(Bloomberg) -- Ping An Insurance (Group) Co. said profit jumped 36% for the first nine months of the year, after a stock-market rally bolstered investment returns at China’s second-largest insurer by market value.
Net income rose to 119.2 billion yuan ($16.8 billion) from 87.6 billion yuan a year earlier, the Shenzhen-based company said in a filing to the Hong Kong stock exchange Monday. Operating profit, which the insurer says better reflects performance by stripping out short-term investment volatility and one-time items, rose 5.5%.
A 17% rally in the CSI 300 Index this year through Sept. 30 has bolstered the value of Chinese insurers’ stock holdings, lifting profits to levels that Guotai Junan Securities Co. analysts say will “exceed expectations.” Competitors including China Life Insurance Co. have made preliminary forecasts for even bigger increases in net income, partly thanks to higher exposure to equities.
Investment income more than tripled to 125.4 billion yuan, according to the filing. Net impairment losses on financial assets narrowed 4%, the company said.
New business value, which measures the profitability of new life policies sold, grew 34% in the first nine months, accelerating from an 11% gain in the first half of the year.
The gauge could rise 20% or more this year, driven by a 66% surge in new premiums in the third quarter as buyers rushed in ahead of a new round of interest rate cuts, Bloomberg Intelligence analyst Steven Lam wrote in a note.
Chinese stocks jumped in September after the government announced a range of economic stimulus measures, helping the key CSI 300 index post a hefty gain for the first nine months, reversing a decline in the same period last year. That will lead to forecast-beating profit increases at listed insurers, Guotai Junan analysts led by Liu Xinqi wrote in an Oct. 16 report, which forecast a 36% net income gain at Ping An.
Ping An fell 1.8% to close at HK$49.05 in Hong Kong trading. The shares have gained 39% this year.
(Updates with more details from fourth paragraph.)
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