EX-99.1

EX-99.1 2 d267385dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

LOGO

CHINA LIFE INSURANCE COMPANY LIMITED

(A joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 2628)

2016 Third Quarter Report

This announcement is made by China Life Insurance Company Limited 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 2016 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 are identical to the relevant data under International Financial Reporting Standards.

1.	Important Notice

1.1

The Company’s Board of Directors, the Supervisory Committee, 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

Of the eleven Directors of the Company, eight attended the Board Meeting. Executive Directors Lin Dairen, Xu Hengping and Xu Haifeng, Non-executive Director Wang Sidong, and Independent Non-executive Directors Chang Tso Tung Stephen, Tang Xin and Leung Oi-Sie Elsie attended the meeting, Non-executive Director Liu Jiade attended the meeting by way of telephony. 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 proxy to chair and vote at the meeting. Non-executive Director Miao Jianmin and Independent Non-executive Director Robinson Drake Pike could not attend the meeting due to other business and gave written authorization to Non-executive Director Wang Sidong and Independent Non-executive Director Chang Tso Tung Stephen to act as proxies to attend and vote at the meeting respectively.

1.3

The Company’s 2016 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 Mr. Zheng Zhiwu, Head of the Accounting Department, confirm that the financial reports in this 2016 third quarter report are true, accurate and complete.

2.	Major Financial Data and the Particulars of Shareholders of the Company

2.1 Major

financial data

(Currency: RMB)


	As at 30 September 2016	As at 31 December 2015	Increase/(decrease) compared to 31 December 2015
Total assets (million)	2,681,156	2,448,315	9.5%
Total equity holders’ equity (million)	308,972	322,492	-4.2%
Ordinary share holders’ equity per share (RMB per share)	10.66	11.13	-4.3%
	For the nine months ended 30 September 2016	For the nine months ended 30 September 2015	Increase/(decrease) compared to the same period of 2015
Net cash flows from operating activities (million)	11,728	37,511	-68.7%
Net cash flows from operating activities per share (RMB per share)	0.41	1.33	-68.7%
	For the nine months ended 30 September 2016	For the nine months ended 30 September 2015	Increase/(decrease) compared to the same period of 2015
Operating income (million)	456,448	424,007	7.7%
Net profit attributable to equity holders of the Company (million)	13,528	33,837	-60.0%
Net profit attributable to equity holders of the Company after deducting non-recurring items (million)	13,641	33,911	-59.8%
Earnings per share (basic and diluted) (RMB per share)	0.47	1.20	-60.9%
Basic earnings per share after deducting non-recurring items (RMB per share)	0.47	1.20	-60.6%
Weighted average ROE (%)	4.29	11.67	A decrease of 7.38 percentage points
Weighted average ROE after deducting non-recurring items (%)	4.33	11.70	A decrease of 7.37 percentage points

Note:

When calculating the changing ratios 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.

As at 30 September 2016, investment assets of the Company were RMB2,454,521 million. For the nine months ended 30 September 2016, the net investment yield¹ was 4.51%, the gross investment yield² was 4.43%, the surrender rate was 3.11%, and premiums earned was RMB368,078 million, an increase of 20.7% compared with the corresponding period of 2015.

Non-recurring Items and Amount

RMB million


Non-recurring items	For the Reporting Period (from July to September)			For the nine months ended 30 September 2016
Gains/(losses) on disposal of non-current assets		–			18
Government subsidies included in current gains/(losses)		2			14
Net non-operating income and expenses other than those mentioned above		(45	)		(180	)
Effect of income tax		11			37
Attributable to non-controlling interests		–			(2	)
Total		(32	)		(113	)

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.

¹	Net investment income mainly includes interest income from debt securities and bank deposits, dividends from equity securities, interest income from loans and net income from investment properties, etc.

²	Gross investment yield ={[(Net investment income + Spread income of investment assets + Fair value gains/ (losses) – Impairment losses of investment assets)/((Investment assets at the beginning of the period + Investment assets at the end of the period)/2)]/274}×366

2.2

Total 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 A Share shareholders: 135,942
	Number of H Share shareholders: 30,512
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	25.87%	7,313,184,811	–	–
China Securities Finance Corporation Limited	State-owned legal person	2.09%	591,848,451	–	–
Central Huijin Asset Management Limited	State-owned legal person	0.42%	119,719,900	–	–
Industrial and Commercial Bank of China Limited – China Southern Flexible Allocation of Consumption and Vitality of Hybrid Securities Investment Fund	Other	0.21%	59,651,510	–	–
China National Nuclear Corporation	State-owned legal person	0.07%	20,000,000	–	–
China International Television Corporation	State-owned legal person	0.07%	18,452,300	–	–
Hong Kong Securities Clearing Company Limited	Overseas legal person	0.06%	18,335,255	–	–
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 Index Securities Investment Fund	Other	0.04%	12,401,837	–	–
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 HKSE 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. 2. Both Industrial and Commercial Bank of China Limited – China Southern Flexible Allocation of Consumption and Vitality of Hybrid Securities Investment Fund and Industrial and Commercial Bank of China Limited – SSE 50 Exchange Traded Index Securities Investment Fund have 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.

