EXHIBIT 99.1
CHINA LIFE INSURANCE COMPANY LIMITED
(A joint stock limited company incorporated in the People’s Republic of China with limited liability)
(Stock Code: 2628)
2018 THIRD QUARTER REPORT
This announcement is made by China Life Insurance Company Limited (the “Company”) pursuant to the inside information provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and Rules 13.09(2) and 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
The financial data of the Company for the third quarter of 2018 have been prepared in accordance with the China Accounting Standards for Business Enterprises and are unaudited. Net profit attributable to equity holders of the Company and equity attributable to equity holders of the Company in the consolidated financial statements have no difference from the relevant data under the International Financial Reporting Standards. |
1. | Important Notice |
1.1 | The Company’s Board of Directors, the Board of Supervisors, its Directors, Supervisors and Senior Management warrant that the information in this quarterly report is true, accurate and complete and contains no false representations, misleading statements or material omissions, and jointly and severally accept full legal responsibility. |
1.2 | On 25 October 2018, the 2018 Third Quarter Report of the Company was considered and approved at the sixth meeting of the sixth session of the Board of the Company. Of the twelve Directors of the Company, nine attended the Board Meeting. Executive Directors Lin Dairen, Xu Hengping and Xu Haifeng,Non-executive Directors Liu Huimin and Su Hengxuan, and IndependentNon-executive Directors Chang Tso Tung Stephen, Robinson Drake Pike, Tang Xin and LeungOi-Sie Elsie attended the meeting. Chairman and Executive Director Yang Mingsheng could not attend the meeting due to other business, and gave written authorization to Executive Director Lin Dairen to act as his proxy to attend, vote and chair the meeting.Non-executive Directors Yuan Changqing and Yin Zhaojun could not attend the meeting due to other business, and gave written authorization toNon-executive Directors Su Hengxuan and Liu Huimin, respectively, to act as proxies to attend and vote at the meeting. |
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1.3 | The Company’s 2018 third quarter financial report is unaudited. |
1.4 | Mr. Yang Mingsheng, Chairman of the Company, Mr. Zhao Lijun, Vice President in charge of accounting affairs, Mr. Li Mingguang, Chief Actuary and Ms. Hu Jin, Head of the Accounting Department, confirm that the financial reports in this 2018 third quarter report are true, accurate and complete. |
2. | The Company’s Basic Information |
2.1 | Major financial data |
(Currency: RMB)
As at 30 September 2018 | As at 31 December 2017 | Increase/(decrease) compared to 31 December 2017 | ||||||||||
Total assets(million) | 3,116,499 | 2,897,591 | 7.6 | % | ||||||||
Total equity holders’ equity(million) | 330,385 | 320,933 | 2.9 | % | ||||||||
Ordinary share holders’ equity per share(RMB per share) | 11.41 | 11.08 | 3.0 | % | ||||||||
For the nine months ended 30 September 2018 | For the nine months ended 30 September 2017 | Increase/(decrease) compared to the same period of 2017 | ||||||||||
Net cash flows from operating activities(million) | 76,433 | 179,789 | -57.5 | % | ||||||||
Net cash flows from operating activities per share(RMB per share) | 2.70 | 6.36 | -57.5 | % | ||||||||
For the nine months ended 30 September 2018 | For the nine months ended 30 September 2017 | Increase/(decrease) compared to the same period of 2017 | ||||||||||
Operating income(million) | 540,967 | 547,665 | -1.2 | % | ||||||||
Net profit attributable to equity holders of the Company(million) | 19,869 | 26,825 | -25.9 | % | ||||||||
Net profit attributable to equity holders of the Company after deductingnon-recurring items(million) | 20,049 | 26,902 | -25.5 | % | ||||||||
Earnings per share (basic and diluted)(RMB per share) | 0.69 | 0.94 | -26.2 | % | ||||||||
Basic earnings per share after deductingnon-recurring items(RMB per share) | 0.70 | 0.94 | -25.7 | % | ||||||||
Weighted average ROE(%) | 6.13 | 8.68 | A decrease of 2.55 percentage points | |||||||||
Weighted average ROE after deductingnon-recurring items(%) | 6.18 | 8.70 | A decrease of 2.52 percentage points |
Note: | In calculating the percentage changes of “Ordinary share holders’ equity per share”, “Net cash flows from operating activities per share”, “Earnings per share (basic and diluted)” and “Basic earnings per share after deductingnon-recurring items”, the tail differences of the basic figures have been taken into account. |
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In the first three quarters of 2018, facing the complicated and severe external environment, the Company adhered to its strategic consistency and tactical flexibility, and steadily pushed forward various tasks according to the requirements for high-quality development.Firstly, the Company firmly remained a market-leading position, and renewal premiums became stronger driving force for the business development. In the first three quarters of 2018, the Company achieved revenues from insurance business1 of RMB468,534 million, an increase of 4.1%year-on-year, maintaining its leading position in the market. In particular, the Company recorded renewal premiums of RMB316,285 million, an increase of 28.7%year-on-year, which demonstrated the strong driving force of the renewal business.Secondly, the Company promoted the product diversification strategy in great depth, and its business structure was constantly optimized. The percentage of premiums from the top five insurance categories inlong-termfirst-year premiums decreased by 17.4 percentage pointsyear-on-year, and thelong-term protection-oriented business developed at a faster speed. As at 30 September 2018, the surrender rate was 4.45%.Thirdly, the sales force remained stable in its size with enhanced quality, and the sales transformation began to take effect. As at 30 September 2018, the scale of the Company’s sales force reached 1.83 million, which was basically flat as compared to the end of June 2018. In particular, the number of exclusive individual agents in the exclusive individual agent channel reached 1.455 million, an increase of 14,000 agents from the end of June 2018. Meanwhile, the average agents on a monthly basis for the sale of protection-oriented products increased by 49.7%year-on-year, with the quality of the sales force improved.Fourthly, the allocation in fixed income assets was satisfactory but equity investment income was under pressure. As at 30 September 2018, the Company’s investment assets were RMB2,787,721 million. In the third quarter of 2018, the Company continued to seize the opportunity of the interest rate hike and increased its investment in fixed income assets with long duration. The Company also consistently optimized the structure of its equity assets allocation. However, the equity assets income of the Company in the open market declined significantly due to the impact of the prolonged downturn in the domestic stock market. In the first three quarters of 2018, gross investment yield2 was 3.32%, a decrease of 1.80 percentage pointsyear-on-year; net investment yield3 was 4.60%, a decrease of 0.39 percentage pointyear-on-year. As affected by the continuous decline of the capital market, net profit attributable to equity holders of the Company was RMB19,869 million, a decrease of 25.9%year-on-year.Finally, the Company’s comprehensive strengths were enhanced. As at 30 September 2018, the Company’s total assets reached RMB3,116,499 million, an increase of 7.6% as compared to the end of 2017, ranking first in the industry. Both of the Company’s core solvency ratio and comprehensive solvency ratio reached 262.17%.
