After increasing their position, China Life Insurance made a huge profit of 154 billion yuan.

Ask AI · How can China Life’s counter-cyclical accumulation strategy seize market opportunities to achieve high returns?

On March 26, at the China Life earnings release conference, China Life Chairman Cai Xiliang used the phrase “full house red” to summarize China Life’s performance in 2025.

Cai Xiliang did not hesitate to offer praise, as China Life’s total premiums for 2025 exceeded 700 billion yuan for the first time, reaching 729.887 billion yuan, a year-on-year increase of 8.7%, with the growth rate hitting the highest level for the same period since 2018. It is worth mentioning that the company’s net profit attributable to shareholders reached 154.078 billion yuan, a year-on-year increase of 44.1%.

In absolute terms, based on a profit of 106.935 billion yuan in 2024, this means that in 2025, they earned 47.143 billion yuan more than in 2024.

Compared to the net profit of 21.11 billion yuan in 2023, in 2025, they earned 132.968 billion yuan more.

It can be said that over the past two complete years, China Life’s net profit has continuously “exploded,” setting historical highs. The “explosion” in net profit is closely related to China Life’s increased investment in equity assets over the past two years.

As early as 2024, China Life had increased its investment by more than 100 billion yuan throughout the year. In this regard, China Life’s Vice President and Secretary of the Board Liu Hui stated at the earnings release held on March 27, 2025, “We seized the two market lows below those since 2020 in 2024,” thus achieving relatively good comprehensive investment returns in 2024.

Looking at 2025, although Liu Hui did not specifically mention the “accumulation” situation at the performance explanation meeting held on March 26 this year, the financial report’s investment asset situation shows that in 2025, China Life’s accumulation scale is still significant.

First, the amount of “equity financial assets,” including stocks and funds, increased significantly from 1.269086 trillion yuan in 2024 to 1.676327 trillion yuan in 2025, an increase of 407.241 billion yuan. The proportion of “equity financial assets” in the overall investment assets also rose from 19.19% in 2024 to 22.57%.

In addition, the amount of stock holdings increased from 501.083 billion yuan in 2024 to 835.342 billion yuan in 2025, an increase of 334.259 billion yuan in one year; during the same period, fund holdings (excluding money market funds) also rose from 306.551 billion yuan to 421.842 billion yuan, an increase of 115.291 billion yuan.

Overall, the allocation ratio of stocks and funds rose from 12.18% at the end of 2024 to 16.89%. Regarding the reasons for the increase, China Life also stated that it was mainly due to the company’s decisive increase in equity investments by seizing market opportunities, significantly enhancing the scale of equity investments.

With the substantial accumulation of “equity financial assets,” China Life’s investment income has also risen significantly: total investment income reached 387.694 billion yuan, an increase of 79.443 billion yuan year-on-year, up 25.8%, with a total investment income rate of 6.09%, an increase of 59 basis points year-on-year.

In contrast to the significant increase in equity financial assets, the growth of China Life’s “fixed maturity financial assets” was relatively stable, rising from 4.911524 trillion yuan in 2024 to 5.234179 trillion yuan in 2025, an increase of 322.655 billion yuan.

Regarding the high growth of investment income for China Life in 2025, Vice President and Secretary of the Board Liu Hui summarized three points about the “investment tactical operations.”

First, firmly take long positions in Chinese assets to capture new productive forces’ alpha in the era. “During market downturns, we strategically increased the equity ratio by nearly 5 percentage points in 2025, with an overall investment scale exceeding 1.2 trillion yuan, especially focusing on technology stocks that represent China’s new productive forces.”

Second, adhere to long-termism and develop layout over the long term. “In recent years, we seized opportunities from high interest rates and large-scale issuance of long-term bonds, cross-cycle increasing the allocation of long-term bonds, and we have now accumulated 3 trillion yuan in long-term bonds, promoting a good duration match between assets and liabilities. During the interest rate decline, we timely increased the allocation of high-dividend stocks, constructing a diversified dividend portfolio.”

Third, conduct tactical adjustments and strategy optimizations flexibly. “In our equity investments in 2025, we seized structural opportunities in the market, capturing the main upward trend of growth style, with a TPR (total portfolio return) equity comprehensive investment yield of nearly 30%. In fixed income investments, we increased active management, enhancing returns.”

Although China Life achieved historical breakthroughs in overall performance in 2025, the net profit attributable to shareholders for the fourth quarter of 2025 was -13.726 billion yuan.

Regarding the quarterly loss, China Life President Li Mingguang stated that currently, most of the investment assets and insurance contract liabilities of life insurance companies are measured according to “current market value,” and changes in market value will be reflected in the income statement or the balance sheet. It is normal and customary for net profit and net assets to fluctuate with changes in market value. The negative profit for the fourth quarter of 2025 actually reflects the difference between the full-year result and the results of the first three quarters. The main reason is the structural adjustment in the capital market, where some of the stocks and funds held by the company experienced a pullback in the fourth quarter of 2025.

Li Mingguang also added: This kind of fluctuation is mostly temporary, reflecting changes in the capital market, which is a normal phenomenon. Unlike other industries, life insurance companies have long-cycle and cross-cycle operational characteristics. The asset-liability management of life insurance companies requires cross-cycle and long-cycle considerations. Our investments are value investments, long-term investments. Therefore, we advise everyone to reduce excessive interpretation of quarterly profits.

Performance needs to be viewed from a long-term perspective, and investment is the same.

Just a few days after China Life announced its financial report and held the performance explanation meeting, insurance stocks, including China Life, were experiencing a pullback. On March 26, China Life’s stock price fell by 4.43%. If we calculate from the historical high of the stock price on January 13, as of March 26, the stock price has retraced by 23.67%.

During the same period, New China Life’s stock price retraced by 20.37%, Ping An Insurance by 15.91%, China Pacific Insurance by 18.27%, and China Re by 20.82%.

In addition to the insurance stocks facing a pullback, some popular stocks have also seen declines recently. For instance, Kuaishou’s stock price retraced by 14.04% on March 26, and Pop Mart’s stock price retraced by 10.46%. From January 13 to March 26, Kuaishou’s stock price has retraced by 43.18%.

As Liu Hui mentioned at the earnings release conference, insurance investments require a perspective that spans 20, 30, or even 50 years. The flow does not compete for speed but for continuity; long-term capital and patient capital can withstand cycles in such depths of still waters and long-term persistence. For individual investors, how to navigate through cycles is also a key consideration.