China Pacific H1 Profit Down 57%

飞雪寒冰

China Pacific Insurance (Group) Co., the country's third-largest insurer, said first-half net profit fell 57 percent year-on-year to 2.4 billion yuan due to falling investment gains.

Earnings per share stood at 0.31 yuan in the first half, compared with 0.72 yuan a year earlier, China Pacific (SSE:601601) said in its financial report to the Shanghai Stock Exchange on Aug. 31.

Investment gains decreased 38.9 percent from a year earlier to 8.96 billion yuan in the first half, with returns on equity investments down 45.6 percent, the statement said.

China Pacific Insurance's equity investment accounted for 8.8 percent of its portfolio at end-June, up 4.1 percent from the beginning of the year. By comparison, equity investment by China Life Insurance (SSE 601628; HKEX 2628) and China Ping An Insurance (SSE 601318; HKEX 2318) accounted for 13.4 percent and 9.6 percent of total investment respectively.

Profit also declined due to a 1.3 percent year-on-year decline in life insurance premium income to 33.6 billion yuan.

飞雪寒冰

Premium income has been falling relative to the previous year since October, when the company began to restructure its portfolio, cutting investment-linked products in favor of long-term insurance offerings.

Securities firm Shenyin Wanguo said in a recent report that China Pacific Insurance's premium income is expected to improve in the fourth quarter.

Net profit from life insurance operations totalled 1.8 billion yuan in the first half, down 60 percent year-on-year, while property operations posted net profit of 291 million yuan.

At end-June, China Pacific Insurance held 8 percent of the country's life insurance market, down 1 percentage point, while its share of the property insurance market rose to 11.8 percent, up 0.4 percentage points.

The company will hold a shareholder meeting to review its H-share listing plan on Aug.31.

In June, the insurer said it may launch its Hong Kong initial public offering after it shelved plans to list in 2007 due to the poor performance of the stock market.