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)
2020 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 first three quarters of 2020 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.
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1. | IMPORTANT NOTICE |
1.1 | The Board of Directors, Board of Supervisors, Directors, Supervisors and Senior Management of the Company 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 28 October 2020, the 2020 Third Quarter Report of the Company was considered and approved at the twenty-ninth meeting of the sixth session of the Board of the Company. Of the eleven Directors of the Company, nine attended the meeting. Chairman and Executive Director Mr. Wang Bin could not attend the meeting due to other businesses, and gave written authorization to Executive Director Mr. Su Hengxuan to act as proxy to attend, vote and chair the meeting. Non-executive Director Mr. Yuan Changqing could not attend the meeting due to other businesses, and gave written authorization to Executive Director Mr. Li Mingguang to act as proxy to attend and vote at the meeting. |
1.3 | The Company’s 2020 third quarter financial report is unaudited. |
1.4 | Mr. Wang Bin, Chairman of the Board of the Company, Ms. Huang Xiumei, Vice President in charge of financial affairs, Mr. Li Mingguang, Chief Actuary and Ms. Hu Jin, Head of the Financial Department, confirm that the financial statements in this 2020 third quarter report are true, accurate and complete. |
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2. | THE COMPANY’S BASIC INFORMATION |
2.1 | Major financial data |
Currency: RMB
As at 30 September 2020 | As at 31 December 2019 | Increase/(decrease) compared to 31 December 2019 | ||||||||||
Total assets (million) | 4,059,708 | 3,726,734 | 8.9 | % | ||||||||
Total equity holders’ equity (million) | 417,502 | 403,764 | 3.4 | % | ||||||||
Ordinary share holders’ equity per share (RMB per share) | 14.77 | 14.01 | 5.4 | % | ||||||||
For the nine months ended 30 September 2020 | For the nine months ended 30 September 2019 | Increase/(decrease) compared to the same period of 2019 | ||||||||||
Net cash flows from operating activities (million) | 238,918 | 207,380 | 15.2 | % | ||||||||
Net cash flows from operating activities per share (RMB per share) | 8.45 | 7.34 | 15.2 | % | ||||||||
Operating income (million) | 691,571 | 624,024 | 10.8 | % | ||||||||
Net profit attributable to equity holders of the Company (million) | 47,078 | 57,702 | -18.4 | % | ||||||||
Net profit attributable to equity holders of the Company after deducting non-recurring items (million) | 47,278 | 52,607 | -10.1 | % | ||||||||
Earnings per share (basic and diluted) (RMB per share) | 1.66 | 2.03 | -18.4 | % | ||||||||
Basic earnings per share after deducting non-recurring items (RMB per share) | 1.67 | 1.85 | -10.0 | % | ||||||||
Weighted average ROE (%) | 11.43 | 16.66 | | A decrease of 5.23 percentage points | | |||||||
Weighted average ROE after deducting non-recurring items (%) | 11.48 | 15.18 | | A decrease of 3.70 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 deducting non-recurring items”, the tail differences of the basic figures have been taken into account. |
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In the first three quarters of 2020, under the complicated and severe external environment, the Company closely adhered to the strategic deployment of “China Life Revitalization”, proceeded well with both pandemic control and business development, and actively pushed forward all tasks according to the requirements for high-quality development, thus maintaining the leading market position with a good development momentum. Firstly, the Company made steady progress in business development. In the first three quarters of 2020, the Company achieved revenues from insurance business1 of RMB543,553 million, an increase of 9.4% year on year. First-year regular premiums amounted to RMB106,049 million, an increase of 7.1% year on year. Renewal premiums amounted to RMB368,679 million, an increase of 10.1% year on year. Short-term insurance premiums amounted to RMB66,882 million, an increase of 9.3% year on year. Secondly, the Company achieved a continued growth in its business value. During the reporting period, the percentage of first-year regular premiums of the Company in premiums from new long-term insurance policies was 98.20%, an increase of 0.13 percentage point from the corresponding period of 2019. First-year regular premiums with a payment duration of ten years or longer amounted to RMB48,560 million, which accounted for 45.79% in first-year regular premiums. Prioritizing on business value growth, the Company continued to accelerate the development of its protection-oriented business. The percentage of premiums from designated protection-oriented products in first-year regular premiums increased by 1 percentage point year on year. During the reporting period, the value of new business for the first three quarters of 2020 grew by 2.7% year on year. The surrender rate was 0.85%, a decrease of 0.82 percentage point year on year. Thirdly, the sales force of the Company remained stable. With the “Yi Ti Duo Yuan” sales function restructuring (a strengthened individual agent business sector in coordination with other business channels) being completed, the Company maintained its sales force strategy of improving quality while expanding the size, and focused on its day-to-day management and quality enhancement, aiming for the high-quality development of its sales force. As at the end of the reporting period, the Company’s total sales force was 1.662 million, including 1.581 million agents in the individual agent business sector, which remained stable in general. Fourthly, the Company constantly enhanced its investment capability. As at the end of the reporting period, the Company’s investment assets reached RMB3,880,410 million, an increase of 8.5% from the end of 2019. The Company deepened the market-oriented reform of its investment management system, coordinated asset allocation and entrusted investment management at account level, and enhanced its investment capability through research of asset types and optimization of investment strategies. In the third quarter of 2020, the Company seized the opportunity of interest rate hike to increase allocation to government bonds with long durations, flexibly controlled the exposure of open market equity investments by taking advantage of market fluctuations, optimized the structure of its equity holdings, and took gains when appropriate. In the first three quarters of 2020, the Company achieved the gross investment income2 of RMB146,953 million, an increase of 9.3% year on year, and the gross investment yield3 was 5.36%. The net investment income4 was RMB122,723 million, an increase of 7.7% year on year, and the net investment yield5 was 4.47%.
