Top 3 Insurers May See First-Half Net Profit Fall

Mon. August 18, 2008; Posted: 04:34 AM

SHANGHAI, Aug 18, 2008 (SinoCast China Financial Watch via COMTEX) -- LFC | Quote | Chart | News | PowerRating -- It is estimated that the first-half net profit of the top three insurers in China may fall on the sharp declines of floating profits from equity investment.

Wang Xiaogang, an analyst at Orient Securities in Shanghai, predicted that the first-half net profit of China Life Insurance (SHSE: 601628; SEHK: 2628), China's largest life insurer, may be CNY 9.7 billion based on the Hong Kong accounting standards and earnings per share would be CNY 34 cents, down 58 percent than the same period of last year.

And the first-half net profit of Ping An Insurance (Group) Co. (SHSE: 601318; SEHK: 2318) would probably be CNY 8.2 billion based on the generally accepted accounting standards and its EPS would slide 20 percent to CNY 1.11.

The net profit of China Pacific Insurance (Group) Co. (SHSE: 601601) would probably be CNY 4.1 billion and EPS may drop 22 percent to CNY 53 cents.

The declines were owed to the continuing downturn of A- share stock market this year. CSI 300 Index, which tracks 300 most representative stocks in Shanghai and Shenzhen, dropped 26 percent in the second quarter, slightly lower than the 29 percent decline in the first quarter. Insurance companies' floating profits from stock and fund investments have shrank 40- 75 percent as at the end of March, which added pressure on their second-quarter financial results.

Ping An Insurance, which owns the country's second-largest life insurer and third-largest property insurer, will take the lead among the three to publish its first-half result on August 15 evening.

Its subsidiaries, namely Ping An Life Insurance, Ping An Property Insurance Co., Ping An Health Insurance Co. and Ping An Pension Co. got primary premium incomes of CNY 53.9 billion, CNY 14.5 billion, CNY 14.7 million and CNY 593.9 million between January 1 and June 30, 2008.

Some analysts forecast that the top three insurers' net asset may fall about 20 percent. As bancassurance is the largest contributor to their first-half life insurance premiums, the embedded value of their first-half results would fall 15 percent than the end of 2007.

(USD 1 = CNY 6.85)

From www.cnstock.com, Page 1, Friday, August 15, 2008 info@SinoCast.com

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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