for 16% of the net profit attributable to shareholders; the corresponding dividend yields based on the closing prices of A/H shares on March 26 are 1.88%/3.51%.

Analysis and Judgment:

► The simultaneous increase in volume and price drives significant growth in NBV.

In 2025, the company achieved a new business value of 45.752 billion yuan, an increase of 35.7% year-on-year (with year-on-year growth rates for Q1/H1/Q1-3 of +4.8%/+20.3%/+41.8%, respectively). Breaking it down, the company’s new single premium in 2025 was 234.079 billion yuan, an increase of 9.3% year-on-year, with NBVM (new single premium caliber) increasing by 3.8 percentage points year-on-year to 19.5%, driven by the simultaneous increase in volume and price, resulting in good growth in the company’s NBV. By channel, in 2025, the individual insurance channel’s NBV increased by 25.5% year-on-year to 39.299 billion yuan, while other channels’ NBV increased by 169.3% year-on-year to 6.453 billion yuan (contributing an increase of 7 percentage points year-on-year to 14% of total NBV), which we expect is mainly due to strong growth in bancassurance performance. By the end of 2025, the company had 587,000 individual insurance sales personnel, a decrease of 4.6% year-on-year, and a decrease of 3.3% compared to the end of Q3; during the reporting period, the dividend insurance business achieved rapid growth, with its proportion of the company’s first-year regular premium surging to nearly 50%, becoming an important support for new single premiums. The growth in individual insurance channel NBV was mainly due to the improvement in channel profitability, with NBVM (new single premium caliber) increasing by 9.6 percentage points year-on-year to 35.9%, while new single premiums decreased by 8.1% year-on-year to 109.505 billion yuan. The bancassurance channel’s new single premium increased by 95.7% year-on-year to 58.506 billion yuan, contributing an increase of 11 percentage points year-on-year to 25% of total new single premiums.

► Total investment income significantly enhanced under a high base.

As of the end of the reporting period, the company’s investment assets reached 7,423.705 billion yuan, an increase of 12.3% from the beginning of the year. Among the investment assets, the allocation ratios of time deposits/bonds/stocks/funds changed compared to the beginning of the year by -0.99 percentage points/-1.68 percentage points/+3.67 percentage points/+1.04 percentage points to 5.64%/57.36%/11.25%/5.68%. Among them, the proportion of FVOCI in stocks increased by 15.8 percentage points year-on-year to 27.8%. In 2025, the company achieved total investment income/net investment income of 387.694 billion yuan/193.795 billion yuan, an increase of 25.8%/-1.0% year-on-year, with Q4 alone achieving total investment income of 19.143 billion yuan, a decrease of 59.1% year-on-year; the total investment income rate reached 6.09%, an increase of 0.6 percentage points year-on-year, achieving high growth on a high base.

Investment Recommendations

We remain optimistic about the continued improvement in the liability side of the company’s bancassurance quality and the product structure transformation driving value growth. Based on the company’s performance in 2025, we maintain the previous forecast for insurance service revenue for 2026-2027 at 220.5/230.4 billion yuan, with a new forecast of 239.1 billion yuan for 2028; we maintain the previous forecast for net profit attributable to shareholders for 2026-2027 at 130.4/133.3 billion yuan, with a new forecast of 135.0 billion yuan for 2028; we maintain the previous forecast for EPS for 2026-2027 at 4.61/4.72 yuan, with a new forecast of 4.78 yuan for 2028. Corresponding to the closing price of 37.73 yuan on March 26, 2026, the PEVs are 0.65/0.59/0.52 times, maintaining a “Buy” rating.

Risk Warning

Risks of significant fluctuations in the macro economy; risks of equity market volatility; risks of significant declines in interest rates.

Financial Statements and Key Financial Ratios

Note: The excerpts in this report are from publicly released research reports of Huaxi Securities Research Institute; for specific report content and relevant risk warnings, please refer to the full report.

Analyst: Luo Huizhou

Analyst Practice Number: S1120520070004

Securities Research Report: “【Huaxi Non-Bank】 China Life 2025 Annual Report Review: Strong Growth in Profit and NBV, Q4 Investment Under Short-Term Pressure”

Report Release Date: March 26, 2026

Analyst Commitment

The author holds a securities investment consulting practice qualification or equivalent professional competency awarded by the Securities Association of China, ensuring that the data used in the report comes from compliant channels, and the analysis logic is based on the author’s professional understanding, aiming for objectivity and fairness, with conclusions not influenced by any third party; this is hereby declared.

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