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Expert: Increased shares in CITIC Securities to benefit China Life in the long run |
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Written by Administrator
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Thursday, 29 June 2006 |
BEIJING, June 29 (InfoChina) – The positive effect of increasing shares in CITIC Securities by China Life began to surface since the first day after the purchase, but experts generally hold that the benefits will be long-term ones.
On June 28, the share price of CITIC Securities rose by 5.02% on the Shanghai stock market, which means value of the 500 million shares of CITIC Securities (SH: 600030) that China Life Insurance Co., Ltd. (NYSE: LFC, HK: 2628) and its parent company China Life Insurance Group bought on June 27 has increased by 3.2 billion yuan.
But the value increase is merely on paper since China Life by no means will sell the stake to make profit in the short term, analysts say. They deem that China Life won’t sell the stake until at least one year later.
Equity in CITIC Securities will help China Life ease financial pressure, boost investment yield and broaden investment channels, said Yang Chao, the president of the group company and chairman of the listed one.
Analysts are generally optimistic about the profitability of CITIC. The 1Q financial report of CITIC shows its earnings per share (EPS) stands at 0.038 yuan, which is estimated to rise to 0.278 and 0.452 yuan in 2006 and 2007 respectively.
The good financial prospect of CITIC will partly ease the high-interest policy loss China Life inherited from its pre-listing parent company, which may measure 100 billion yuan in volume. |
China Stock News