China Life prospers on rise in stock picks - ResearchInChina
Date:2007-08-28
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CHINA Life Insurance Co (stock code: 601628), the world's biggest insurer by market value, said first-half profit more than doubled on soaring returns from stock market holdings.
Unaudited net income rose to 23.3 billion yuan (US$3.1 billion), or 0.82 yuan a share, from 8.97 billion yuan, or 0.33 yuan per share a year earlier, beating the 16.6-billion-yuan average estimate of five analysts surveyed by Bloomberg News.
China Life's investment gains countered slowing premium growth as China's stock market, the world's best performing this year, lured people away from investment-linked policies.
The Beijing-based insurer has been losing market share this year to smaller rivals such as China Pacific Insurance (Group) Co, industry analysts pointed out.
"Their story this year has been about spectacular investment gains, not business growth," said Dominic Chan, an analyst at CLSA Asia-Pacific Markets in Hong Kong, who gives the stock a "buy" rating.
Net investment income jumped to 24.1 billion yuan from 11.3 billion yuan a year earlier, helped by a quadrupling in the nation's benchmark CSI 300 Index in the past year.
China Life's net premiums minus reinsurance costs grew 17 percent to 63.4 billion yuan, slowing from 29 percent expansion a year earlier.
The firm's share of the nation's life insurance market shrank to 46.9 percent in the first six months from 49.4 percent a year earlier, according to China's industry watchdog.
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