1 | Revenues from insurance business is consistent with Premium Income in the attached income statement. |
2 | Gross investment yield = {[(Gross investment income – Interest paid for financial assets sold under agreements to repurchase)/((Investment assets at the beginning of the period – Financial assets sold under agreements to repurchase at the beginning the period – Derivative financial liabilities at the beginning of the period + Investment assets at the end of the period – Financial assets sold under agreements to repurchase at the end of the period – Derivative financial liabilities at the end of the period)/2)]/273}×365 |
3 | Net investment yield = {[(Net investment income – Interest paid for financial assets sold under agreements to repurchase)/((Investment assets at the beginning of the period – Financial assets sold under agreements to repurchase at the beginning of the period + Investment assets at the end of the period – Financial assets sold under agreements to repurchase at the end of the period)/2]/273}×365 |
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For the next stage, the Company will focus on its annual targets and take proactive actions to fulfill the overall tasks for the year 2018, by sticking to the general keynote of “making steady progress” and the requirements for high-quality development, and adhering to the operating guideline of “prioritizing value, strengthening sales force, optimizing business structure, achieving stable growth and safeguarding against risks”. Moreover, the Company will develop scientific plans for the year 2019, and forge ahead with courage and persistent efforts for the purpose of achieving satisfactory results.
Non-recurring Items and Amounts
RMB million
Non-recurring items | For the Reporting Period (from July to September) | For the nine months ended 30 September 2018 | ||||||
Gains/(losses) on disposal ofnon-current assets | 11 | 14 | ||||||
Government subsidies recognized in current gains/(losses) | 16 | 33 | ||||||
Netnon-recurring items other than those mentioned above | (112 | ) | (284 | ) | ||||
Effect of income tax | 21 | 59 | ||||||
Attributable tonon-controlling interests | 1 | (2 | ) | |||||
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Total | (63 | ) | (180 | ) | ||||
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Note: | As an insurance company, investment (utilization of insurance funds) is one of the major businesses of the Company. Therefore, thenon-recurring items do not include fair value gains/(losses) from financial assets at fair value through profit or loss and financial liabilities at fair value through profit or loss, as well as investment income from the disposal of financial assets at fair value through profit or loss and financial liabilities at fair value through profit or loss andavailable-for-sale financial assets. |
2.2Total number of shareholders and the particulars of top ten shareholders as at the end of the reporting period
The total number of shareholders as at the end of the Reporting Period | Number of holders of A Shares: 135,112 | |||||||||
Number of holders of H Shares: 28,015 |
Particulars of the top ten shareholders | Unit: Share | |||||||||||||||||
Name of shareholders | Nature of shareholder | Percentage of shareholding | Total number of shares | Number of shares subject to selling restrictions | Number of shares pledged or frozen | |||||||||||||
China Life Insurance (Group) Company | State-owned legal person | 68.37 | % | 19,323,530,000 | — | — | ||||||||||||
HKSCC Nominees Limited | Overseas legal person | 25.90 | % | 7,321,787,185 | — | — | ||||||||||||
China Securities Finance Corporation Limited | State-owned legal person | 2.56 | % | 723,712,461 | — | — | ||||||||||||
Central Huijin Asset Management Limited | State-owned legal person | 0.42 | % | 119,719,900 | — | — |
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Hong Kong Securities Clearing Company Limited | Overseas legal person | 0.10 | % | 29,277,307 | — | — | ||||||||||||
China International Television Corporation | State-owned legal person | 0.07 | % | 18,452,300 | — | — | ||||||||||||
China Universal Asset Management Co., Ltd – Industrial and Commercial Bank of China Limited – China Universal – Tianfu Bull No. 53 Asset Management Plan | Other | 0.05 | % | 15,015,845 | — | — | ||||||||||||
Industrial and Commercial Bank of China Limited – SSE 50 Exchange Traded Securities Investment Fund | Other | 0.05 | % | 14,601,652 | — | — | ||||||||||||
China National Nuclear Corporation | State-owned legal person | 0.04 | % | 12,400,000 | — | — | ||||||||||||
National Social Security Fund Portfolio 407 | State-owned legal person | 0.03 | % | 9,449,731 | — | — | ||||||||||||
Details of shareholders | 1. HKSCC Nominees Limited is a company that holds shares on behalf of the clients of the Hong Kong stock brokers and other participants of the CCASS system. The relevant regulations of The Stock Exchange of Hong Kong Limited do not require such persons to declare whether their shareholdings are pledged or frozen. Hence, HKSCC Nominees Limited is unable to calculate or provide the number of shares that are pledged or frozen. |
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2. China International Television Corporation and China National Nuclear Corporation became the top 10 shareholders of the Company through the strategic placement during the initial public offering of A Shares of the Company in December 2006. The trading restriction period of the shares from the strategic placement was from 9 January 2007 to 9 January 2008. |