1 | Revenues from insurance business is consistent with Premium Income in the attached income statement. |
2 | Gross investment income = Net investment income + Net realized gains on investment assets + Fair value gains/losses – Impairment losses of investment assets |
3 | Gross investment yield = {[(Gross investment income – Interest paid for financial assets sold under agreements to repurchase)/((Investment assets at the end of previous year – Financial assets sold under agreements to repurchase at the end of previous year – Derivative financial liabilities at the end of previous year + 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)]/274}×366 |
4 | Net investment income includes interest income from debt investments, interest income from deposits, dividend and bonus from equity investments, interest income from loans, net income from investment properties, and net income from investments in associates and joint ventures, etc. |
5 | Net investment yield = {[(Net investment income – Interest paid for financial assets sold under agreements to repurchase)/((Investment assets at the end of previous year – Financial asset sold under agreements to repurchase at the end of previous year + Investment assets at the end of the period – Financial assets sold under agreements to repurchase at the end of the period)/2]/274}×366 |
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During the reporting period, net profit attributable to equity holders of the Company was RMB47,078 million, a decrease of 18.4% year on year. As at the end of the reporting period, the core solvency ratio and comprehensive solvency ratio of the Company were 255.49% and 264.51%, respectively.
For the next stage, the Company will continue to adhere to the strategic deployment of “China Life Revitalization”, take proactive efforts to fulfill the overall targets for the year 2020, and make proper planning for the year 2021. In addition to the regular pandemic control and tasks of ensuring stability on the six fronts and maintaining security in the six areas, the Company will, according to the requirements for high-quality development, strengthen business value creation, push forward reform and innovation in greater depth, firmly maintain the bottom line of risk management and control, and strive to promote “China Life Revitalization” to a new stage.
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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 2020 | ||||||
Gains/(losses) on disposal of non-current assets | (7 | ) | (10 | ) | ||||
Government subsidies recognized in current gains/(losses) | 34 | 86 | ||||||
Donations | (179 | ) | (264 | ) | ||||
Net non-recurring items other than those mentioned above | (44 | ) | (70 | ) | ||||
Effect of income tax | 49 | 65 | ||||||
Attributable to non-controlling interests | (7 | ) | (7 | ) | ||||
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Total | (154 | ) | (200 | ) | ||||
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Note: | As an insurance company, investment (utilization of insurance funds) is one of the major businesses of the Company. Therefore, the non-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 and available-for-sale financial assets. |
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2.2 | Total number of shareholders and the particulars of top ten shareholders as at the end of the reporting period |
Total number of shareholders as at the end of the reporting period | Number of holders of A Shares: 134,473 | |||||||||||||||||
Number of holders of H Shares: 26,448 | ||||||||||||||||||
Particulars of top ten shareholders of the Company |
| Unit: Share | ||||||||||||||||
Name of shareholders | Nature of shareholder | Percentage of shareholding | Total number of shares | Number of to selling | Number of or frozen | |||||||||||||
China Life Insurance (Group) Company | State-owned legal person | 68.37 | % | 19,323,530,000 | — | — | ||||||||||||
HKSCC Nominees Limited | Overseas legal person | 25.92 | % | 7,327,000,696 | — | — | ||||||||||||
China Securities Finance Corporation Limited | State-owned legal person | 2.56 | % | 723,937,634 | — | — | ||||||||||||
Central Huijin Asset Management Limited | State-owned legal person | 0.42 | % | 119,719,900 | — | — | ||||||||||||
Hong Kong Securities Clearing Company Limited | Overseas legal person | 0.22 | % | 61,838,562 | — | — | ||||||||||||
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 | 0.04 | % | 12,032,229 | — | — | ||||||||||||
China International Television Corporation | State-owned legal person | 0.04 | % | 10,000,000 | — | — | ||||||||||||
Abu Dhabi Investment Authority | Overseas legal person | 0.03 | % | 9,174,546 | — | — | ||||||||||||
Qian Hai Life Insurance Co., Ltd – Huatai Portfolio of Participating Insurance Products | Other | 0.03 | % | 9,017,040 | — | — |
