The Value Research Of Listed Company "China Life"

With the establishment and propulsion of China’s market economicsystem, the scientific and rational business valuation is taken into thestage. It fulfills what the market economy and modern managementsystem requires for the enterprise. Business Valuation has been developedfor a long-term in Western countries. Business valuation came into beingwith the emergence of the equity market in early1950s. With theadequate research and development, its theoretical studies have beenmore mature and it has also been widely used in practice. In our country,the research on business valuation started late, hindered by the immaturecapital market which affects business valuation put in practice.Nevertheless, it is undeniable that the business valuation can play animportant role in the assessment and management of modern enterprises-the existing data can not only reflect the corporate history but can assessthe current information and even outlook the future. It provides managerswith an important basis to formulate development strategies and decision-making. It also offers important investment analysis andinvestment decision-making channels for investors.Insurance industry, as special financial industry, bears a lot ofattention due to its business nature, operation mode, trend fordevelopment. In the past decade, the insurance industry has beendeveloped rapidly. It received a lot of attention with the demand of theconsumer market and the growth trend of premium income. In addition,in recent years, the public is attention to research Ping An InsuranceCompany of China，Ltd, because of it is a group’s overall listing.However, the attention of China Life which only shares of life insurancebusiness and investment business is smaller. Hence, in this article, weselected China Life Insurance Co., Ltd., a state-owned and one of theworld’s top500, for study. We will analysis its business, financialcondition and its enterprise value.This article will cut through by analyzing the particularity of theinsurance industry report, which enables readers to analyze the businesssituation and the financial situation of the China Life Insurance CompanyLimited, with the premise understanding of the difference of the reportbetween the insurance industry and other industries. Next, we will useRIM Residual Income Valuation Model and Dividend Discount Modelfor the value of the net assets available for sale to access the valuation ofthe insurance business and investment business of China Life Insurance Company Limited, respectively. Weight analysis will be alsoimplemented to access the overall valuation of the company. Conclusionand suggestions will be carried out based on the outcome of thedifference between the enterprise value and the company’s share price，come to China Life’s intrinsic value is higher than its performance in themarket value and higher than the market price of the18yuan per sharerecently.