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3. Industrial and Commercial Bank of China Limited – SSE 50 Exchange Traded Index Securities Investment Fund has Industrial and Commercial Bank of China Limited as their fund depositary. China Universal Asset Management Co., Ltd – Industrial and Commercial Bank of China Limited – China Universal – Tianfu Bull No.53 Asset Management Plan has Industrial and Commercial Bank of China Limited as its asset trustee. Save as above, the Company was not aware of any connected relationship and concerted parties as defined by the “Measures for the Administration of the Takeover of Listed Companies” among the top ten shareholders of the Company. |
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2.3 | Total number of preference share holders, top ten preference share holders, and the particulars of top ten preference share holders with no selling restrictions as at the end of the reporting period |
☐ Applicable ☑ Not applicable
3. | Significant Events |
3.1 | Particulars of and reasons for changes in major accounting items and financial indicators of the Company |
☑ Applicable ☐ Not applicable
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(1) | Changes in key financial indicators and the reasons |
RMB million
Key financial indicators | As at 30 September 2018 | As at 31 December 2017 | Increase/ (decrease) | Main reasons | ||||||||||
Total assets | 3,116,499 | 2,897,591 | 7.6 | % | Accumulation of the assets from insurance business and investment business | |||||||||
Total liabilities | 2,781,321 | 2,572,281 | 8.1 | % | An increase in insurance reserves | |||||||||
Total equity holders’ equity | 330,385 | 320,933 | 2.9 | % | Due to the effect of profits during the Reporting Period |
RMB million
Key financial indicators | For the nine months ended 30 September 2018 | For the nine months ended 30 September 2017 | Increase/ (decrease) | Main reasons | ||||||||||
Operating profit | 25,360 | 32,679 | -22.4 | % | A significant decrease in equity income in open market due to the dramatic volatility in domestic capital market | |||||||||
Net profit attributable to equity holders of the Company | 19,869 | 26,825 | -25.9 | % | A significant decrease in equity income in open market due to the dramatic volatility in domestic capital market |
(2) | Material changes in major accounting items and the reasons |
RMB million
Key financial indicators | As at 30 September 2018 | As at 31 December 2017 | Increase/ (decrease) | Main reasons | ||||||||||
Cash fund | 67,579 | 50,189 | 34.6 | % | The needs for liquidity management | |||||||||
Securities purchased under agreements to resell | 6,126 | 36,184 | -83.1 | % | The needs for liquidity management | |||||||||
Premiums receivables | 31,986 | 14,121 | 126.5 | % | Accumulation of renewal premiums | |||||||||
Investment properties | 7,035 | 3,064 | 129.6 | % | An increase of investment properties | |||||||||
Securities sold under agreements to repurchase | 119,626 | 87,309 | 37.0 | % | The needs for liquidity management | |||||||||
Unearned premium reserves | 20,231 | 12,289 | 64.6 | % | Development ofshort-term insurance business and the variation of its business schedule |
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RMB million
Key financial indicators | For the nine months ended 30 September 2018 | For the nine months ended 30 September 2017 | Increase/ | Main reasons | ||||||||
Fair value gains/(losses) | (5,412 | ) | 4,557 | N/A | Fluctuation of the market value of the financial assets at fair value through profit or loss | |||||||
Impairment losses | 5,596 | 2,189 | 155.6% | An increase in equity investment assets identified to be impaired |
3.2 | Explanation and analysis of significant events and their impacts and solutions |
☐ Applicable ☑ Not applicable
3.3 | Undertakings were not implemented in due time during the reporting period |
☑ Applicable ☐ Not applicable
Prior to the listing of the Company’s A Shares (30 November 2006), land use rights were injected by China Life Insurance (Group) Company (the “CLIC”) into the Company during its reorganization. Out of these, four pieces of land (with a total area of 10,421.12 square meters) had not had its formalities in relation to the change of ownership completed. Further, out of the properties injected into the Company, there were six properties (with a gross floor area of 8,639.76 square meters) in respect of which the formalities in relation to the change of ownership had not been completed. CLIC undertook to complete the above-mentioned formalities within one year of the date of listing of the Company’s A Shares, and in the event such formalities could not be completed within such period, CLIC would bear any potential losses to the Company in relation thereto.
CLIC strictly followed these commitments. As at the end of the Reporting Period, save for the two properties and related land of the Company’s Shenzhen Branch, the ownership registration formalities of which had not been completed due to historical reasons, all other formalities in relation to the change of land and property ownership had been completed. The Shenzhen Branch of the Company continues to use such properties and land, and no other parties have questioned or hindered the use of such properties and land by the Company.
The Company’s Shenzhen Branch and the otherco-owners of the properties have issued a letter to the governing department of the original owner of the properties in respect of the confirmation of ownership of the properties, requesting it to report the ownership issue to the State-owned Assets Supervision and Administration Commission of the State Council (“SASAC”), and requesting the SASAC to confirm the respective shares of eachco-owner in the properties and to issue written documents in this regard to the department of land and resources of Shenzhen, so as to assist the Company and the otherco-owners to complete the formalities in relation to the division of ownership of the properties.
