China Life Insurance (LFC)
James | Apr 04, 2009 | Comments View Comments
China Life Insurance Co. Ltd. (LFC)
China Life Insurance is a leading provider of individual life insurance products in China.
What I Like
With LFC share price currently at $53.05 its shows the company is on an uptrend when valued against the 50-Day Moving Average, which is $45.72. With a 52-Week High of $69.25 (May 08) and a 52-Week Low $33.45 the stock has seen the share of volatility that the markets have experienced. I foresee LFC rapidly expanding much like China is and grasping a larger portion of the market share as more Chinese individuals begin to purchase Life Insurance. With the increase of China’s individual GDP the amount of individuals who will be in need of Life Insurance will double offering LFC a golden opportunity. One thing China has is money right now, which they are willing to spend and boost the Chinese economy. Look for LFC to be a player and take in large amounts of capital as they continue to expand. Daily Volume is above 100,000, which is the threshold in which I set. The thing I like about LFC is it is still quite unknown and sheltered which makes it a great time to buy. As China continues its economic dominance more and more investors will be pursuing Chinese stocks and LFC will be one to benefit. It is only 6% institutionally held. Wait until the Hedge Funds find out about this stock, the share price will soar.
What I Don’t Like
Return on Assets 1.76% and Return on Equity 15.88% are lacking yet as Individual Insurance Sales begin to normalize with the strengthening of the overall global economy I look for these numbers to rise.
Overview
Overall LFC is a strong Chinese company with mass potential. There still have a large untapped market among the Chinese population, which makes it a very dangerous stock. LFC gets my BUY rating all the way up to $55. I foresee the stock ending the year at around $62-$64. Make sure you don’t miss your chance to ride the Chinese markets.
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Filed Under: Emerging Markets • Featured • Financials | Politics