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 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. Industrial and Commercial Bank of China Limited –SSE 50 Exchange Traded Index Securities Investment Fund have Industrial and Commercial Bank of China Limited as its fund depositary. 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
(1) | Changes in key financial indicators and the reasons |
RMB million | ||||||||||||||
Key financial indicators | As at 30 September 2020 | As at 31 December 2019 | Increase/ (decrease) | Main reasons | ||||||||||
Total assets | 4,059,708 | 3,726,734 | 8.9 | % | Accumulation of the assets from insurance business and investment business | |||||||||
Total liabilities | 3,635,628 | 3,317,392 | 9.6 | % | An increase in insurance reserves | |||||||||
Total equity holders’ equity | 417,502 | 403,764 | 3.4 | % | The combined impact of total comprehensive income, profit distribution and redemption of core tier 2 capital securities during the reporting period |
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RMB million | ||||||||
Key financial indicators | For the nine months ended 30 September 2020 | For the nine months ended 30 September 2019 | Increase/ (decrease) | Main reasons | ||||
Operating profit | 54,131 | 62,071 | -12.8% | The combined impact of the update of discount rate assumptions for reserves of traditional insurance contracts and the change in gross investment income | ||||
Net profit attributable to equity holders of the Company | 47,078 | 57,702 | -18.4% | The combined impact of the update of discount rate assumptions for reserves of traditional insurance contracts, the adjustment of the pre-tax deduction policy of underwriting and policy acquisition costs adopted in the corresponding period of 2019 and the change in gross investment income |
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(2) | Material changes in major accounting items and the reasons |
RMB million
Key financial indicators | As at 30 September 2020 | As at 31 December 2019 | Increase/ (decrease) | Main reasons | ||||||||||
Securities purchased under agreements to resell | 25,390 | 4,467 | 468.4 | % | The needs for liquidity management | |||||||||
Premiums receivables | 40,529 | 17,281 | 134.5 | % | Accumulation of renewal premiums | |||||||||
Securities sold under agreements to repurchase | 70,598 | 118,088 | -40.2 | % | The needs for liquidity management | |||||||||
Unearned premium reserves | 25,642 | 13,001 | 97.2 | % | An increase in short-term insurance business and timing differences of business schedule | |||||||||
Other liabilities | 63,003 | 43,780 | 43.9 | % | An increase in payables to third-party holders of consolidated structured entities |
RMB million
Key financial indicators | For the nine months ended 30 September 2020 | For the nine months ended 30 September 2019 | Increase/ (decrease) | Main reasons | ||||||||||
Surrenders | 25,460 | 43,739 | -41.8 | % | A decrease in the surrender of certain products | |||||||||
Impairment losses | 11,691 | 3,915 | 198.6 | % | An increase in equity investment assets meeting impairment criteria |
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3.2 | Explanation and analysis of significant events and their impacts and solutions |
☐ Applicable ✓ Not applicable
3.3 | Undertakings not implemented on 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 other co-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 each co-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 other co-owners to complete the formalities in relation to the division of ownership of the properties.
Given that the change of ownership of the above two properties and related land use rights were directed by the co-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 the co-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 the co-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.
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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. Should there be any inconsistency between the Chinese and English versions, the Chinese version 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: | Wang Bin, Su Hengxuan, Li Mingguang | |
Non-executive Directors: | Yuan Changqing, Liu Huimin, Yin Zhaojun, Wang Junhui | |
Independent Non-executive Directors: | Chang Tso Tung Stephen, Robinson Drake Pike, | |
Tang Xin, Leung Oi-Sie Elsie |
Hong Kong, 28 October 2020
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4. | APPENDIX |
4.1 | Balance sheet as at 30 September 2020 (unaudited) |
RMB million (Unless otherwise stated) | ||||||||||||||||
As at 30 September | As at 31 December | As at 30 September | As at 31 December | |||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Group | Group | Company | Company | |||||||||||||
ASSETS | ||||||||||||||||
Assets | ||||||||||||||||