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Given that the change of ownership of the above two properties and related land use rights were directed by theco-owners, and all formalities in relation to the change of ownership were proceeded slowly due to reasons such as issues rooted in history and government approvals, CLIC, the controlling shareholder of the Company, made further commitment as follows: CLIC will assist the Company in completing, and urge theco-owners to complete the formalities in relation to the change of ownership in respect of the above two properties and related land use rights as soon as possible. If the formalities cannot be completed due to the reasons of theco-owners, CLIC will take any other legally practicable measures to resolve the issue and will bear any potential losses suffered by the Company as a result of the defective ownership.
3.4 | Warnings and explanation for any forecasted losses or significant changes (as compared to the same period of last year) in accumulated net profit from the beginning of the year to the end of the next reporting period |
☐ Applicable ☑ Not applicable
This announcement is published in both Chinese and English. The Chinese version announcement shall prevail.
By Order of the Board |
China Life Insurance Company Limited Heng Victor Ja Wei |
Company Secretary |
As at the date of this announcement, the Board of Directors of the Company comprises:
Executive Directors: | Yang Mingsheng, Lin Dairen, Xu Hengping, Xu Haifeng | |
Non-executive Directors: | Yuan Changqing, Liu Huimin, Yin Zhaojun, Su Hengxuan | |
IndependentNon-executive Directors: | Chang Tso Tung Stephen, Robinson Drake Pike, | |
Tang Xin, LeungOi-Sie Elsie |
Hong Kong, 25 October 2018
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4. | Appendix |
4.1 | Balance sheet as at 30 September 2018 (unaudited) |
RMB million (Unless otherwise stated)
ASSETS | As at Group | As at Group | As at 30 September 2018 Company | As at 31 December 2017 Company | ||||||||||||
Assets | ||||||||||||||||
Cash fund | 67,579 | 50,189 | 64,210 | 44,176 | ||||||||||||
Financial assets at fair value through profit or loss | 159,345 | 136,808 | 146,082 | 127,543 | ||||||||||||
Securities purchased under agreements to resell | 6,126 | 36,184 | 6,084 | 35,760 | ||||||||||||
Interest receivables | 50,397 | 50,395 | 49,944 | 50,044 | ||||||||||||
Premiums receivables | 31,986 | 14,121 | 31,986 | 14,121 | ||||||||||||
Receivables from reinsurers | 21 | 64 | 21 | 64 | ||||||||||||
Unearned premium reserves receivable from reinsurers | 606 | 527 | 606 | 527 | ||||||||||||
Claim reserves receivable from reinsurers | 198 | 104 | 198 | 104 | ||||||||||||
Reserves for life insurance receivables from reinsurers | 285 | 281 | 285 | 281 | ||||||||||||
Reserves for long-term health insurance receivables from reinsurers | 2,629 | 2,070 | 2,629 | 2,070 | ||||||||||||
Other receivables | 10,311 | 22,078 | 9,219 | 20,967 | ||||||||||||
Loans | 432,111 | 383,504 | 428,422 | 381,253 | ||||||||||||
Term deposits | 452,569 | 449,400 | 446,763 | 444,279 | ||||||||||||
Available-for-sale financial assets | 875,307 | 810,734 | 863,127 | 797,108 | ||||||||||||
Held-to-maturity investments | 781,316 | 717,037 | 780,540 | 716,346 | ||||||||||||
Long-term equity investments | 173,619 | 161,472 | 185,095 | 171,537 | ||||||||||||
Statutory deposits | 6,333 | 6,333 | 5,653 | 5,653 | ||||||||||||
Investment properties | 7,035 | 3,064 | 1,361 | 1,401 | ||||||||||||
Constructions in progress | 20,295 | 16,696 | 16,829 | 10,951 | ||||||||||||
Fixed assets | 25,495 | 25,384 | 24,299 | 24,743 | ||||||||||||
Intangible assets | 8,033 | 6,406 | 7,344 | 5,694 | ||||||||||||
Other assets | 4,894 | 4,728 | 4,764 | 4,577 | ||||||||||||
Separate account assets | 9 | 12 | 9 | 12 | ||||||||||||
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Total Assets | 3,116,499 | 2,897,591 | 3,075,470 | 2,859,211 | ||||||||||||
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Yang Mingsheng Chairman | Zhao Lijun Vice President in charge of Accounting Affairs | Li Mingguang Chief Actuary | Hu Jin Head of |
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4.1 Balance sheet as at 30 September 2018 (unaudited) (continued)
RMB million (Unless otherwise stated)
As at 30 September 2018 Group | As at 31 December 2017 Group | As at 30 September 2018 Company | As at 31 December 2017 Company | |||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||
Liabilities | ||||||||||||||||
Short-term borrowings | 1,013 | 780 | — | — | ||||||||||||
Financial liabilities at fair value through profit or loss | 2,970 | 2,529 | — | — | ||||||||||||
Derivative financial liabilities | 1,563 | — | 1,563 | — | ||||||||||||
Securities sold under agreements to repurchase | 119,626 | 87,309 | 116,894 | 85,316 | ||||||||||||
Premiums received in advance | 2,642 | 18,505 | 2,642 | 18,505 | ||||||||||||
Brokerage and commission payable | 4,798 | 5,659 | 4,798 | 5,659 | ||||||||||||
Reinsurance payable | 1,112 | 790 | 1,112 | 790 | ||||||||||||
Salary and welfare payable | 7,019 | 10,962 | 6,129 | 10,103 | ||||||||||||
Taxes payable | 3,820 | 6,887 | 3,671 | 6,720 | ||||||||||||
Claims payable | 49,291 | 44,820 | 49,291 | 44,820 | ||||||||||||