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 their reasons

RMB million


Key financial indicators	As at 30 September 2016		As at 31 December 2015		Increase/ (decrease)		Main reasons
Total assets		2,681,156		2,448,315		9.5%	Accumulation of insurance business assets and investment assets
Total liabilities		2,368,203		2,122,101		11.6%	Increase in insurance reserves
Total equity holders’ equity		308,972		322,492		-4.2%	The impact of the change of fair value gains/ (losses) of available-for-sale financial assets

							RMB million
Key financial indicators	For the nine months ended 30 September 2016		For the nine months ended 30 September 2015		Increase/ (decrease)		Main reasons
Operating profit		17,580		44,493		-60.5%	Decrease of investment income and the impact of the change of discount rate assumption of reserves of traditional insurance contracts
Net profit attributable to equity holders of the Company		13,528		33,837		-60.0%	Decrease of investment income and the impact of the change of discount rate assumption of reserves of traditional insurance contracts

(2) Material changes in major accounting items and their reasons

RMB million


Key financial indicators	As at 30 September 2016		As at 31 December 2015		Increase/ (decrease)		Main reasons
Financial assets at fair value through profit or loss		260,860		137,982		89.1%	Increase of allocation of bonds for sale
Long-term equity investment		91,064		47,175		93.0%	Increase of associates and joint ventures and the equity in associates
Securities sold under agreements to repurchase		63,109		31,354		101.3%	The needs for liquidity management
Policyholder deposits		189,573		84,092		125.4%	Increase in the sale of certain investment contracts
Reserves for long-term health insurance		59,964		46,010		30.3%	The accumulation of insurance liabilities from new insurance business and renewal business

							RMB million
Key financial indicators	For the nine months ended 30 September 2016		For the nine months ended 30 September 2015		Increase/ (decrease)		Main reasons
Investment income		84,945		121,810		-30.3%	Decrease in spread income of equity investment
Claims expenses		160,970		103,296		55.8%	Increase in maturities payable and annuity
Policyholder dividends resulting from participation in profits		10,257		27,141		-62.2%	A decrease in investment income from participating products
Underwriting and policy acquisition costs		41,278		27,381		50.8%	An increase in underwriting costs for first- year regular premium business resulting from the growth of the Company’s business and the optimization of its business structures

3.2

Explanation and analysis of significant events and their impacts and solutions

✓ Applicable ☐ Not applicable

On 29 February 2016, the Company entered into a share purchase agreement with Citigroup Inc. (“Citigroup”) and an equity transfer agreement with IBM Credit LLC (“IBM Credit”) and Citigroup. Pursuant to such agreements, the Company purchased from Citigroup and IBM Credit an aggregate of 3,648,276,645 shares of China Guangfa Bank Co., Ltd. (“CGB”) at a price of RMB6.39 per share for a total consideration of RMB23,312,487,761.55. The transaction was completed on 29 August 2016, on completion of the transaction, the Company holds 43.686% of the issued share capital of CGB and becomes the single largest shareholder.

3.3

Implementation of undertakings by the Company or shareholders holding more than 5% of the share capital of the Company

✓ 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.

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 languages. 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:		Miao Jianmin, Wang Sidong, Liu Jiade
Independent Non-executive Directors:		Chang Tso Tung Stephen, Robinson Drake Pike,
		Tang Xin, Leung Oi-Sie Elsie

Hong Kong, 27 October 2016

4.	Appendix

4.1

Balance sheet as at 30 September 2016 (unaudited)

RMB million (Unless otherwise stated)


ASSETS	As at 30 September 2016 Group		As at 31 December 2015 Group		As at 30 September 2016 Company		As at 31 December 2015 Company

