CHINA'S INSURANCE MAJORS FACE PROFIT SLUMP IN FY09: ANALYSTS

Mon. August 18, 2008; Posted: 01:24 AM

BEIJING, Aug 18, 2008 (AsiaPulse via COMTEX) -- LFC | Quote | Chart | News | PowerRating -- China's insurance giants face declining profit as unrealized profit is almost depleted this year.

Wang Xiaogang, an analyst from Orient Securities Co., Ltd. predicted that China Life Insurance Company (SSE:601628) might post in the pending semi-annual report a net profit of 9.7 billion yuan (HKAS) (US$1.41 billion) in the first half of this year with 0.34 yuan for earnings per share (EPS), 58 per cent down from the same period of last year.

Ping An (SSE:601318; SEHK:2318) reported its profit during this period down to 8.2 billion yuan (IFRS) with EPS averaging 1.11 yuan, losing 20 per cent from a year ago.

China Pacific Insurance Co., Ltd. (CPIC) (SSE:601601) said that its net profit amounted to 4.1 billion yuan (GAAP PRC) and EPS was 22 per cent lower at 0.53 yuan.

Accord to Wang, China Life may not include part of its unrealized profit, 25 per cent of last year's and possibly amounting to 217 billion yuan, in the report. Thus, its EPS loss would be greater than the other two.

Ping An and CPIC have 25 per cent to 30 per cent of their unrealized profit at the end of 2007 transferred to the first quarter of this year, but the profit may run out in mid year.

Given the 10 billion yuan loss from investing in Futong Group, Ping An's equity investment is likely to fail, said analysts.

Net assets of the three are estimated to decline 20 per cent.

Premium income will keep soaring in the second half of this year, up about 60 per cent, but may only see 10 per cent increase in the next year, according to latest reports of Everbright Securities Co. Ltd.

(XIC)

For full details on China Life Insurance Company Limited ADS (LFC) click here. China Life Insurance Company Limited ADS (LFC) has Short Term PowerRatings of 6. Details on China Life Insurance Company Limited ADS (LFC) Short Term PowerRatings is available at This Link.

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