Ping An net pays for stocks slump

Profit at Ping An Insurance (2318) dropped 4.3 percent in the first quarter as stock-market declines and falling bond yields eroded investment returns.

Net income fell to 36.7 billion yuan (HK$39.7 billion) from 38.4 billion yuan a year ago, the Shenzhen-based insurer said in a filing with the Hong Kong stock exchange yesterday.

Operating profit, which strips out one-time items and short-term investment volatility, fell 3 percent.

China's stock market rout at the start of the year and lower bond yields have hurt profit even as more customers seek to buy savings products. Co-chief executive Michael Guo has said profitability will recover after a 23 percent drop in net income last year.

"China's macroeconomy gradually recovered in the first three months of 2024, but there were still challenges," the company said, citing weak domestic demand. "In response to volatile capital markets and declining treasury yields, Ping An continued to pursue long-term returns through cycles via value investing."

Net investment yield of insurance funds dropped to 3 percent, down from 3.1 percent a year earlier. Real estate investments fell to 4.2 percent of the 4.9 trillion yuan portfolio, from 4.6 percent a year earlier.