(LFC) China Life Insurance – ADR – Bear of the Day

China Life Insurance’s (LFC) third-quarter earnings witnessed a steep decline from the comparable period of last year. High surrenders, low premium income and increased impairment losses led to a decline in the net income, while increased unrealized losses in the investment portfolio led to reduced shareholders equity.

Additionally, China Life inherently faces substantial interest rate, market and currency risk. Although the company has a strong brand name, it has to deal with considerable competition on the domestic front, which limits earnings growth.

Overall, we expect some downside in the near term due to lack of any significant growth catalyst. The quantitative Zacks Rank for China Life is currently #4, indicating slight downward pressure on the ADRs over the near term.

CHINA LIFE INS (LFC): Free Stock Analysis Report

Zacks Investment Research

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