Cash fund | 54,463 | 55,082 | 49,270 | 48,794 | ||||||||||||
Financial assets at fair value through profit or loss | 162,292 | 141,606 | 133,551 | 117,471 | ||||||||||||
Derivative financial assets | — | 428 | — | 428 | ||||||||||||
Securities purchased under agreements to resell | 25,390 | 4,467 | 23,940 | 1,963 | ||||||||||||
Interest receivables | 49,867 | 41,455 | 49,014 | 40,855 | ||||||||||||
Premiums receivables | 40,529 | 17,281 | 40,529 | 17,281 | ||||||||||||
Receivables from reinsurers | 857 | 808 | 857 | 808 | ||||||||||||
Unearned premium reserves receivable from reinsurers | 565 | 369 | 565 | 369 | ||||||||||||
Claim reserves receivable from reinsurers | 195 | 145 | 195 | 145 | ||||||||||||
Reserves for life insurance receivables from reinsurers | 589 | 483 | 589 | 483 | ||||||||||||
Reserves for long-term health insurance receivables from reinsurers | 3,723 | 3,356 | 3,723 | 3,356 | ||||||||||||
Other receivables | 16,336 | 19,595 | 13,699 | 17,329 | ||||||||||||
Loans | 650,565 | 608,920 | 632,030 | 594,913 | ||||||||||||
Term deposits | 544,825 | 535,260 | 520,039 | 528,754 | ||||||||||||
Available-for-sale financial assets | 1,079,855 | 1,058,957 | 1,055,516 | 1,037,629 | ||||||||||||
Held-to-maturity investments | 1,115,462 | 928,751 | 1,114,573 | 927,892 | ||||||||||||
Long-term equity investments | 226,969 | 222,983 | 269,170 | 254,905 | ||||||||||||
Statutory deposits | 6,333 | 6,333 | 5,653 | 5,653 | ||||||||||||
Investment properties | 14,256 | 12,141 | 6,078 | 3,914 | ||||||||||||
Constructions in progress | 12,647 | 14,377 | 11,894 | 13,657 | ||||||||||||
Fixed assets | 37,263 | 36,343 | 35,504 | 34,545 | ||||||||||||
Right-of-use assets | 3,177 | 3,520 | 2,876 | 3,272 | ||||||||||||
Intangible assets | 8,021 | 8,070 | 7,306 | 7,340 | ||||||||||||
Deferred tax assets | 137 | 128 | — | — | ||||||||||||
Other assets | 5,382 | 5,866 | 5,171 | 5,590 | ||||||||||||
Separate account assets | 10 | 10 | 10 | 10 | ||||||||||||
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Total Assets | 4,059,708 | 3,726,734 | 3,981,752 | 3,667,356 | ||||||||||||
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Wang Bin | Huang Xiumei | Li Mingguang | Hu Jin | |||
Chairman | Vice President in | Chief Actuary | Head of | |||
charge of Accounting Affairs | Financial Department |
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4.1 | Balance sheet as at 30 September 2020 (unaudited) (continued) |
RMB million (Unless otherwise stated) | ||||||||||||||||
As at Group | As at Group | As at 30 September 2020 Company | As at 31 December 2019 Company | |||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||
Liabilities | ||||||||||||||||
Short-term borrowings | 1,624 | 1,115 | — | — | ||||||||||||
Financial liabilities at fair value through profit or loss | 2,708 | 3,859 | — | — | ||||||||||||
Securities sold under agreements to repurchase | 70,598 | 118,088 | 64,227 | 113,189 | ||||||||||||
Premiums received in advance | 15,923 | 60,898 | 15,923 | 60,898 | ||||||||||||
Brokerage and commission payable | 5,433 | 7,418 | 5,433 | 7,418 | ||||||||||||
Reinsurance payable | 1,514 | 817 | 1,514 | 817 | ||||||||||||
Salary and welfare payable | 9,752 | 12,223 | 8,680 | 11,048 | ||||||||||||
Taxes payable | 1,274 | 897 | 908 | 409 | ||||||||||||
Claims payable | 55,046 | 51,019 | 55,046 | 51,019 | ||||||||||||
Policyholder dividends payable | 110,749 | 112,593 | 110,749 | 112,593 | ||||||||||||
Other payable | 16,127 | 16,804 | 14,877 | 15,328 | ||||||||||||
Policyholder deposits | 288,350 | 267,794 | 288,350 | 267,794 | ||||||||||||
Unearned premium reserves | 25,642 | 13,001 | 25,642 | 13,001 | ||||||||||||
Claim reserves | 22,135 | 18,404 | 22,135 | 18,404 | ||||||||||||
Reserves for life insurance | 2,722,499 | 2,386,130 | 2,722,499 | 2,386,130 | ||||||||||||
Reserves for long-term health insurance | 159,897 | 135,201 | 159,897 | 135,201 | ||||||||||||
Long-term borrowings | 18,378 | 18,930 | — | — | ||||||||||||
Bonds payable | 34,991 | 34,990 | 34,991 | 34,990 | ||||||||||||
Lease liabilities | 2,721 | 3,091 | 2,436 | 2,842 | ||||||||||||
Deferred tax liabilities | 7,254 | 10,330 | 7,519 | 10,714 | ||||||||||||
Other liabilities | 63,003 | 43,780 | 23,955 | 22,283 | ||||||||||||
Separate account liabilities | 10 | 10 | 10 | 10 | ||||||||||||
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Total liabilities | 3,635,628 | 3,317,392 | 3,564,791 | 3,264,088 | ||||||||||||
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Equity | ||||||||||||||||
Share capital | 28,265 | 28,265 | 28,265 | 28,265 | ||||||||||||
Other equity instruments | — | 7,791 | — | 7,791 | ||||||||||||
Capital reserve | 53,783 | 55,009 | 53,035 | 54,327 | ||||||||||||
Accumulated other comprehensive income | 25,674 | 29,163 | 25,408 | 28,716 | ||||||||||||
