New China Life Insurance Company Ltd. (601336) Earnings Call Transcript & Summary

We'd like to thank all the investor -- I'm [ Nuri Yong ] Assistant President -- I'm honored to be today's host. First of all, I'd like to introduce to you the senior management attending today. They are Mr. Yang Yucheng, Chairman of the [indiscernible] Mr. Gong Xingfeng, President and Financial Principal -- we are also honored to have independent directors to join us online. Today's conference consists of business presentation and Q&A. -- now let's start the presentation. Let's welcome Mr. Yang Yucheng.

For the distinguished investors, analysts and the media friends. Welcome to the [indiscernible] we are grateful for your long-standing attention and support for our company. In the first of 2026, we carried our solid earnings and education on upholding a correct outlook on political performance. bearing in mind the origination of finance of intonation and the people, we proactively integrated into the broaden national -- development agenda, followed a path of intensive high-quality development. [ Encoding ] development reinsurance services and investment and advance, professional market-oriented and the systematic reforms. With concentrated efforts on consolidating development foundation forging core competitive executing strategic key tasks, we achieved sustained improvement in operations and market competitiveness and comprehensive strengths was further enhanced. Multiple core indicators sustained sound growth on highway. The company showed multiple programs with more concrete base. Consolidated foundation, optimize the structure greater momentum and increasing efficiency, an outcome of dual advancement of volume and value and do optimization of structure and profitability were further highlighted in the first half of the year. The GWP reached up by [indiscernible] 6.9%. Operating revenue amounted to [indiscernible], up by 18.9%. NBV reached CNY 6.9 billion, up by 11.9%. Embedded value reached CNY 310.4 billion, growing by 7.8%. Total assets amounted to CNY 1.96 trillion, increasing by 3.1%. Net assets reached CNY 123.6 billion, up by 10.8%. Investment which stood still the test of capital market volatility and delivered solid results. Annualized total investment yield stood at 6.7%, up by 0.8 percentage points. driven by the dual momentum from core life insurance business and investment, our value creation capacity improved greatly. The net profit hit a new high of CNY z22.8 billion, surging 54% year-on-year. Committed to sharing operation gains with the investors, we propose to distribute an interim cash dividend at CNY 0.73 per share, representing a 9% year-on-year increase. In terms of overall performance, we achieved all funds growth in business scale and value, FYRP from long-term insurance growth by 27.7%. Among which the 10-year and above premium jump in our comprehensive growth, our and EV also increased a lot. For business structure, we concentrated our efforts on regular premium and the long-term business, delivering continued structure improvement. The proportion of regular premium business increased substantially, FYRP for long-term insurance accounted for 85.2%, up by 20.8 percentage points. The share of 10-year and above record premium rose by 3.9 percentage points. We step up transformation for participating insurance and our product mix has been optimized and has one greater recognition from customers. We strengthened institutional-based operations, we find closed-loop management and consolidated the long-term mechanism for quality management. Our 13-month persistency ratio reached 97.5%, 25-month persistency ratio hit 93.6%. The surrender rate came in at 0.7%, down by 0.1 percentage points. In the first half of the year, we thoroughly uphold the political nature and centers -- we stayed committed to during difficult advising and secured new breakthroughs in -- national strategies -- reform and key strategic priorities. We work many falls into 5 areas. One, we continue to play the role of 2 instruments and win this. Practically guaranteed and improved people's levels serve the real economy and they delivered a solid progress. Investment balances in the real economy exceeded CNY 1.4 trillion, up by 15%. Investment balance under the fire priorities in finance surpassed CNY 500 billion in technology finance, doing on the long-term nature of insurance capital. We scaled up long-term investment in Setec innovation, investments in relevant sectors exceeded CNY 220 billion and provide the protection of some assured over [ CNY 1 trillion ] for nearly 12,000 companies. For Green Finance, we actively built a service system of green insurance, green investments and green operation and participated in green projects currently energy, green consumption and other fields. With an investment balance exceeding CNY 110 billion. We offered protection of sum assured of more than CNY 310 billion to 6,700 prices. In inclusive finance, focusing on the protected groups and SME developments, our investment stood at nearly CNY 46 billion and underwrote 26 welfare projects. some total semesters exceeded CNY 1 trillion. In pension finance, we promoted deep integration between health care and easily care services. Investment in adage care and health care industry surpassed CNY 26 billion and the scale of enterprise and occupation annuities and the management further expanded. FYP from commercial, pension annuity individual pension and other business reached nearly CNY 8.7 billion. In digital finance, we stepped up efforts to build infrastructure and accelerate digital transformation. Investments exceeded CNY 100 million. We posted the online -- the growth of online insurance and provided protection of summer shares over CNY 420 billion. Also, we strengthened digital risk prevention control Second, we continue to practice the customer-centric strategy on all funds devoted to fulfilling on commitments for customers and provide in during protection grid health and later life, enjoying protection icing our commitment to long term -- and endeavor to consolidate the foundation for lifetime protection. We worked to strengthen product ration, improve product competitiveness diversified supply and build a multilevel and multifunction product system. Flexible combination enables us to satisfy customers' full life cycle needs. Also, we improved the product structure. Long-term and health protection products and established a diversified and balanced mix driven by the synergy of participating annuities, participating incremental life insurance. For improving claim settlement and fulfilling insurance responsibilities, we provided efficient whole process operations and services, upgraded the self-service claim function, enabling immediate training settlement and instant arrival of compensation. Special services, including advanced payments, medical expense early compensation for