Policyholder dividends payable | 82,578 | 83,910 | 82,578 | 83,910 | ||||||||||||
Other payable | 10,841 | 10,254 | 9,893 | 9,722 | ||||||||||||
Policyholder deposits | 252,972 | 232,488 | 252,972 | 232,488 | ||||||||||||
Unearned premium reserves | 20,231 | 12,289 | 20,231 | 12,289 | ||||||||||||
Claim reserves | 15,211 | 13,778 | 15,211 | 13,778 | ||||||||||||
Reserves for life insurance | 2,058,961 | 1,915,324 | 2,058,961 | 1,915,324 | ||||||||||||
Reserves for long-term health insurance | 101,064 | 83,742 | 101,064 | 83,742 | ||||||||||||
Long-term borrowings | 19,354 | 18,014 | — | — | ||||||||||||
Deferred tax liabilities | 2,985 | 4,871 | 2,967 | 4,501 | ||||||||||||
Other liabilities | 23,261 | 19,358 | 15,708 | 13,047 | ||||||||||||
Separate account liabilities | 9 | 12 | 9 | 12 | ||||||||||||
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Total liabilities | 2,781,321 | 2,572,281 | 2,745,694 | 2,540,726 | ||||||||||||
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Equity | ||||||||||||||||
Share capital | 28,265 | 28,265 | 28,265 | 28,265 | ||||||||||||
Other equity instruments | 7,791 | 7,791 | 7,791 | 7,791 | ||||||||||||
Capital reserve | 54,730 | 55,142 | 54,073 | 54,485 | ||||||||||||
Accumulated other comprehensive income | (2,055 | ) | (3,544 | ) | (2,216 | ) | (4,335 | ) | ||||||||
Surplus reserve | 66,754 | 63,536 | 66,706 | 63,488 | ||||||||||||
General reserve | 30,637 | 30,541 | 30,172 | 30,172 | ||||||||||||
Retained earnings | 144,263 | 139,202 | 144,985 | 138,619 | ||||||||||||
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Attributable to equity holders of the Company | 330,385 | 320,933 | ||||||||||||||
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Non-controlling interests | 4,793 | 4,377 | ||||||||||||||
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Total equity | 335,178 | 325,310 | 329,776 | 318,485 | ||||||||||||
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Total liabilities and equity | 3,116,499 | 2,897,591 | 3,075,470 | 2,859,211 | ||||||||||||
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Yang Mingsheng Chairman | Zhao Lijun Vice President in charge of Accounting Affairs | Li Mingguang Chief Actuary | Hu Jin Head of Accounting Department |
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4.2 Income statement for the third quarter of 2018 (unaudited)
RMB million (Unless otherwise stated)
For the nine months ended 30 September | For the nine months ended 30 September | |||||||||||||||
2018 Group | 2017 Group | 2018 Company | 2017 Company | |||||||||||||
1. Operating income | 540,967 | 547,665 | 539,798 | 545,095 | ||||||||||||
Premiums earned | 457,295 | 438,937 | 457,295 | 438,937 | ||||||||||||
Premium income | 468,534 | 449,992 | 468,534 | 449,992 | ||||||||||||
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Including: Reinsurance premium income | 5 | 3 | 5 | 3 | ||||||||||||
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Less: Premiums ceded to reinsurers | (3,376 | ) | (2,737 | ) | (3,376 | ) | (2,737 | ) | ||||||||
Change in unearned premium reserves | (7,863 | ) | (8,318 | ) | (7,863 | ) | (8,318 | ) | ||||||||
Investment income | 83,870 | 99,306 | 83,623 | 98,460 | ||||||||||||
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Including: Share of profit of associates and joint ventures | 6,150 | 5,768 | 6,141 | 5,653 | ||||||||||||
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Fair value gains/(losses) | (5,412 | ) | 4,557 | (5,199 | ) | 4,473 | ||||||||||
Foreign exchange gains/(losses) | (411 | ) | 9 | 318 | (332 | ) | ||||||||||
Gains/(losses) on disposal of assets | 18 | 2 | 18 | 1 | ||||||||||||
Other gains | 19 | 11 | 14 | 7 | ||||||||||||
Other operating income | 5,588 | 4,843 | 3,729 | 3,549 | ||||||||||||
2. Operating expenses | (515,607 | ) | (514,986 | ) | (513,916 | ) | (513,863 | ) | ||||||||
Surrenders | (107,826 | ) | (85,651 | ) | (107,826 | ) | (85,651 | ) | ||||||||
Claims expense | (143,524 | ) | (162,180 | ) | (143,524 | ) | (162,180 | ) | ||||||||
Less: Claims recoverable from reinsurers | 1,642 | 1,012 | 1,642 | 1,012 | ||||||||||||
Increase in insurance contracts reserve | (162,355 | ) | (165,836 | ) | (162,355 | ) | (165,836 | ) | ||||||||
Less: Insurance reserves recoverable from reinsurers | 657 | 481 | 657 | 481 | ||||||||||||
Policyholder dividends resulting from participation in profits | (11,706 | ) | (15,914 | ) | (11,706 | ) | (15,914 | ) | ||||||||
Tax and surcharges | (512 | ) | (501 | ) | (444 | ) | (475 | ) | ||||||||
Underwriting and policy acquisition costs | (48,452 | ) | (49,581 | ) | (48,452 | ) | (49,581 | ) | ||||||||
Administrative expenses | (23,528 | ) | (22,017 | ) | (22,089 | ) | (20,754 | ) | ||||||||
Less: Expenses recoverable from reinsurers | 196 | 548 | 196 | 548 | ||||||||||||
Other operating expenses | (14,603 | ) | (13,158 | ) | (14,434 | ) | (13,324 | ) | ||||||||
Impairment losses | (5,596 | ) | (2,189 | ) | (5,581 | ) | (2,189 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
3. Operating profit | 25,360 | 32,679 | 25,882 | 31,232 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Add:Non-operating income | 43 | 53 | 32 | 53 | ||||||||||||