Surplus reserve | 81,018 | 75,161 | 80,970 | 75,113 | ||||||||||||
General reserve | 37,982 | 37,888 | 37,304 | 37,304 | ||||||||||||
Retained earnings | 190,780 | 170,487 | 191,979 | 171,752 | ||||||||||||
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Attributable to equity holders of the Company | 417,502 | 403,764 | ||||||||||||||
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Non-controlling interests | 6,578 | 5,578 | ||||||||||||||
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Total equity | 424,080 | 409,342 | 416,961 | 403,268 | ||||||||||||
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Total liabilities and equity | 4,059,708 | 3,726,734 | 3,981,752 | 3,667,356 | ||||||||||||
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Wang Bin | Huang Xiumei | Li Mingguang | Hu Jin | |||
Chairman | Vice President in | Chief Actuary | Head of | |||
charge of Accounting Affairs | Financial Department |
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4.2 | Income statement for the third quarter of 2020 (unaudited) |
RMB million (Unless otherwise stated) | ||||||||||||||||
For the nine months ended 30 September | For the nine months ended 30 September | |||||||||||||||
2020 Group | 2019 Group | 2020 Company | 2019 Company | |||||||||||||
1 Operating income | 691,571 | 624,024 | 687,207 | 620,351 | ||||||||||||
Premiums earned | 526,355 | 480,521 | 526,355 | 480,521 | ||||||||||||
Premium income | 543,553 | 497,047 | 543,553 | 497,047 | ||||||||||||
Including: Reinsurance premium income | 1 | 3 | 1 | 3 | ||||||||||||
Less: Premiums ceded to reinsurers | (4,753 | ) | (4,038 | ) | (4,753 | ) | (4,038 | ) | ||||||||
Change in unearned premium reserves | (12,445 | ) | (12,488 | ) | (12,445 | ) | (12,488 | ) | ||||||||
Investment income | 156,593 | 126,239 | 155,501 | 125,142 | ||||||||||||
Including: Share of profit of associates and joint ventures | 6,974 | 8,712 | 8,010 | 8,857 | ||||||||||||
Other gains | 122 | 53 | 89 | 35 | ||||||||||||
Fair value gains/(losses) | 2,049 | 11,947 | 2,059 | 11,437 | ||||||||||||
Foreign exchange gains/(losses) | 143 | (27 | ) | (125 | ) | 295 | ||||||||||
Other operating income | 6,307 | 5,278 | 3,326 | 2,908 | ||||||||||||
Gains/(losses) on disposal of assets | 2 | 13 | 2 | 13 | ||||||||||||
2 Operating expenses | (637,440 | ) | (561,953 | ) | (634,837 | ) | (559,617 | ) | ||||||||
Surrenders | (25,460 | ) | (43,739 | ) | (25,460 | ) | (43,739 | ) | ||||||||
Claims expense | (102,073 | ) | (99,575 | ) | (102,073 | ) | (99,575 | ) | ||||||||
Less: Claims recoverable from reinsurers | 2,882 | 2,786 | 2,882 | 2,786 | ||||||||||||
Increase in insurance contracts reserve | (364,780 | ) | (295,086 | ) | (364,780 | ) | (295,086 | ) | ||||||||
Less: Insurance reserves recoverable from reinsurers | 523 | 788 | 523 | 788 | ||||||||||||
Policyholder dividends resulting from participation in profits | (22,775 | ) | (17,810 | ) | (22,775 | ) | (17,810 | ) | ||||||||
Tax and surcharges | (854 | ) | (620 | ) | (717 | ) | (529 | ) | ||||||||
Underwriting and policy acquisition costs | (70,207 | ) | (63,011 | ) | (70,207 | ) | (63,011 | ) | ||||||||
Administrative expenses | (26,644 | ) | (26,506 | ) | (25,066 | ) | (25,028 | ) | ||||||||
Less: Expenses recoverable from reinsurers | 664 | 202 | 664 | 202 | ||||||||||||
Other operating expenses | (17,025 | ) | (15,467 | ) | (16,137 | ) | (14,792 | ) | ||||||||
Impairment losses | (11,691 | ) | (3,915 | ) | (11,691 | ) | (3,823 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
3 Operating profit | 54,131 | 62,071 | 52,370 | 60,734 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Add: Non-operating income | 84 | 76 | 78 | 54 | ||||||||||||
Less: Non-operating expenses | (395 | ) | (190 | ) | (385 | ) | (184 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
4 Net profit before income tax | 53,820 | 61,957 | 52,063 | 60,604 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Less: Income tax expenses | (5,899 | ) | (3,699 | ) | (5,145 | ) | (3,327 | ) | ||||||||
|
|
|
|
|
|
|
|
Wang Bin | Huang Xiumei | Li Mingguang | Hu Jin | |||
Chairman | Vice President in | Chief Actuary | Head of | |||
charge of Accounting Affairs | Financial Department |
14
4.2 | Income statement for the third quarter of 2020 (unaudited) (continued) |
RMB million (Unless otherwise stated) | ||||||||||||||||
For the nine months | For the nine months | |||||||||||||||
ended 30 September | ended 30 September | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Group | Group | Company | Company | |||||||||||||
5 Net profit | 47,921 | 58,258 | 46,918 | 57,277 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
According to operating continuity: | ||||||||||||||||
– Net profit from continuing operations | 47,921 | 58,258 | 46,918 | 57,277 | ||||||||||||
According to ownership of the company: | ||||||||||||||||
