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CPIC reports sharp drop in H1 profits

By Wang Xinyuan (Global Times)

08:20, August 21, 2012

China Pacific Insurance Group Co (CPIC), China's third-largest insurer in terms of premiums, reported Monday a 54.6 percent drop in its net profit in the first half of this year from a year ago, mainly due to sliding investment returns and a slowdown in premium income.

CPIC disclosed that it achieved first-half net profit of 2.6 billion yuan ($408 million) attributable to shareholders, bringing earnings per share to 0.31 yuan in the first six months, down from 0.68 yuan a year ago, according to a report filed with the Shanghai and Hong Kong stock exchanges Monday.

CPIC is the first listed insurer that has so far disclosed its mid-year financial performance.

CPIC's share price fell by 3.54 percent Monday from the previous trading day on the Shanghai Stock Exchange, compared with a 0.37 percent dip in the benchmark Shanghai Composite Index. The company's shares also slid 1.19 percent in Hong Kong against a slight fall of 0.06 percent in Hong Kong's benchmark Hang Seng index.

"The weak stock market has led to the slide in investment income, which is the major cause of the slump in profits," Luo Qi, an insurance analyst with Ping An Securities, told the Global Times.

CPIC's investment income amounted to 7.58 billion yuan in the first half, down 10 percent year-on-year, mainly due to the combined effect of losses in trading of equity assets and the increase in provision for potential financial asset losses, the company said in the report.

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