China Life Insurance Valuation

Is LFCH.Y undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Below Fair Value
Significantly Below Fair Value
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of LFCH.Y when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: LFCH.Y ($6.21) is trading below our estimate of fair value ($20.96)

Significantly Below Fair Value: LFCH.Y is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for LFCH.Y?

Key metric: As LFCH.Y is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for LFCH.Y. This is calculated by dividing LFCH.Y's market cap by their current earnings.
What is LFCH.Y's PE Ratio?
PE Ratio	7.8x
Earnings	CN¥33.55b
Market Cap	CN¥722.01b

LFCH.Y key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1x
Enterprise Value/EBITDA	16.7x
PEG Ratio	0.4x

Price to Earnings Ratio vs Peers

How does LFCH.Y's PE Ratio compare to its peers?

The above table shows the PE ratio for LFCH.Y vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	12.9x
MET MetLife	16.6x	13.2%	US$57.2b
AFL Aflac	16.3x	-1.7%	US$61.2b
PRU Prudential Financial	11.1x	6.8%	US$44.2b
UNM Unum Group	7.8x	-3.9%	US$13.3b
LFCH.Y China Life Insurance	7.8x	18.5%	US$796.1b

Price-To-Earnings vs Peers: LFCH.Y is good value based on its Price-To-Earnings Ratio (7.8x) compared to the peer average (44.5x).

Price to Earnings Ratio vs Industry

How does LFCH.Y's PE Ratio compare vs other companies in the US Insurance Industry?

3 Companies	Price / Earnings	Estimated Growth	Market Cap
UTGN UTG	2x	n/a	US$89.08m
AORE.F American Overseas Group	2.1x	n/a	US$16.68m
CUII China United Insurance Service	0.0003x	n/a	US$3.13k

No more companies available in this PE range

3 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: LFCH.Y is good value based on its Price-To-Earnings Ratio (7.8x) compared to the US Insurance industry average (13.8x).

Price to Earnings Ratio vs Fair Ratio

What is LFCH.Y's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LFCH.Y PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	7.8x
Fair PE Ratio	17.1x

Price-To-Earnings vs Fair Ratio: LFCH.Y is good value based on its Price-To-Earnings Ratio (7.8x) compared to the estimated Fair Price-To-Earnings Ratio (17.1x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

Discover undervalued companies

Sagicor Financial

CA$874.2m

Provides insurance products and related financial services in Jamaica, Barbados, Trinidad, Tobago, other Caribbean region, and the United States.

SGCF.F

CA$4.46

-0.5%

Fairfax Financial Holdings

CA$42.8b

Through its subsidiaries, provides property and casualty insurance and reinsurance, and investment management services in the United States, Canada, Asia, and internationally.

FRFH.F

CA$1,401.10

2.2%

54.5%

Aviva

UK£12.8b

Provides various insurance, retirement, investment, and savings products in the United Kingdom, Ireland, Canada, and internationally.

AVVI.Y

UK£12.41

2.6%

16.3%