– Equity holders of the Company | 47,078 | 57,702 | ||||||||||||||
– Non-controlling interests | 843 | 556 | ||||||||||||||
6 Earnings per share | ||||||||||||||||
Basic earnings per share | RMB1.66 | RMB2.03 | ||||||||||||||
Diluted earnings per share | RMB1.66 | RMB2.03 | ||||||||||||||
7 Other Comprehensive income | (3,479 | ) | 20,424 | (3,308 | ) | 20,149 | ||||||||||
Other comprehensive income attributable to equity holders of the Company (net of tax) | (3,489 | ) | 20,370 | |||||||||||||
Other comprehensive income that may be reclassified to profit or loss | (3,507 | ) | 20,370 | (3,326 | ) | 20,149 | ||||||||||
Fair value gains/(losses) on available-for-sale financial assets | 60 | 32,911 | 73 | 32,730 | ||||||||||||
Less: Amount transferred to net profit from other comprehensive income | (7,967 | ) | (5,010 | ) | (7,899 | ) | (4,975 | ) | ||||||||
Portion of fair value changes on available-for-sale financial assets attributable to participating policyholders | 5,309 | (8,122 | ) | 5,309 | (8,122 | ) | ||||||||||
Other comprehensive income that may be transferred to profit or loss under the equity method | (928 | ) | 328 | (779 | ) | 330 | ||||||||||
Exchanges differences on translating foreign operations | 19 | 263 | (30 | ) | 186 | |||||||||||
Other comprehensive income that will not be reclassified to profit or loss | 18 | — | 18 | — | ||||||||||||
Other comprehensive income that may not be transferred to profit or loss under the equity method | 18 | — | 18 | — | ||||||||||||
Other comprehensive income attributable to non-controlling interests (net of tax) | 10 | 54 | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||
8 Total Comprehensive income | 44,442 | 78,682 | 43,610 | 77,426 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
– Attributable to equity holders of the Company | 43,589 | 78,072 | ||||||||||||||
– Attributable to non-controlling interests | 853 | 610 |
Wang Bin | Huang Xiumei | Li Mingguang | Hu Jin | |||
Chairman | Vice President in | Chief Actuary | Head of | |||
charge of Accounting Affairs | Financial Department |
15
4.2 | Income statement for the third quarter of 2020 (unaudited) (continued) |
RMB million (Unless otherwise stated) | ||||||||||||||||
For the three months ended 30 September | For the three months ended 30 September | |||||||||||||||
2020 Group | 2019 Group | 2020 Company | 2019 Company | |||||||||||||
1 Operating income | 177,836 | 166,791 | 176,341 | 165,915 | ||||||||||||
Premiums earned | 118,419 | 119,224 | 118,419 | 119,224 | ||||||||||||
Premium income | 116,186 | 119,071 | 116,186 | 119,071 | ||||||||||||
Including: Reinsurance premium income | — | 1 | — | 1 | ||||||||||||
Less: Premiums ceded to reinsurers | (1,640 | ) | (1,397 | ) | (1,640 | ) | (1,397 | ) | ||||||||
Change in unearned premium reserves | 3,873 | 1,550 | 3,873 | 1,550 | ||||||||||||
Investment income | 58,834 | 45,819 | 58,376 | 45,351 | ||||||||||||
Including: Share of profit of associates and joint ventures | 2,284 | 3,047 | 2,338 | 2,927 | ||||||||||||
Other gains | 44 | 31 | 19 | 13 | ||||||||||||
Fair value gains/(losses) | (1,706 | ) | 98 | (1,351 | ) | 126 | ||||||||||
Foreign exchange gains/(losses) | 168 | (57 | ) | (235 | ) | 257 | ||||||||||
Other operating income | 2,079 | 1,663 | 1,115 | 931 | ||||||||||||
Gains/(losses) on disposal of assets | (2 | ) | 13 | (2 | ) | 13 | ||||||||||
2 Operating expenses | (159,354 | ) | (143,678 | ) | (158,721 | ) | (143,116 | ) | ||||||||
Surrenders | (7,805 | ) | (7,563 | ) | (7,805 | ) | (7,563 | ) | ||||||||
Claims expense | (34,676 | ) | (30,392 | ) | (34,676 | ) | (30,392 | ) | ||||||||
Less: Claims recoverable from reinsurers | 1,198 | 956 | 1,198 | 956 | ||||||||||||
Increase in insurance contracts reserve | (75,895 | ) | (68,039 | ) | (75,895 | ) | (68,039 | ) | ||||||||
Less: Insurance reserves recoverable from reinsurers Policyholder dividends resulting from participation in profits | | 220 (8,268 | ) | | 261 (6,974 | ) | | 220 (8,268 | ) | | 261 (6,974 | ) | ||||
Tax and surcharges | (216 | ) | (143 | ) | (189 | ) | (128 | ) | ||||||||
Underwriting and policy acquisition costs | (13,689 | ) | (17,416 | ) | (13,689 | ) | (17,416 | ) | ||||||||
Administrative expenses | (8,587 | ) | (8,693 | ) | (7,993 | ) | (8,275 | ) | ||||||||
Less: Expenses recoverable from reinsurers | 457 | 84 | 457 | 84 | ||||||||||||
Other operating expenses | (5,777 | ) | (5,210 | ) | (5,765 | ) | (5,252 | ) | ||||||||
Impairment losses | (6,316 | ) | (549 | ) | (6,316 | ) | (378 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
3 Operating profit | 18,482 | 23,113 | 17,620 | 22,799 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Add: Non-operating income | 18 | 27 | 16 | 14 | ||||||||||||
Less: Non-operating expenses | (244 | ) | (76 | ) | (241 | ) | (75 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