Less:Non-operating expenses | (317 | ) | (169 | ) | (317 | ) | (166 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
4. Net profit before income tax | 25,086 | 32,563 | 25,597 | 31,119 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Less: Income tax expenses | (4,778 | ) | (5,346 | ) | (4,519 | ) | (5,097 | ) | ||||||||
|
|
|
|
|
|
|
|
Yang Mingsheng Chairman | Zhao Lijun Vice President in charge of Accounting Affairs | Li Mingguang Chief Actuary | Hu Jin Head of Accounting Department |
11
4.2 Income statement for the third quarter of 2018 (unaudited) (continued)
RMB million (Unless otherwise stated)
For the nine months ended 30 September | For the nine months ended 30 September | |||||||||||||||
2018 Group | 2017 Group | 2018 Company | 2017 Company | |||||||||||||
5. Net profit | 20,308 | 27,217 | 21,078 | 26,022 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
According to operating continuity: | ||||||||||||||||
– Net profit from continuing operations | 20,308 | 27,217 | 21,078 | 26,022 | ||||||||||||
– Net profit from discontinuing operations | — | — | — | — | ||||||||||||
According to ownership of the company: | ||||||||||||||||
– Equity holders of the Company | 19,869 | 26,825 | ||||||||||||||
–Non-controlling interests | 439 | 392 | ||||||||||||||
6. Earnings per share | ||||||||||||||||
Basic earnings per share | RMB0.69 | RMB0.94 | ||||||||||||||
Diluted earnings per share | RMB0.69 | RMB0.94 | ||||||||||||||
7. Other Comprehensive income | 1,510 | (764 | ) | 2,119 | (1,558 | ) | ||||||||||
Other comprehensive income attributable to equity holders of the Company (net of tax) | 1,489 | (742 | ) | |||||||||||||
Other comprehensive income that may be reclassified to profit or loss | 1,489 | (742 | ) | 2,119 | (1,558 | ) | ||||||||||
Fair value gains/(losses) onavailable-for-sale financial assets | (8,314 | ) | (2,873 | ) | (7,496 | ) | (3,518 | ) | ||||||||
Less: Amount transferred to net profit from other comprehensive income | 10,720 | 1,748 | 10,718 | 1,746 | ||||||||||||
Portion of fair value changes onavailable-for-sale financial assets attributable to participating policyholders | (1,750 | ) | 668 | (1,750 | ) | 668 | ||||||||||
Other comprehensive income that may be transferred to profit or loss under the equity method | 632 | 32 | 520 | (287 | ) | |||||||||||
Exchanges differences on translating foreign operations | 201 | (317 | ) | 127 | (167 | ) | ||||||||||
Other comprehensive income that will not be reclassified to profit or loss | — | — | — | — | ||||||||||||
Other comprehensive income attributable tonon-controlling interests (net of tax) | 21 | (22 | ) | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
8. Total Comprehensive income | 21,818 | 26,453 | 23,197 | 24,464 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
– Attributable to equity holders of the Company | 21,358 | 26,083 | ||||||||||||||
– Attributable tonon-controlling interests | 460 | 370 |
Yang Mingsheng Chairman | Zhao Lijun Vice President in charge of Accounting Affairs | Li Mingguang Chief Actuary | Hu Jin Head of |
12
4.2 Income statement for the third quarter of 2018 (unaudited) (continued)
RMB million (Unless otherwise stated)
For the three months ended 30 September | For the three months ended 30 September | |||||||||||||||
2018 Group | 2017 Group | 2018 Company | 2017 Company | |||||||||||||
1. Operating income | 133,795 | 146,233 | 133,557 | 145,102 | ||||||||||||
Premiums earned | 108,310 | 102,667 | 108,310 | 102,667 | ||||||||||||
Premium income | 108,052 | 104,025 | 108,052 | 104,025 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Including: Reinsurance premium income | 2 | 2 | 2 | 2 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Less: Premiums ceded to reinsurers | (943 | ) | (975 | ) | (943 | ) | (975 | ) | ||||||||
Change in unearned premium reserves | 1,201 | (383 | ) | 1,201 | (383 | ) | ||||||||||
Investment income | 24,480 | 41,035 | 24,082 | 40,406 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Including: Share of profit of associates and joint ventures | 2,014 | 2,103 | 1,853 | 1,844 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Fair value gains/(losses) | (152 | ) | 844 | (106 | ) | 1,044 | ||||||||||
Foreign exchange gains/(losses) | (513 | ) | 51 | 194 | (154 | ) | ||||||||||
Gains/(losses) on disposal of assets | 11 | 3 | 11 | 2 | ||||||||||||
Other gains | 11 | 2 | 10 | 2 | ||||||||||||
Other operating income | 1,648 | 1,631 | 1,056 | 1,135 | ||||||||||||
2. Operating expenses | (130,049 | ) | (129,537 | ) | (129,588 | ) | (129,148 | ) | ||||||||
Surrenders | (7,713 | ) | (12,632 | ) | (7,713 | ) | (12,632 | ) | ||||||||
Claims expense | (47,932 | ) | (38,284 | ) | (47,932 | ) | (38,284 | ) | ||||||||
Less: Claims recoverable from reinsurers | 714 | 423 | 714 | 423 | ||||||||||||
Increase in insurance contracts reserve | (43,263 | ) | (46,481 | ) | (43,263 | ) | (46,481 | ) | ||||||||
Less: Insurance reserves recoverable from reinsurers | 107 | 138 | 107 | 138 | ||||||||||||
Policyholder dividends resulting from participation in profits | (2,394 | ) | (7,838 | ) | (2,394 | ) | (7,838 | ) | ||||||||
Tax and surcharges | (113 | ) | (131 | ) | (105 | ) | (125 | ) | ||||||||