critical units and coverage for the diverse piece were provided. Total compensation reached CNY 7.29 billion with daily average amounting to CNY 40 billion which manifested the protection function of insurance. We empower the frontline agents with digital tools and tap into AI and digital technologies to support business expansion. The digital showcasing platform presented our comprehensive service system and increased the customer recognition and the brand credibility. To build an NCL for greater health, we deepen the coordination of medical and old-age care resources and build an integrated health security system. We advanced the innovative integration of health insurance and health management. The core as insurance pension financials in a deep integration of long-term capital management with medical care and outage care service ecosystem. We offered customers a one-stop solution of insurance, old-age care and medical services. We actively exclude the integrate growth model and created second, the growth curve, expanding the boundaries of health care services. And facilitate the front-loading of health management. We continue to cultivate service brands, including excellent medical care, health care and all edge care, excellent medical care provides customers with prevention, treatment and rehabilitation. The excellent health care promotive integration of insurance products and services. and the forms of service system covering treatment medicine recovery and care to forge NCL for a better life, we diversify the ecosystem supply to meet various demands for high-quality life. We upgraded the customer service and the management system, expand the layout of the old aged care service ecosystem, enriched full life cycle service and established competitiveness with differentiated customer service. We upgraded the 5 major service brands. The service ecosystem covers Five major sectors and the 16 core services. We have deployed 60 well health and -- care communities and 83 travel-based projects in road to provide diversified choices for our customers. Thirdly, we prioritize top driver desire deepen system and making reform remain committed to -- foundation for long-term benefits and boosting future momentum. And this internal development momentum. In house plan since the beginning of this year, we benchmark against the national business fare higher requirements can consider the reality of the company, accelerating the formulation of our 15 -- plants. So multiple discussions and scientific ags we developed and improved strategic planning system or on overall plan plus multiple supplies. Based on the version of building a first-class Chinese financial service group sent uninsured risk and the strategic direction of practicing a bit into philosophy and building a strong NCI. We implemented a customer-centric team based and employee partnership strategy advancing high-quality development. through professional and some planning and strong execution, strong high quarters. adhere to the strategy of strengthening the HQ reinforcing the middle tile and stable in the classrooms siltstones strengthen the mid-tire branch companies and stabilize and consolidated grass roots or and full-time institutions for a powerful NCI, we enhanced headquarter functions in policymaking technology construction and talent deployment guided by the position of headquarter for priming institutions for implementation. We have target measures to execution strength through strong high quarters robust branches, we upgraded the strong foundation project to working with the focus on empowering agents through office staff office. Rate -- rate-competitive through improved incentives in building operational financial management and target investments, we branched branch level growth momentum -- elite talents, we optimize structural talent refined incentive mechanisms in full and cable stock and outline even the talent redoing initiative, we further shore up our market realness also corporate property and embraced competent and staff absence build enduring mortality for the company's growth. effective synergies, we established a 1-year business in parent mechanism that provides company-wide support across all key business milestones. In the past, the only China departments delivered strategy briefing is that we now have share product training service ecosystem, operation and branding teams at cognitively and empower the grassroots. This leverages the corona strength of I often efficiency. We optimized financial resource allocation mechanism strengthened input ARPU efficiency, refine resource deployment in line with strategic priorities. Their results for long-term regular premium products and health insurance. We introduced a net profit evaluation system centered on profit performance to get branches to improve their efficiency. Cut out and improve efficiency through refined cost management while leveraging high-quality products of cost-effective ecosystem service. competitive base to our intent and tech enable operational tools to boost business growth and keep development. Fourth, we focused on strategic priorities and drove new results in key areas. Deep organization development and quality recruitment adhere to a strategic priority of putting the team first establish a routine organization development framework anchored on the basic launch supported by series of targeted programs for quality recruitment. Optimizing structure and solidified agent business, formulated 3-year plan for individual channel development and provide guidance for team building and store units. We launched a 30-year backing up -- National Thailand program provides customized growth environment and dedicated support for talents, helping them build cost of -- realized entrepreneurialship. We strengthen the organizational talent and capacity building in for and for tire institutions to enhance their it effectiveness. Practice modern -- in philosophy improved tire ecosystem management at a higher office rent office and agent level. to drive deeper integration or product plus services scenario plus technology care agents to transform from single product sellers to providers of follicular services, achieving new improvements in customer scale and business value. We make full efforts to strengthen the bank of channel, positioning it as 1 or 2 called channels and 2 coders top-level design improve institutional mechanism enhanced empowerment of the bank channel across products, training, operation and technology to form a 4-train support system, deepen cooperation with banks and focused on improving both the [indiscernible] the first half of this year, level premium from the bank channel reached a record high, contributing nearly half of the total value with some growth in both in size and productivity. Accelerate the development of core competitiveness in technology. Is there a data transformation at the strategic