Title China Life (2823 TT) Buy, TP: NT$30
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Title:China Life (2823 TT) Buy, TP: NT$30
Download File:2823 TT China Life equity note 190911--sinopac.pdf 
 
Summary:Maintain Buy, TP of NT$30 (1x 2019F P/B): 1) China Life・s recurring yield is in an uptrend thanks to its increased positions of overseas bonds and TWD-denominated bond ETFs. We think China Life・s healthy spread structure is sustainable as the company reduces its declared rates on new policies; 2) China Life・s product mix makes its hedging cost more sensitive to FX change. Thanks to USD appreciation vs. the TWD and the lower cost of hedging instruments, China Life・s hedging costs are lower this year than in 2017 and 2018; 3) China Life・s valuation of 0.8x 2019F P/B is near the low end of its historical range of 0.8-1.5x. Considering its YTD ROE of ~11%, vs. peers・ ~9.5%, we set our TP at 1x 2019F P/B with a Buy rating.
  
Date:2019/09/10
Author:TaiwanResearch.com
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