Underwriting and policy acquisition costs | (12,745 | ) | (12,767 | ) | (12,745 | ) | (12,767 | ) | ||||||||
Administrative expenses | (7,777 | ) | (7,568 | ) | (7,277 | ) | (7,076 | ) | ||||||||
Less: Expenses recoverable from reinsurers | 59 | 240 | 59 | 240 | ||||||||||||
Other operating expenses | (4,665 | ) | (4,135 | ) | (4,714 | ) | (4,244 | ) | ||||||||
Impairment losses | (4,327 | ) | (502 | ) | (4,325 | ) | (502 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
3. Operating profit | 3,746 | 16,696 | 3,969 | 15,954 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Add:Non-operating income | 19 | 12 | 15 | 13 | ||||||||||||
Less:Non-operating expenses | (126 | ) | (74 | ) | (126 | ) | (74 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
4. Net profit before income tax | 3,639 | 16,634 | 3,858 | 15,893 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Less: Income tax expenses | (34 | ) | (1,909 | ) | 59 | (1,836 | ) | |||||||||
|
|
|
|
|
|
|
|
Yang Mingsheng Chairman | Zhao Lijun Vice President in charge of Accounting Affairs | Li Mingguang Chief Actuary | Hu Jin Head of |
13
4.2 Income statement for the third quarter of 2018 (unaudited) (continued)
RMB million (Unless otherwise stated)
For the three months ended 30 September | For the three months ended 30 September | |||||||||||||||||
2018 Group | 2017 Group | 2018 Company | 2017 Company | |||||||||||||||
5. | Net profit | 3,605 | 14,725 | 3,917 | 14,057 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||||
According to operating continuity: | ||||||||||||||||||
– Net profit from continuing operations | 3,605 | 14,725 | 3,917 | 14,057 | ||||||||||||||
– Net profit from discontinuing operations | — | — | — | — | ||||||||||||||
According to ownership of the company: | ||||||||||||||||||
– Equity holders of the Company | 3,446 | 14,583 | ||||||||||||||||
–Non-controlling interests | 159 | 142 | ||||||||||||||||
6. | Earnings per share | |||||||||||||||||
Basic earnings per share | RMB0.12 | RMB0.51 | ||||||||||||||||
Diluted earnings per share | RMB0.12 | RMB0.51 | ||||||||||||||||
7. | Other Comprehensive income | 3,759 | (376 | ) | 2,909 | (175 | ) | |||||||||||
Other comprehensive income attributable to equity holders of the Company (net of tax) | 3,740 | (367 | ) | |||||||||||||||
Other comprehensive income that may be reclassified to profit or loss | 3,740 | (367 | ) | 2,909 | (175 | ) | ||||||||||||
Fair value gains/(losses) onavailable-for-sale financial assets | (3,058 | ) | 750 | (3,600 | ) | 939 | ||||||||||||
Less: Amount transferred to net profit from other comprehensive income | 7,401 | (1,511 | ) | 7,391 | (1,510 | ) | ||||||||||||
Portion of fair value changes onavailable-for-sale financial assets attributable to participating policyholders | (945 | ) | 521 | (945 | ) | 521 | ||||||||||||
Other comprehensive income that may be transferred to profit or loss under the equity method | 3 | (15 | ) | 4 | (15 | ) | ||||||||||||
Exchanges differences on translating foreign operations | 339 | (112 | ) | 59 | (110 | ) | ||||||||||||
Other comprehensive income that will not be reclassified to profit or loss | — | — | — | — | ||||||||||||||
Other comprehensive income attributable tonon-controlling interests (net of tax) | 19 | (9 | ) | |||||||||||||||
|
|
|
|
|
|
|
| |||||||||||
8. | Total Comprehensive income | 7,364 | 14,349 | 6,826 | 13,882 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||||
– Attributable to equity holders of the Company | 7,186 | 14,216 | ||||||||||||||||
– Attributable tonon-controlling interests | 178 | 133 |
Yang Mingsheng Chairman | Zhao Lijun Vice President in charge of Accounting Affairs | Li Mingguang Chief Actuary | Hu Jin Head of Accounting Department |
14
4.3 Cash flow statement for the third quarter of 2018 (unaudited)
RMB million (Unless otherwise stated)
For the nine months ended 30 September | For the nine months ended 30 September | |||||||||||||||||
2018 Group | 2017 Group | 2018 Company | 2017 Company | |||||||||||||||
1. | Cash flows from operating activities | |||||||||||||||||
Premiums received | 435,288 | 405,749 | 435,288 | 405,749 | ||||||||||||||
Net increase in policyholder deposits | 20,860 | 35,751 | 20,860 | 35,751 | ||||||||||||||
Net cash received from financial assets at fair value through profit or loss | — | 80,879 | — | 81,654 | ||||||||||||||
Net cash received from financial liabilities at fair value through profit or loss | 898 | 1,356 | — | — | ||||||||||||||
Cash received from other operating activities | 7,372 | 5,205 | 3,740 | 3,670 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||
Sub-total of cash inflows from operating activities | 464,418 | 528,940 | 459,888 | 526,824 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||
Cash paid for claims | (246,874 | ) | (243,538 | ) | (246,874 | ) | (243,538 | ) | ||||||||||
Net cash paid for reinsurance business | (1,174 | ) | (371 | ) | (1,174 | ) | (371 | ) | ||||||||||
Cash paid for brokerage and commission fees | (49,313 | ) | (47,959 | ) | (49,313 | ) | (47,959 | ) | ||||||||||
Cash paid for policyholder dividends | (15,348 | ) | (16,819 | ) | (15,348 | ) | (16,819 | ) | ||||||||||
Cash paid to and for employees | (16,275 | ) | (14,012 | ) | (15,381 | ) | (13,336 | ) | ||||||||||