now priority in the 15th of February plan, aligning technology strategy with corporate development continue to increase resource in the technology. Fill a special group for IT application innovation, accelerate the implementation of innovative IT applications, promote cloud-based center construction advanced AI plus strategy accelerated application I like models across business areas drive the acceleration of digital intent transformation fifth, continues enhanced business resilience and long-term investment momentum, strengthening capabilities and diversified the strategies to solidify robust long-term investment strength. We pay attention to us availability matching pursuing dynamic balance in duration structure cost return on cash flow. Consolidating the foundation for long-term healthy and sustainable development, strengthen the research and investment capabilities of our team these macro drivers and the industry research to improve accuracy and force market adjustments. Talent is key to investment. During the first half of the year, we recruited the investor professionals both our core team and explore AI empowerment to inject trade thinking and professional threats into the business making optimized as allocating structure increased allocation to long-duration bonds at holdings and high-quality alternative assets, adjusted ratio of TPL and the gradual mix of dividend and tax sectors based on market conditions. In diversified investment strategies for the fixed income assets reading allocation to fund from portfolio type asset management products and risk to diversify return sources and improve investment returns. We actively increased investments in high-tech and new product sources in both primary and the sector markets focused on semiconductor new energy and about medicines support real come and grow with enterprises. In the first half of the year, we navigated severe global capital market volatility with solid professional have be a prudent investment strategies. Our investment yield has ranked among top in the industry for 3 years. 2026 marked the first year with the 15th bioplant anniversary of our company, our stuff has struggled with determination of hard work delivering an outstanding harperformance, achieving a strong start of the 15 strat that we applied or formation and accurate stronger momentum for the company's further growth. Looking ahead, we'll continue to fold our competitiveness in foreign assets. for using the guiding of part building and the parking compete for clean and upright plate ecosystem, keep spare professional IR alliance where we will lead a high-quality development with high-quality part building and go fully to the low or product committee in second direction managing the overall situation and ensure implementation we will continue to improve the -- judgment, put understanding and fleet execution employees at all life wear transform the market, political and organization strength into the advantages for reform and development we will uphold the culture as a sale of the company, foster a corporate culture that values customers had work openings inclusiveness and ability to act and achieve your practice perish professional arm and for the new aero culture into CRA's most indie competitiveness and grading force back at 2 strategic planning deep institutional reform and optimize resource allocation will remain grounded in the presence we plan for future strengthen internal strength and enhance our strategic leadership promoted accumulation of the company's 1 plus [ 16-, 17-year ] plan, had aprotinin the end. it will closely align with strategic has business development and market changes. Long professional market already anti-systemic reform to the difficult thing break down institutional barriers at a single development, optimize incentive and consuming and performance evaluation system. We'll -- into once NCI and continue to deepen the ordinate development of insurance plus service plus investment to enhance the comprehensive strength, leverage the synergy of NCI driving the company's transformation from individual efforts to coordinated corporates will deepen our customer services and improve this solid new power channel and can dewater or bank and individual insurance consolidated foundational traditional business while expanding insurance and on subsidized insurance and Internet business. We will enhance comprehensive customer service and management capabilities. On the investment front, we will continue to strengthen investment profitability and diversify investment strategies. Build investment ecosystem in -- coronation creates a long-term stable value for focused on strategic areas, increased investments established and consolidated new advantages and achieve breakthroughs and saving development. We'll continue to deepen the strong high quarter strategy, leveraging a strong high quarter to drive the excellence of our institutions, we cater into a strong foundation project. strengthen organizational talent and capability development acquire investment in glass roots. We will continue to dose serving ecosystem, open up phase for the leap across medium and high asset orders in health and care. Keep increase in investments in technology and AI accelerating the comprehensive application with AI, big data and other technologies across Thailand products, service investment is there to build a digital intelligence and into I stress organizational capability building and continue to deepen the development of learning-oriented service empowering and research-driven organization. Faster atmosphere of data and lifelong learning. Persisting empowering customer teams and employee food service, establish a professional standardized refined on comprehensive service empowerment system. In core branches at all levels to see market and completion entrusted their knowledge into policy to method and business results in house the company's innovation capabilities, the dramatic organizational capability and service support capability. As a new starting point of our [indiscernible] I look forward to the future. After 3 -- development, we have built a stronger foundation enhance our stress and to appoint and achieve small stable operations in this first year [ 15 serial ] and this milestone year marching authorities is energy of our company. We once again delivered outstanding interim results on top of 2 consecutive years of high growth. there's also substantial growth, substantial gift to color progress. Looking ahead, we are full of confidence and the drive that private performance will continue to carry out the spirit of NCI professional and Army. We will impact on a new journey of 15-year plate resolved and hire. We will open a new chapter of more high-quality development and contributes NCI's to serving transfer modernization and the building of financial power. That is the end of the presentation. Thank you.

