BROKER CALL China Life target price raised on strong investment yield.
Citigroup said it has raised the target price of China Life Insurance (HK 2628, SHA 601628) to 35.65 hkd from 30.50 while maintaining a ""buy"" call, citing improved investment yields and strong new-business growth for China's largest life insurer. ""We expect China Life's investment yield to further improve throughout the next 12 to 18 months, surpassing its long term investment yield assumption. With a strong cash balance, China Life investment yield should improve marginally faster than its peers,"" Citigroup analysts Bob Leung and Tracy Yu said in a research note. Citigroup also said China Life margins from new business will improve as it alters its product mix. ""Much of the new premiums sold in the first half 2007 have been longer-duration regular premium, which should continue to assist China Life in delivering a strong new-business margin,"" the investment bank noted. At 10:15 pm, China Life's shares in Hong Kong were up 0.7 hkd or 2.299 pct at 31.15 hkd.
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