“Big Stocks” JPMorgan: China Life (02628.HK) profit beat far exceeds expectations, dividend payouts expected to bring pleasant surprises

J.P. Morgan released a research report. China Life (02628.HK) -0.460 (-1.607%); short selling $721 million; ratio 33.605%. The company issued a profit alert expecting interim net profit to increase year-on-year by about 215% to 235%, reaching approximately RMB 128.93B to RMB 137.12B, nearing the bank’s and the market’s full-year 2026 net profit forecast. The bank expects the share price to react positively in the near term, as the profit alert significantly exceeds expectations. However, given that most of the earnings growth is likely driven by investment income, it estimates investors will focus more on the room for a dividend increase. JPMorgan maintains a “Buy” rating on China Life, with a target price of HK$40.

JPMorgan pointed out that China Life showed strong first-half earnings supported by multiple factors, including strict asset-liability management, product diversification, liability cost control, and effective investment execution. The bank’s analysis shows that for every 10% rise in the CSI 300 index, the sensitivity of its 2026 market net profit forecast for China Life is 56%. This suggests that the first-half earnings performance not only reflects the rise in the stock market, but also indicates that China Life will deliver its first interim dividend in 2025. The interim dividend is RMB 0.238 per share, and the full-year dividend is RMB 0.86 per share, with payout ratios of 16% and 18% respectively. It believes that the market’s 2026 dividend per share forecast increasing only 5% year-on-year to RMB 0.89 per share is overly conservative. If China Life maintains a stable payout ratio, there is potential for the dividend per share to double this year, but the prerequisite is that the A-share market remains stable.

(gc/u)(Hong Kong stock quotes are delayed by at least fifteen minutes. Short selling data as of 2026-07-14 16:25.) Related content 《Broker Report》Merrill Lynch maintains China Life (02628.HK) “Buy” rating; expects new business value to continue outperforming peers