[Operator Instructions]. Now let's welcome the first question.

Thank you. Thank you for your presentation. I'm with social securities. First of all, congratulations on your performance. And I have 2 questions. The first is about the liabilities and the second is about the investment. The first question against the higher base built in the previous years, you have made a great improvement in your regular premium and NBV. So what do you think are the key drivers behind this performance. the third quarter has passed, and we have a very high base now. What is your outlook for the full year growth rate and the business structure. And the second question about investments. We see you have made great investment return in the first half of the year, leading industrial peers. Can you elaborate on the investment assessment magnism, especially the regulatory requirements for long-term assessment on investment. How do you secure mid- to long-term return?

Mr. Gong will answer your first question.

Thank you for your question. In the first half of the year, we focused on life insurance, investments and services. improved our customer center corporation and service capacity. In Life Insurance main business. the regular premiums, tenure and above premiums all sustained good growth momentum. These results are a hard one. And at this standing point of our 30th anniversary, we are grateful for our customers and to pay back our customers we will continue to build up on this performance. I'd like to share with you my views on this we increased through our team building. In the first half of the year, our team building has increased its quality and quantity. No matter in the high-performing team in the individual team or the type of -- or the performing team in the bancassurance channel. Our productivity also improved. So this the team base has contributed to our business performance. The second is our channels on our growing investment in our individual channel, we also elevated the strategic level of the bancassurance channel and from the dual co-channel and -- driver strategy. This strategy has delivered solid results. The individual and bancassurance channels recorded CNY 17.7 billion and CNY 14.6 billion, up by 24% and 32%, respectively. The third is management empowerment. We strengthened diversified product supply, improve our structure. And based on the strong foundation initiative, 3.0, we improved our capabilities and strengthen both the office team and the agent team to build strong teams with strong units, through this improvement of management, the how time flies. And this -- we have now at the end of the August. We are confident that we can fulfill the full year plan and the tasks for our growth. we will keep following the path of the increase of volume and value and improvement of structure and quality. And the focus on the key drivers of productivity, follow the product plus service such technology, more than marketing concepts continue to improve our product structure, improve team productivity and focus our efforts more on long-term and high-value business. Through this effort, we are confident that we can sustain this good growth momentum and consolidate our past achievements.