Assets
Cash fund		70,795		76,265		69,205		74,744
Financial assets at fair value through profit or loss		260,860		137,982		259,100		135,725
Securities purchased under agreements to resell		17,565		21,503		17,103		21,461
Interest receivables		58,434		49,259		58,219		49,092
Premiums receivables		25,191		11,913		25,191		11,913
Receivables from reinsurers		149		37		149		37
Unearned premium reserves receivable from reinsurers		129		87		129		87
Claim reserves receivable from reinsurers		60		50		60		50
Reserves for life insurance receivables from reinsurers		149		82		149		82
Reserves for long-term health insurance receivables from reinsurers		1,527		1,164		1,527		1,164
Other receivables		13,011		14,488		6,079		7,615
Loans		217,536		207,267		213,461		203,152
Term deposits		536,900		562,622		534,994		560,807
Available-for-sale financial assets		804,832		770,516		800,774		766,799
Held-to-maturity investments		538,498		504,075		537,823		503,489
Long-term equity investments		91,064		47,175		88,508		56,554
Statutory deposits		6,333		6,333		5,653		5,653
Investment properties		1,202		1,237		1,259		1,296
Constructions in progress		9,000		7,565		8,905		7,544
Fixed assets		18,314		19,043		17,814		18,521
Intangible assets		6,066		6,193		5,784		5,900
Other assets		3,529		3,445		3,491		3,428
Separate account assets		12		14		12		14


Total Assets		2,681,156		2,448,315		2,655,389		2,435,127

Yang Mingsheng

Zhao Lijun

Li Mingguang

Zheng Zhiwu

Chairman

Vice President in

charge of Accounting Affairs

Chief Actuary

Head of

Accounting Department

4.1

Balance sheet as at 30 September 2016 (unaudited) (continued)

RMB million (Unless otherwise stated)


LIABILITIES AND EQUITY	As at 30 September 2016 Group		As at 31 December 2015 Group		As at 30 September 2016 Company		As at 31 December 2015 Company

Liabilities
Financial liabilities at fair value through profit or loss		776		856		–		–
Securities sold under agreements to repurchase		63,109		31,354		62,788		30,368
Premiums received in advance		2,345		32,266		2,345		32,266
Brokerage and commission payable		3,503		2,598		3,503		2,598
Reinsurance payable		727		196		727		196
Salary and welfare payable		3,902		6,065		3,297		5,406
Taxes payable		878		5,858		785		5,740
Claims payable		37,291		30,092		37,291		30,092
Policyholder dividends payable		95,891		107,774		95,891		107,774
Other payable		5,597		5,265		5,716		5,173
Policyholder deposits		189,573		84,092		189,573		84,092
Unearned premium reserves		14,913		7,944		14,913		7,944
Claim reserves		11,972		9,268		11,972		9,268
Reserves for life insurance		1,766,892		1,652,763		1,766,892		1,652,763
Reserves for long-term health insurance		59,964		46,010		59,964		46,010
Long-term borrowings		14,989		2,643		–		–
Bonds payable		67,998		67,994		67,998		67,994
Deferred tax liabilities		12,247		16,953		12,267		16,979
Other liabilities		15,624		12,096		12,499		9,542
Separate account liabilities		12		14		12		14


Total liabilities		2,368,203		2,122,101		2,348,433		2,114,219


Equity
Share capital		28,265		28,265		28,265		28,265
Other equity instruments		7,791		7,791		7,791		7,791
Capital reserve		54,980		54,974		54,323		54,317
Accumulated other comprehensive income		15,148		30,142		15,523		30,284
Surplus reserve		56,464		53,026		56,416		52,978
General reserve		25,311		25,239		25,027		25,027
Retained earnings		121,013		123,055		119,611		122,246


Attributable to equity holders of the Company		308,972		322,492		306,956		320,908


Non-controlling interests		3,981		3,722


Total equity		312,953		326,214		306,956		320,908


Total liabilities and equity		2,681,156		2,448,315		2,655,389		2,435,127

Yang Mingsheng

Zhao Lijun

Li Mingguang

Zheng Zhiwu

Chairman

Vice President in

charge of Accounting Affairs

Chief Actuary

Head of

Accounting Department

4.2

Income statement for the third quarter of 2016 (unaudited)

RMB million (Unless otherwise stated)


		For the nine months ended 30 September						For the nine months ended 30 September
		2016 Group			2015 Group			2016 Company			2015 Company

1.	Operating income		456,448			424,007			454,802			423,034
	Premiums earned		368,078			305,032			368,078			305,032
	Premium income		376,304			310,460			376,304			310,460
	Including: Reinsurance premium income		2			1			2			1
	Less: Premiums ceded to reinsurers		(1,299	)		(687	)		(1,299	)		(687	)
	Change in unearned premium reserves		(6,927	)		(4,741	)		(6,927	)		(4,741	)
	Investment income		84,945			121,810			84,649			121,719
	Including: Share of profit of associates and joint ventures		2,686			2,283			2,599			2,189
	Fair value gains/(losses)		(1,491	)		(6,511	)		(1,478	)		(6,513	)
	Foreign exchange gains/(losses)		598			470			283			440
	Other operating income		4,318			3,206			3,270			2,356

