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China Life has announced 29 % increase in profit

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China Life Insurance Co., the world’s biggest life insurer by market value, rose in Hong Kong trading after the company said first-half profit increased 15 percent on investment returns.

The shares advanced as much as 1.7 percent and were 0.9 percent higher at HK$33.55 as of 10:39 a.m. local time. The benchmark Hang Seng Index added 0.3 percent.

Net income at China Life climbed to 18.2 billion yuan ($2.7 billion), or 0.64 yuan a share, from 15.8 billion yuan, or 0.56 yuan, a year earlier, the company said in a statement to the Hong Kong stock exchange late yesterday. A 63 percent gain in the benchmark Shanghai Composite Index helped China Life’s investment returns in the period after a 55 percent plunge a year earlier dented earnings.

“China Life has been able to timely adjust its investment portfolio to capture the strong year-to-date A-share market performance,” Citigroup Inc. analysts Bob Leung and Jones Ku said in an e-mailed note today. “We expect to see the market react positively as China Life’s new business value growth picked up for the first time in three years.”

Chairman Yang Chao has slowed premium growth this year to improve underwriting profitability by curbing short-term, single-payment products and boosting higher-margin policy sales.

The Beijing-based insurer’s net realized gains on financial assets, which reflect returns from the stock market, surged 16 times to 11.9 billion yuan. The company reported a 1.4 billion yuan net fair-value gain on held-for-trading assets, reversing a 6.5 billion yuan loss a year earlier.

Source : Bloomberg