Thank you, Mr. Gong. First, I'd like to thank you for your question. Thank you for your recognition call, NCIM, in the first half of the year, we delivered a strong performance set long-term investment philosophy and upgrade our evaluation mechanism from 3 points view. First, we align our evaluation with long tense cycles from multiple evaluation indicators. Make our investment different more forward-looking. We have multiple indicators with 1 year to a year and 5-year metrics. Second, we saw some value when designing the evaluation in the -- we finance the absolute insurance relative performance and risk control with strong anion sustainable profitability and stable operations. So we keep our remote dynamic metric positive shifts and the market changes that will assess the criteria needed for markets for strategy investment. We make the evaluation dynamic. This is very important for us to achieve the annual and long-term goal to sum it up the evaluation system on CI is in line with the national strategies and our high-quality development goals.

Thank you. Thank you. Now let's welcome the next question.

I'm with China Banking Insurance renews. Since the implementation of the report conduct alignment on in 2024, we have seen that the NBV of the channel has been growing, but industrial competition has also been getting more fierce. And the regulators issued the new roles to strengthen refined cost management of the channel. What impacts do you think will the new roles bring to your company? And what are the development strategies of your bank insurance channel against this background?

Mr. Wan, why don't you answer this question.

The document #65 focuses on refined fee management. And post every link accountable emphasizes on the authenticity and the compliance of fee utilization and it drives more standard and organized bancassurance competition. Renewables set higher standards and for the cost of control, professional service and compliant operation for insurance companies. The new rules specified the regulatory bottom line. It will be an important measure to advance high-quality developments of the China's bancassurance market. The impact on our company are as follows: the first is it will create a key opportunity for us to improve quality and efficiency. To comply with the rules, we need to strengthen refined fee management and which will increase the value contribution of the channel and further promote cross departmental synergy. And the guide towards customer needs in terms of our product innovation and build a differentiated competitiveness, so as to provide a better service and greater value for our customers. The second is -- the rules will promote comprehensive upgrade of our operational model. The rules encourage us to give us an important opportunity to deepen our development of this channel. The refined cost management will help us to improve our competitiveness, but we are also reap more competition added by the new rules. We will deepen the coordinated development of insurance service and investments. And this will bring us bring conference channel great growth potential and towards a higher level and higher quality development. In recent years, our bancassurance channel has maintained robust growth momentum and has become a major engine driving our scale and value growth. In the first half of the year, our company's product committee prioritize the long-term investment, long-term development and established dual-call channel and the decoder strategy. which elevated a strategic role of the bancassurance channel. And the journey speak to a core channel. The bancassurance channel will follow the strategy of making progress while maintaining stability so as to achieve stable operation with progress. First, the strategic positioning has become more clarified. We conducted strategic research on the new roles and have multiple rounds of special sessions. After elevating the channel to a strategic level last year, we further. In the first half of this year, reinforced this position as a core channel. In May, we established bancassurance channel leading group for the strategic development and also established leadership from other peers. We have formed top-down synergies, which demonstrated our clear strategic resources. The second is our economic environment will be more concrete. We will continue to advance technology, operation and ecosystem empowerment. We will continue to improve the service quality, efficiency and the capacity of the channel. Based on the 10 ecosystems, company medical care, health care, et cetera, this will satisfy our customers' needs for diversified protection and wealth management across their life cycles, we will continue to forge differentiated competitive advantages to better facilitate the development after bancassurance channel. The third is the responsibilities will be informed more effectively. We will strengthen assessment-driven guidance to make sure the provincial branches. The central branches and the fourth key outlets will share their responsibilities. We will advance the strong foundation initiative and extend services to lower-tier markets through business review process supervision and cost of management. we will make sure the strategic arrangements are implemented and operational tasks for view. On this basis, we will leverage our advantages in investments, deepen strategic partnership, accelerate deployment in high net worth on the private banking improve our product supply, sales skills and the service capability to inject more growth momentum. In summary, we will -- these opportunities amid market turbulence for the NCI brands stabilized scale, improve structure, upgrade value and strengthen compliance to make concerted efforts to celebrate the 30th anniversary with outstanding business performance.