4 Net profit before income tax | 18,256 | 23,064 | 17,395 | 22,738 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Less: Income tax expenses | (1,397 | ) | (2,735 | ) | (1,125 | ) | (2,672 | ) | ||||||||
|
|
|
|
|
|
|
|
Wang Bin | Huang Xiumei | Li Mingguang | Hu Jin | |||
Chairman | Vice President in | Chief Actuary | Head of | |||
charge of Accounting Affairs | Financial Department |
16
4.2 | Income statement for the third quarter of 2020 (unaudited) (continued) |
RMB million (Unless otherwise stated) | ||||||||||||||||
For the three months | For the three months | |||||||||||||||
ended 30 September | ended 30 September | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Group | Group | Company | Company | |||||||||||||
5 Net profit | 16,859 | 20,329 | 16,270 | 20,066 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
According to operating continuity: | ||||||||||||||||
– Net profit from continuing operations | 16,859 | 20,329 | 16,270 | 20,066 | ||||||||||||
According to ownership of the company: | ||||||||||||||||
– Equity holders of the Company | 16,543 | 20,103 | ||||||||||||||
– Non-controlling interests | 316 | 226 | ||||||||||||||
6 Earnings per share | ||||||||||||||||
Basic earnings per share | RMB0.59 | RMB0.71 | ||||||||||||||
Diluted earnings per share | RMB0.59 | RMB0.71 | ||||||||||||||
7 Other Comprehensive income | (5,763 | ) | 207 | (5,418 | ) | 96 | ||||||||||
Other comprehensive income attributable to equity holders of the Company (net of tax) | (5,754 | ) | 192 | |||||||||||||
Other comprehensive income that may be reclassified to profit or loss | (5,880 | ) | 192 | (5,544 | ) | 96 | ||||||||||
Fair value gains/(losses) on available-for- sale financial assets | (8,919 | ) | 1,297 | (8,605 | ) | 1,190 | ||||||||||
Less: Amount transferred to net profit from other comprehensive income | 123 | (1,463 | ) | 136 | (1,455 | ) | ||||||||||
Portion of fair value changes on available-for-sale financial assets attributable to participating policyholders | 3,937 | 236 | 3,937 | 236 | ||||||||||||
Other comprehensive income that may be transferred to profit or loss under the equity method | (965 | ) | (77 | ) | (963 | ) | (50 | ) | ||||||||
Exchanges differences on translating foreign operations | (56 | ) | 199 | (49 | ) | 175 | ||||||||||
Other comprehensive income that will not be reclassified to profit or loss | 126 | — | 126 | — | ||||||||||||
Other comprehensive income that may not be transferred to profit or loss under the equity method | 126 | — | 126 | — | ||||||||||||
Other comprehensive income attributable to non-controlling interests (net of tax) | (9 | ) | 15 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||
8 Total Comprehensive income | 11,096 | 20,536 | 10,852 | 20,162 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
– Attributable to equity holders of the Company | 10,789 | 20,295 | ||||||||||||||
– Attributable to non-controlling interests | 307 | 241 |
Wang Bin | Huang Xiumei | Li Mingguang | Hu Jin | |||
Chairman | Vice President in | Chief Actuary | Head of | |||
charge of Accounting Affairs | Financial Department |
17
4.3 | Cash flow statement for the third quarter of 2020 (unaudited) |
RMB million (Unless otherwise stated)
For the nine months ended 30 September | For the nine months ended 30 September | |||||||||||||||
2020 Group | 2019 Group | 2020 Company | 2019 Company | |||||||||||||
1 Cash flows from operating activities | ||||||||||||||||
Premiums received | 476,464 | 433,497 | 476,464 | 433,497 | ||||||||||||
Net increase in policyholder deposits | 20,899 | 15,761 | 20,899 | 15,761 | ||||||||||||
Net cash received from financial assets at fair value through profit or loss | — | 15,256 | — | 26,887 | ||||||||||||
Net cash received from financial liabilities at fair value through profit or loss | 155 | 1,196 | — | — | ||||||||||||
Cash received from other operating activities | 12,394 | 7,579 | 5,074 | 3,985 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Sub-total of cash inflows from operating activities | 509,912 | 473,289 | 502,437 | 480,130 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Cash paid for claims | (123,506 | ) | (141,881 | ) | (123,506 | ) | (141,881 | ) | ||||||||
Net cash paid for reinsurance business | (559 | ) | (764 | ) | (559 | ) | (764 | ) | ||||||||
Cash paid for brokerage and commission fees | (72,192 | ) | (61,531 | ) | (72,192 | ) | (61,531 | ) | ||||||||
Cash paid for policyholder dividends | (17,524 | ) | (11,466 | ) | (17,524 | ) | (11,466 | ) | ||||||||
Cash paid to and for employees | (18,224 | ) | (18,296 | ) | (17,090 | ) | (17,280 | ) | ||||||||
Cash paid for taxes and surcharges | (13,476 | ) | (11,590 | ) | (11,830 | ) | (10,459 | ) | ||||||||
Net cash paid for financial assets at fair value through profit or loss | (4,206 | ) | — | (243 | ) | — | ||||||||||