Cash paid for taxes and surcharges | (12,177 | ) | (6,205 | ) | (11,499 | ) | (5,633 | ) | ||||||||||
Net cash paid for financial assets at fair value through profit or loss | (28,336 | ) | — | (24,675 | ) | — | ||||||||||||
Cash paid for other operating activities | (18,488 | ) | (20,247 | ) | (16,398 | ) | (19,765 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||||
Sub-total of cash outflows from operating activities | (387,985 | ) | (349,151 | ) | (380,662 | ) | (347,421 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||||
Net cash flows from operating activities | 76,433 | 179,789 | 79,226 | 179,403 | ||||||||||||||
|
|
|
|
|
|
|
|
Yang Mingsheng Chairman | Zhao Lijun Vice President in charge of Accounting Affairs | Li Mingguang Chief Actuary | Hu Jin Head of Accounting Department |
15
4.3 Cash flow statement for the third quarter of 2018 (unaudited) (continued)
RMB million (Unless otherwise stated)
For the nine months ended 30 September | For the nine months ended 30 September | |||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||
Group | Group | Company | Company | |||||||||||||||
2. | Cash flows from investing activities | |||||||||||||||||
Cash received from sales and redemption of investments | 418,771 | 676,688 | 418,781 | 658,984 | ||||||||||||||
Cash received from investment income | 98,111 | 94,099 | 92,741 | 90,845 | ||||||||||||||
Net cash received from disposals of fixed assets, intangible assets and other long-term assets | 66 | 823 | 66 | 823 | ||||||||||||||
Net cash received from securities purchased under agreements to resell | 30,058 | 11,982 | 29,676 | 11,681 | ||||||||||||||
Net cash received from the disposal of subsidiaries and other business units | — | — | 351 | 92 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||
Sub-total of cash inflows from investing activities | 547,006 | 783,592 | 541,615 | 762,425 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||
Cash paid for investments | (588,831 | ) | (915,924 | ) | (583,792 | ) | (894,291 | ) | ||||||||||
Net increase in policy loans | (25,169 | ) | (8,753 | ) | (25,169 | ) | (8,753 | ) | ||||||||||
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | (10,650 | ) | (6,726 | ) | (9,437 | ) | (5,299 | ) | ||||||||||
Net cash paid for the acquisition of subsidiaries and other business units | (775 | ) | — | |||||||||||||||
Cash paid for other investing activities | (299 | ) | (399 | ) | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||||
Sub-total of cash outflows from investing activities | (625,724 | ) | (931,802 | ) | (618,398 | ) | (908,343 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||||
Net cash flows from investing activities | (78,718 | ) | (148,210 | ) | (76,783 | ) | (145,918 | ) | ||||||||||
|
|
|
|
|
|
|
|
Yang Mingsheng Chairman | Zhao Lijun Vice President in charge of Accounting Affairs | Li Mingguang Chief Actuary | Hu Jin Head of Accounting Department |
16
4.3 Cash flow statement for the third quarter of 2018 (unaudited) (continued)
RMB million (Unless otherwise stated)
For the nine months ended 30 September | For the nine months ended 30 September | |||||||||||||||||
2018 Group | 2017 Group | 2018 Company | 2017 Company | |||||||||||||||
3. | Cash flows from financing activities | |||||||||||||||||
Cash received from investment | 1,562 | 1,126 | — | — | ||||||||||||||
Including: Cash received from the investment ofnon-controlling interests by subsidiaries | 1,562 | 1,126 | ||||||||||||||||
Cash received from borrowings | 730 | 149 | — | — | ||||||||||||||
Net cash received from securities sold under agreements to repurchase | 32,317 | — | 31,578 | — | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||
Sub-total of cash inflows from financing activities | 34,609 | 1,275 | 31,578 | — | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||
Cash repaid to lenders | — | (28,000 | ) | — | (28,000 | ) | ||||||||||||
Cash paid for dividends and interests | (14,713 | ) | (12,162 | ) | (14,108 | ) | (10,582 | ) | ||||||||||
Net cash paid for securities sold under agreement to repurchase | — | (5,596 | ) | — | (6,991 | ) | ||||||||||||
Cash paid for other financing activities | (312 | ) | — | — | — | |||||||||||||
|
|
|
|
|
|
|
| |||||||||||
Sub-total of cash outflows from financing activities | (15,025 | ) | (45,758 | ) | (14,108 | ) | (45,573 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||||
Net cash flows from financing activities | 19,584 | (44,483 | ) | 17,470 | (45,573 | ) | ||||||||||||
|
|
|
|
|
|
|
| |||||||||||
4. | Effect of changes in foreign exchange rate on cash and cash equivalents | (3 | ) | (4 | ) | 121 | 14 | |||||||||||
|
|
|
|
|
|
|
| |||||||||||
5. | Net increase/(decrease) in cash and cash equivalents | 17,296 | (12,908 | ) | (20,034 | ) | (12,074 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||||
Add: Opening balance of cash and cash equivalents | 48,586 | 67,046 | 44,186 | 62,606 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||
6. | Closing balance of cash and cash equivalents | 65,882 | 54,138 | 64,220 | 50,532 | |||||||||||||
|
|
|
|
|
|
|
|
Yang Mingsheng Chairman | Zhao Lijun Vice President in charge of Accounting Affairs | Li Mingguang Chief Actuary | Hu Jin Head of |
17