An insurance company generating a profit of 130 billion yuan from stock investments in just half a year is a remarkable feat that many may not have witnessed.

The recent performance forecast from China Life Insurance Company Limited (SSE: 601628) has captured significant market attention.

As a major insurer, the company anticipates its net profit attributable to shareholders for the first half of the year to be between 128.933 billion yuan and 137.119 billion yuan, representing a staggering year-on-year increase of 215% to 235%.

Key Driver of Performance

According to the company, the growth in investment returns is a primary factor behind the strong performance.

The interim report has not been officially released, so the detailed breakdown of how the company achieved this over one hundred billion yuan in profit remains undisclosed.

However, the company's precise divestment of shares in GigaDevice Semiconductor just before a significant market downturn provided a notable demonstration of its market timing.

Precise Exit from a Top Performer

The recent sharp decline in technology stocks resulted in substantial losses for many investors.

Yet, some institutions managed to time the market perfectly and exit at a peak.

On July 20, China Life Insurance Company Limited (SSE: 601628) posted eight announcements on its website regarding related-party transaction disclosures, all concerning the sale of GigaDevice Semiconductor stock.

Based on these announcements, the company, through its various investment products, sold approximately 1.11 million shares of GigaDevice on July 8.

The average selling price was 615.9 yuan per share, resulting in total proceeds of about 682 million yuan.

GigaDevice, a leading domestic memory design company, has been a star performer in the capital markets this year.

On June 29, its share price surged to a high of 846.66 yuan, marking a near 300% increase from the start of the year.

Following this peak, technology stocks entered a correction phase, with GigaDevice experiencing a pullback of over 40%. Remarkably, the insurer's sale on July 8 occurred when the stock had retreated only about 20% from its all-time high, still near its peak valuation, showcasing a well-timed exit.

After July 8, GigaDevice underwent another sharp correction, with three跌停 (limit-down) sessions occurring within just nine trading days.

By July 21, even after a涨停 (limit-up) session, the share price had fallen to 475.53 yuan.

This divestment was executed through several asset management plans established in cooperation with fund management companies.

The company disclosed the transaction separately because one of its independent directors, Chen Jie, also serves as an independent director for GigaDevice, creating a related-party relationship.

This very disclosure allowed the market to observe the insurer's precise equity trading capabilities.

Prior to this sale, the company had also disclosed information regarding its purchases of GigaDevice stock.

For instance, the asset management plan that sold 226,200 shares at 612.72 yuan per share had previously purchased GigaDevice shares on April 2, 2025, at a price of 118.57 yuan per share.

Based on these prices, this single transaction generated an unrealized gain exceeding 400%.

Profits Point to Broader Investment Skill

The transaction involving GigaDevice represents only a fraction of the insurer's overall investment prowess.

On July 14, China Life Insurance Company Limited (SSE: 601628) released its interim performance forecast for 2026, projecting a net profit attributable to shareholders between 128.933 billion yuan and 137.119 billion yuan for the first half.

Compared with the same period in 2025, this represents an increase of approximately 88.002 billion to 96.188 billion yuan, or growth of about 215% to 235%.

To contextualize this figure: in the full year of 2025, only ten A-share listed companies reported annual profits exceeding 100 billion yuan. Excluding the four major state-owned banks, no other A-share company achieved a full-year profit above 200 billion yuan.

China Life Insurance Company Limited (SSE: 601628) has now reached a net profit of around 130 billion yuan in just six months.

Regarding the reasons for the profit surge, the company's announcement was not overly explicit, merely stating that "the company's asset allocation continued to be optimized, its布局 in areas like new quality productive forces progressed steadily, and it achieved sound investment performance."

However, based on its 2025 annual report, the increase in investment income was the core driver of its performance growth.

In 2025, the company's total investment income reached 387.694 billion yuan, nearly 80 billion yuan higher than in 2024.

The largest contributor was gains from the disposal of investment assets, which amounted to 132.951 billion yuan, a significant turnaround from a loss of 4.245 billion yuan in 2024.

The total investment yield for 2025 was 6.09%, a noticeable improvement from 5.5% in 2024 and also significantly higher than the average total investment yield of 4.76% from 2023 to 2025.

Considering that the majority of the insurer's investments are in fixed-income products, this return level is quite substantial.

The impressive interim report for the first half of this year suggests that the company's investment yield may climb to an even higher level.

For comparison, another major A-share insurer, New China Life Insurance, forecast its first-half net profit attributable to shareholders to be between 20.719 billion yuan and 23.678 billion yuan, representing year-on-year growth of 40% to 60%.

Other major insurers did not issue performance forecasts, implying their results are unlikely to show unexpected significant changes.

Corporate Outlook on Equity Markets

Recent volatility in the A-share market has been pronounced.

On July 19, two central state-owned enterprises, China Reform Holdings and China Chengtong Holdings, announced plans to increase their holdings of A-shares. Several other A-share companies have recently announced share buybacks or increased holdings by major shareholders.

Institutional confidence in the A-share market is evident.

Insurance funds are significant market participants, making insurers' market insights and judgments crucial.

In July of last year, the Ministry of Finance issued a notice guiding insurance funds towards long-term, stable investment and strengthening the long-cycle assessment of state-owned commercial insurance companies.

The notice explicitly stated that state-owned commercial insurers should focus on稳健经营 (prudent operation), adhere to long-term, value, and稳健 investment principles, improve internal medium-to-long-term assessment mechanisms, strive to enhance long-term stable returns, better leverage the role of insurance funds as "ballast" in the form of long-term and patient capital, and actively support the high-quality development of the real economy.

Financial reports indicate that the investment scale of China Life Insurance Company Limited (SSE: 601628) has been increasing annually.

In 2025, the company's investment asset规模 reached approximately 7.42 trillion yuan, about 800 billion yuan higher than in 2024. The figures were 5.06 trillion yuan in 2022 and 5.67 trillion yuan in 2023.

Clearly, the insurer is channeling more insurance funds into the market.

Regarding asset allocation in 2025, out of the total 7.42 trillion yuan in investments, 5.23 trillion yuan was allocated to relatively stable fixed-maturity financial assets, primarily bonds.

Investments in stocks amounted to 835.3 billion yuan, and investments in funds were 421.8 billion yuan, bringing the total scale of equity financial asset investments to approximately 1.6763 trillion yuan. This figure represents an increase of roughly 400 billion yuan compared to 2024.

On the evening of July 21, the company also released an announcement expressing its firm confidence in the prospects of China's economy and capital markets, as well as the配置价值 (allocation value) of the equity market.

The company stated it adheres to the principle of asset-liability matching, practices long-term, value, and稳健 investment philosophies, leverages the advantages of patient capital, and continues to advance its investments in the equity market.

The precise execution in the GigaDevice transaction was based on the company's accurate grasp and judgment of the market.

This serves as a clear reflection of the insurer's formidable investment capabilities.