Cash paid for other operating activities | (21,307 | ) | (20,381 | ) | (18,253 | ) | (17,183 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Sub-total of cash outflows from operating activities | (270,994 | ) | (265,909 | ) | (261,197 | ) | (260,564 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net cash flows from operating activities | 238,918 | 207,380 | 241,240 | 219,566 | ||||||||||||
|
|
|
|
|
|
|
|
Wang Bin Chairman | Huang Xiumei Vice President in charge of Accounting Affairs | Li Mingguang Chief Actuary | Hu Jin Head of Financial Department |
18
4.3 | Cash flow statement for the third quarter of 2020 (unaudited) (continued) |
RMB million (Unless otherwise stated)
For the nine months ended 30 September | For the nine months ended 30 September | |||||||||||||||
2020 Group | 2019 Group | 2020 Company | 2019 Company | |||||||||||||
2 Cash flows from investing activities | ||||||||||||||||
Cash received from sales and redemption of investments | 462,567 | 646,322 | 453,676 | 635,534 | ||||||||||||
Cash received from investment income | 113,316 | 103,842 | 108,924 | 103,767 | ||||||||||||
Net cash received from disposals of fixed assets, intangible assets and other long-term assets | 29 | 35 | 29 | 35 | ||||||||||||
Net cash received from securities purchased under agreements to resell | — | 7,981 | — | 7,483 | ||||||||||||
Net cash received from the disposal of subsidiaries and other business units | 1,235 | 1,896 | 2,844 | 2,077 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Sub-total of cash inflows from investing activities | 577,147 | 760,076 | 565,473 | 748,896 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Cash paid for investments | (708,414 | ) | (898,683 | ) | (679,385 | ) | (893,796 | ) | ||||||||
Net increase in policy loans | (18,171 | ) | (20,588 | ) | (18,171 | ) | (20,588 | ) | ||||||||
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | (4,617 | ) | (6,078 | ) | (4,281 | ) | (5,484 | ) | ||||||||
Net cash paid from securities purchased under agreements to resell | (21,203 | ) | — | (21,977 | ) | — | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Sub-total of cash outflows from investing activities | (752,405 | ) | (925,349 | ) | (723,814 | ) | (919,868 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net cash flows from investing activities | (175,258 | ) | (165,273 | ) | (158,341 | ) | (170,972 | ) | ||||||||
|
|
|
|
|
|
|
|
Wang Bin Chairman | Huang Xiumei Vice President in charge of Accounting Affairs | Li Mingguang Chief Actuary | Hu Jin Head of Financial Department |
19
4.3 | Cash flow statement for the third quarter of 2020 (unaudited) (continued) |
RMB million (Unless otherwise stated) | ||||||||||||||||
For the nine months ended 30 September | For the nine months ended 30 September | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Group | Group | Company | Company | |||||||||||||
3 Cash flows from financing activities | ||||||||||||||||
Cash received from investment | 17,551 | 7,034 | — | — | ||||||||||||
Including: Cash received from the investment of non-controlling interests by subsidiaries | 17,551 | 7,034 | ||||||||||||||
Cash received from borrowings | 4,141 | 35,014 | — | 34,988 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Sub-total of cash inflows from financing activities | 21,692 | 42,048 | — | 34,988 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Cash repaid to lenders | (12,898 | ) | (565 | ) | (9,051 | ) | — | |||||||||
Cash paid for dividends and interests and repaid for lenders | (24,090 | ) | (6,620 | ) | (23,372 | ) | (6,041 | ) | ||||||||
Net cash paid for securities sold under agreements to repurchase | (46,834 | ) | (65,595 | ) | (48,962 | ) | (66,673 | ) | ||||||||
Cash paid for other financing activities | (2,292 | ) | (1,383 | ) | (1,085 | ) | (825 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Sub-total of cash outflows from financing activities | (86,114 | ) | (74,163 | ) | (82,470 | ) | (73,539 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net cash flows from financing activities | (64,422 | ) | (32,115 | ) | (82,470 | ) | (38,551 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
4 Effect of changes in foreign exchange rate on cash and cash equivalents | 2 | 116 | 43 | 78 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
5 Net increase/(decrease) in cash and cash equivalents | (760 | ) | 10,108 | 472 | 10,121 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Add: Opening balance of cash and cash equivalents | 53,306 | 50,809 | 48,802 | 47,904 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
6 Closing balance of cash and cash equivalents | 52,546 | 60,917 | 49,274 | 58,025 | ||||||||||||
|
|
|
|
|
|
|
|
Wang Bin Chairman | Huang Xiumei Vice President in charge of Accounting Affairs | Li Mingguang Chief Actuary | Hu Jin Head of Financial Department |
20