CHINA LIFE (02628.HK): Sells 37.26% of Pension Company to Controlling Shareholder for About RMB 4.58bn

NewTimeSpace News: On 21 October 2026, China Life Insurance Company Limited (the "Company") announced that it proposes to enter into a company share transfer agreement with the Group Company on or before 31 December 2026, under which the Company will sell its 33.73% equity interest in the Pension Company to the Group Company for a consideration of RMB 4,146,428,900; and that the Asset Management Company, a non-wholly-owned subsidiary of the Company, proposes to enter into an asset management company share transfer agreement with the Group Company on or before 31 December 2026, under which the Asset Management Company will sell its 3.53% equity interest in the Pension Company to the Group Company for a consideration of RMB 433,870,588.24. The aggregate consideration for the two disposals is approximately RMB 4.58 billion, and together the two disposals represent 37.26% of the total shares in the Pension Company.

The announcement disclosed that the Company's disposal involves 1,146,820,000 shares in the Pension Company, representing 33.73% of its total shares, while the Asset Management Company's disposal involves 120,000,000 shares, representing 3.53%. The considerations were determined by reference to the appraised value of the entire equity interest of the Pension Company as at the valuation reference date (i.e. 31 December 2025) of RMB 12,293,000,000 adopted by the valuer using the income approach, and represent 33.73% and 3.53% of that appraised value respectively; the considerations shall be paid in cash by the Group Company in a lump sum within 30 working days after all conditions precedent are satisfied. Completion is conditional upon the agreements being duly signed and becoming effective, the parties obtaining internal decisions in compliance with their respective articles of association and systems and completing the requisite corporate governance procedures, and obtaining all necessary external approvals and/or filings from the Ministry of Finance of the PRC and the National Financial Regulatory Administration, among others; if the conditions precedent are not all satisfied within 180 days after signing, the agreements will terminate automatically. Upon completion of the disposals, the Company's equity interest in the Pension Company will fall from 70.74% to 37.01%, the Asset Management Company will hold no interest, and the Pension Company will cease to be a subsidiary of the Company, with its financial results no longer consolidated into the Group's financial statements.

The Company stated that the Group Company is the controlling shareholder of the Company, currently holding approximately 68.37% of its issued share capital, and is a connected person of the Company; the disposals therefore constitute connected transactions under Chapter 14A of the Listing Rules. As one or more of the applicable percentage ratios exceed 0.1% but are less than 5%, the disposals are subject to the reporting and announcement requirements but are exempt from the independent shareholders' approval requirement. The Pension Company was established in January 2007 with registered capital of RMB 3.4 billion and is a nationwide professional pension financial institution providing enterprise annuity fund management, occupational annuity fund management, basic endowment insurance fund management, commercial pension management and retirement protection management products and services; as at the date of the announcement, it is held as to 70.74%, 19.99%, 4.41%, 3.53% and 1.33% by the Company, Anbao Group, the Group Company, the Asset Management Company and China Credit Trust respectively, and save for their interests in the Pension Company, Anbao Group, China Credit Trust and their ultimate beneficial owners are third parties independent of the Company and its connected persons; as at 31 December 2025, its audited total assets and net assets were approximately RMB 91.571 billion and RMB 9.467 billion respectively, and its audited profit before and after tax for 2025 was approximately RMB 2.351 billion and RMB 1.748 billion respectively. Based on a preliminary estimate using the audited net assets attributable to shareholders of the Company of approximately RMB 9.443 billion as at 31 December 2025, the Group is expected to record a gain of approximately RMB 2.574 billion from the disposals; the net proceeds are expected to be used for the Company's daily working capital. As at 31 December 2025, the Pension Company's total assets, revenue and net profit accounted for 1.2%, 0.7% and 1.1% of the Group's corresponding indicators respectively. Upon completion, the Pension Company will be held as to 41.67%, 37.01%, 19.99% and 1.33% by the Group Company, the Company, Anbao Group and China Credit Trust respectively, with the Group Company becoming its largest shareholder.