Thank you for the opportunity I'm from Citi Securities. I have 2 questions. The first on asset level, we see an impressive investment performance in Q2. I'd like to know how would you see the active market trend in the future? In the car loan interest environment, what are the allocation expenses for fixed income assets and equity with a more strategy for alternative investments. My second question is about the liability side. I'd like to know what are your team building structure for individual channel. How would you plan to import the team and achieve sustainable growth?

Please have [indiscernible]. Welcome Ms. Tina answer the first question.

Thank you for your interest in NCI. market, we believe the short-term avoratility won't change the long-term positive trend, we are fully optimistic about China's capital markets. on the fundamental side, our economy in the face of transformation operating our growth rate still leads among major economies. Corporate earnings are stabilized and picking up of which have been -- have provided a solid base for active investment in China. In terms of liquidity and front flows our market policy remains moderately account and the low interest rate environment has selecting reallocation demand and medium- to long-term capital represented by -- capital, stable long-term incremental money to the market. On the one hand, we believe now there are a number of quality dividend NIMs attractive for insurance allocation. On the other hand, we are ripe attention to the opportunities brought by new productive forces, especially the new lead by AI will target follows second, our allocation strategy, mistake to free principles as a bit mentioned our allocation and absolute term focus. We build a portfolio for fixed income. We increased long duration with enough cash flow quarter and fixed income assets. build a solid turn foundation. On the other hand, we guided by the general direction, increased our flexibility of the portfolios. You just mentioned the alternative We made certain efforts in this regard. We are making progress and increase our exposure to alternative capture quality assets and being excessive returns. In the future, we will improve our risk investment research capabilities and risk control capabilities improved returns, reward investors and shareholders with reference.

[indiscernible] will answer the second question.

To summarize our individual channel feature, I would say it is the team is the foundation. It is not only a slogan. It is our practical implementation, showing our development concept and where our competitiveness life. Specifically, we guided by the corporate culture to build specialized professional and our Iran teams. These are the orientation of our team building. we have established organizational system to establish a strong team with good service quality and competence. In the first half of the year, in our individual team building, we have made a run breakthroughs. In regular recruitment, high-performing team development and high-performing team with strong units. These are the 3 priorities of the channel. The channel recorded 20,000 new recruits with Mount new recruits steadily staying above 3,000. High-performing team development delivered notable results with an increase of 16% and the average productivity increased by 18%. The standard units doubled the number. This shows how we see the team at our foundation to promote our development of the separate LP team. This year marks the 30th anniversary of our company. undertaking this opportunity, we have started an important campaign in lighting 30 cities for the 30th anniversary. To date, we have 30 branches that have held their recruitment events which are widely attracted many talents to join our team in the future. We will switch focus and extend the events to lower outlets to host this conference in more cities and attract more talent to join our company. You may ask -- how will we cultivate this talent and retain them. This is also what we need to answer for the TIM Foundation. And for this, we build comprehensive empowerment via 4 platforms for them to grow and to stay. The first is the workplace platform. We have the best workplace for the agent team, and they established the [ Shinhan ] meeting place and a series of workplaces. To provide our agent team and customers with a good place to top face-to-face. The second is the scenario platform. As the insurance business are becoming more complicated, how can we better explain our business to our customers. We have established a set of scenario system to help customers to better understand how were insurance companies will provide them with better services in old edge care and other services. The third is the training platform. We expanded our classes to our talent and the focus on the new crudes, high-performing teams to provide them with a series of growth system. We formalized the standards and enforce the strict requirements we built a standardized training platform with full coverage so that our customers and the agent team can share our resources in this ecosystem. The third is -- the fourth is the ecosystem platform. which combines the ecosystem of the company and the personal ecosystem, mainly ecosystem after agent teams -- this is my answer. Thank you. question. We know adheres to a diversified investment strategy. In the first half of the year, what have you do -- what progress have you made in response to the core for medium and long-term capital to enter the market.