China’s aging population has given rise to a “golden track” for pensions, with China Life and AMP being the biggest beneficiaries (J.P. Morgan)
A JP Morgan report pointed out that China’s aging population is creating long-term structural growth opportunities for the pension market.
A JP Morgan report pointed out that China’s aging population is creating long-term structural growth opportunities for the pension market. At present, the proportion of domestic pension assets in GDP is far lower than the average level of OECD countries, especially the third pillar personal pension has huge potential. China Life (601628/2628.HK) has deployed the entire industry chain through its CLPC platform and leads the management scale; its second largest shareholder AMP (AMP.AX) has also made considerable profit contributions. The market's attention to insurance companies may focus on the short-term cycle of property insurance or life insurance, but the expansion of pension demand brought about by the aging population is a neglected "golden track" of slow variables with a multi-decade dimension. One-sentence conclusion: While the market is still debating the quarterly results of insurance stocks, a decades-long pension dividend driven by the aging of 1.4 billion people is beginning. China Life and AMP are undoubtedly companies sitting on the "lode". Good/bad: Good for China Life (601628/2628.HK), AMP (AMP.AX), and financial institutions with pension management qualifications. In the market's valuation system for insurance companies, the long-term value of pension business may be too low. Catalysts: 1) Growth data in the number of personal pension account openings and deposit scale; 2) The government’s announcement on expanding pension tax preferential policies; 3) China Life’s investment progress in retirement communities and health management.