Analysts reduced their financial forecasts for China Life Insurance Co Ltd (中國人壽保險) for this year, after the company reported lukewarm sequential earnings for last quarter.
Yuanta Securities Investment Consulting Co (元大投顧) slashed its earnings per share (EPS) estimate for the insurer by 9 percent for this year, and 6 percent for next year, while CIMB Group Holdings raised its expectations by 6 percent and 13 percent respectively.
The insurer reported that net income in the first quarter dipped 18 percent annually to NT$2.29 billion (US$70.4 million), and that its enterprise value had gained 15.1 percent annually to NT$183.6 billion.
Both of the brokerages left their “hold” recommendations unchanged.
“We do not see any share price catalyst as earnings this year are expected to decline due to macroeconomic headwinds, with weak market sentiment continuing to strain the valuations of the domestic life insurance sector,” Yuanta analyst Peggy Shih (施姵帆) said in a research note on Friday.
The company’s first quarter earnings were below Yuanta’s estimates, due to a 15 percent annual decline in investment income and a surge in provision expenses resulting from a 44 percent annual jump in first-year premium collections, Shih said.
The insurer’s investment return is also expected to be depressed by higher cost of liability this year, as there has been a rise in consumer demand for single-pay policies, despite efforts at promoting regular-pay policies, Shih said.
In a separate note published on Friday, CIMB Taipei-based analyst Nora Hou (侯乃鳳) said that China Life’s first quarterly results had exceeded its expectations, and had reached 39 percent of the brokerage’s full-year forecast, while the insurer’s stock price had consistently outperformed financial sector peers in most of the past 12 months.
However, Hou also raised concerns about China Life’s rapid expansion in single-pay traditional products, as well as low margin interest variable annuities.
Credit Suisse Group AG maintained its “outperform” rating, and also left its EPS forecast unchanged.
Credit Suisse Taiwan market strategist Chung Hsu (許忠維) said China Life was able to fully offset a NT$1 billion foreign-exchange loss caused by the weakening US dollar, due to better-than-expected fixed-income gains.
Hsu added that recurring yields in the first quarter improved 18 basis points on an annual basis as the company shifted about 60 percent of its total portfolio to overseas assets and bonds.
China Life chairman Alan Wang (王銘陽) said that the company has begun reporting monthly preliminary earnings, to allow for a better representation of actual performance in its share price.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Taiwan is open to joining a global liquefied natural gas (LNG) program if one is created, but on the condition that countries provide delivery even in a scenario where there is a conflict with China, an energy department official said yesterday. While Taiwan’s priority is to have enough LNG at home, the nation is open to exploring potential strategic reserves in other countries such as Japan or South Korea, Energy Administration Deputy Director-General Chen Chung-hsien (陳崇憲) said. While the LNG market does not have a global reserve for emergencies like that of oil, the concept has been raised a few times —
AI-FUELED DEMAND: The company has been benefiting from the skyrocketing prices for DRAM chips amid the AI frenzy, especially its core product — DDR4 DRAM chips DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday reported that its revenue for the first quarter surged 582.91 percent to NT$49.09 billion (US$1.54 billion) from NT$7.19 billion a year earlier, as the supply crunch caused chip price spikes. Last quarter’s figure is the highest on record. On a quarterly basis, revenue jumped 63.14 percent from NT$30.09 billion, the company said. In January, Nanya Technology expected global DRAM supply scarcity to continue through the first half of 2028, thanks to strong demand for artificial intelligence (AI) applications. Market researcher TrendForce Corp (集邦科技) forecast prices of standard DRAM chips would rise between 58 percent and 63
HIGHER PRICES: Given rising energy costs, CPC raised natural gas prices for generators by 41.58%, which Taipower said would raise its power generation costs by NT$10 billion State-run CPC Corp, Taiwan (CPC, 台灣中油) has activated its fourth naphtha cracker to boost ethylene supply, aiming to ease concerns over plastic material shortages amid tensions in the Middle East, the Ministry of Economic Affairs said yesterday. The move is expected to add 19,000 tonnes of supply this month and 30,000 tonnes next month, Deputy Minister of Economic Affairs Ho Chin-tsang (何晉滄) said at a meeting of the legislature’s Economics Committee in Taipei. CPC on Tuesday held talks with major polyethylene producers, including Formosa Plastics Corp (台塑), Asia Polymer Corp (亞聚) and USI Corp (台聚), and pledged to supply ethylene feedstock
RSS