New China Life Earnings: Investment Gains Boost Net Profit, but Agent Channel Pressured

New China Life Insurance's first-quarter IFRS 17-based total revenue and net profit increased 17% and 115%, respectively, year on year. The strong profit growth was mainly attributable to the 48% year-on-year increase in investment income as a higher proportion of investment assets were marked to market, which recorded fair value gains in the past quarter under the adoption of IFRS 9. The company did not disclose first-quarter new business value, and we retain our view that its NBV growth in 2023 still faces greater-than-peer pressures as agent headcount has yet to stabilize. Given that the results were largely in line, we retain our fair value estimate for no-moat New China Life at HKD 26 per H share and CNY 23 per A share. We think the market’s pessimism is fully reflected in the H share price, at below 0.2 times 2023 embedded value, but we don’t see any urgency to invest with earnings performance likely to lag peers in 2023.