China Life's H2 NBV Growth Was Weaker Than Expected; Dividend Payment Missed

We lower our fair value estimate for China Life to HKD 20 per H-share after its 2022 results, reflecting lower projections for new business value growth and investment returns in 2023. The results were weaker than expected, with full-year 2022 total revenue and net profit growth declining 3.8% and 37% respectively from 2021. The profit decline was mainly driven by sharply lower realized investment gains. NBV declined 20% from 2021. The contraction was smaller than peers including Ping An and CPIC, but still misses our expectation for sub-20% growth. Decelerating NBV growth in the fourth quarter was due to heightened coronavirus restrictions and shifting focus to preparations for its 2023 New Year sales campaign. The fourth quarter also saw a wider quarter-on-quarter contraction in agent headcount to 7% from about 5% in the first three quarters of 2022.