China Life Q3 Floating Loss Hit CNY 9.7bn

China Life Insurance Co., Ltd. (SHSE: 601628 and SEHK: 2628), the nation's biggest life insurer, reported a return on total investment of 4.71 percent for the first three quarters of 2009, up 1.44 percentage points from 3.27 percent as at the end of June 30.

However, the floating loss it suffered in the three quarters reached CNY 202 million, exceeding the floating profit it enjoyed in the first half of this year. The figure it booked for the third quarter was CNY 9.7 billion, which caused the net assets to slid 2.5 percent quarter on quarter, with contribution to net asset growth standing at negative 6.4 percentage points, compared to 3.9 percentage points contributed by CNY 5.9 billion net profit gained in the three months.

Net assets reached CNY 148.1 billion as at September 30, compared to CNY 151.9 billion as at the end of June 30, with net assets per share falling CNY 0.13 to CNY 5.24. It indicates that the insurer's net assets shrank to some extent hurt by fluctuations in the domestic stock market in the quarter.

Net profit for the three quarters totaled 19.87 billion, up 51.6 percent year on year but down 30.2 percent quarter on quarter. The Shanghai-Shenzhen 300 Index surged 26.3 percent in the second quarter of this year and in which the insurer achieved a lot from expanded stock and fund investment. In the third quarter when the proportion of its equity investment reached a new high, the index slid 5.1 percent, which caused its return on investment and fair value change to dive 32.7 percent from the previous quarter.

Premium revenue obtained in the three quarters hit CNY 237.3 billion, down 4.6 percent year on year. That captured in September stood at CNY 26.6 billion, up 13.7 percent from CNY 23.4 billion a year ago, changing the situation of a negative growth it experienced for six consecutive months this year. Proportion of three varieties of expenditures accounted for 15 percent of earned premium revenue in the third quarter, compared to 16 percent in the second quarter.

Earnings per share stood at CNY 0.19, CNY 0.3 and CNY 0.21 in each of the three quarters. The figure for the three quarters was CNY 0.7 and that for the whole year is predicted at CNY 0.86, compared to previous expectation of CNY 0.89.

(USD 1 = CNY 6.83)

Source: www.cnstock.com (October 29, 2009)

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