2.	Operating expenses		(438,868	)		(379,514	)		(438,523	)		(379,253	)
	Surrenders		(63,384	)		(87,407	)		(63,384	)		(87,407	)
	Claims expense		(160,970	)		(103,296	)		(160,970	)		(103,296	)
	Less: claims recoverable from reinsurers		650			264			650			264
	Increase in insurance contracts reserve		(130,760	)		(104,764	)		(130,760	)		(104,764	)
	Less: Insurance reserves recoverable from reinsurers		440			261			440			261
	Policyholder dividends resulting from participation in profits		(10,257	)		(27,141	)		(10,257	)		(27,141	)
	Business tax and surcharges		(866	)		(4,227	)		(815	)		(4,131	)
	Underwriting and policy acquisition costs		(41,278	)		(27,381	)		(41,278	)		(27,381	)
	Administrative expenses		(20,245	)		(18,161	)		(19,322	)		(17,338	)
	Less: Expenses recoverable from reinsurers		89			104			89			104
	Other operating expenses		(10,153	)		(7,445	)		(10,782	)		(8,103	)
	Impairment losses		(2,134	)		(321	)		(2,134	)		(321	)


3.	Operating profit		17,580			44,493			16,279			43,781


	Add: Non-operating income		61			77			55			72
	Less: Non-operating expenses		(209	)		(173	)		(209	)		(173	)


4.	Net profit before income tax		17,432			44,397			16,125			43,680


	Less: Income tax expenses		(3,511	)		(10,199	)		(3,262	)		(9,986	)


5.	Net profit		13,921			34,198			12,863			33,694

Yang Mingsheng

Zhao Lijun

Li Mingguang

Zheng Zhiwu

Chairman

Vice President in

charge of Accounting Affairs

Chief Actuary

Head of

Accounting Department

4.2

Income statement for the third quarter of 2016 (unaudited) (continued)


					RMB million (Unless otherwise stated)
		For the nine months ended 30 September						For the nine months ended 30 September
		2016 Group			2015 Group			2016 Company			2015 Company
6.	Attributable to:
	– equity holders of the Company		13,528			33,837
	– non-controlling interests		393			361

7.	Earnings per share
	Basic earnings per share		RMB0.47			RMB1.20
	Diluted earnings per share		RMB0.47			RMB1.20

8.	Other Comprehensive income		(14,976	)		(15,624	)		(14,761	)		(15,709	)
	Other comprehensive income attributable to equity holders of the Company (net of tax)		(14,994	)		(15,641	)		(14,761	)		(15,709	)
	Other comprehensive income that may be reclassified to profit or loss in subsequent periods (net of tax)		(14,994	)		(15,641	)		(14,761	)		(15,709	)
	Fair value gains/(losses) on available-for- sale financial assets		(17,337	)		6,743			(17,333	)		6,677
	Less: Amount transferred to net profit from other comprehensive income		(2,719	)		(26,384	)		(2,734	)		(26,338	)
	Portion of fair value changes on available-for-sale financial assets attributable to participating policyholders		5,557			3,973			5,557			3,973
	Share of other comprehensive income of associates and joint ventures under the equity method		(465	)		27			(251	)		(21	)
	Exchanges differences on translating foreign operations		(30	)		–
	Other comprehensive income that will not be reclassified to profit or loss in subsequent periods (net of tax)		–			–			–			–
	Other comprehensive income attributable to non-controlling interests (net of tax)		18			17


9.	Total Comprehensive income		(1,055	)		18,574			(1,898	)		17,985



	Attributable to equity holders of the Company		(1,466	)		18,196
	Attributable to non-controlling interests		411			378


Yang Mingsheng	Zhao Lijun	Li Mingguang	Zheng Zhiwu
Chairman	Vice President in	Chief Actuary	Head of
	charge of Accounting Affairs		Accounting Department

4.2

Income statement for the third quarter of 2016 (unaudited) (continued)


					RMB million (Unless otherwise stated)
		For the three months ended 30 September						For the three months ended 30 September
		2016 Group			2015 Group			2016 Company			2015 Company

1.	Operating income		115,784			90,596			115,200			90,320
	Premiums earned		83,836			75,672			83,836			75,672
	Premium income		83,843			76,162			83,843			76,162
	Including: Reinsurance premium income		1			–			1			–
	Less: Premiums ceded to reinsurers		(569	)		(289	)		(569	)		(289	)
	Change in unearned premium reserves		562			(201	)		562			(201	)
	Investment income		29,241			18,226			29,107			18,821
	Including: Share of profit of associates and joint ventures		1,080			138			1,028			106
	Fair value gains/(losses)		839			(4,966	)		846			(5,442	)
	Foreign exchange gains/(losses)		194			515			111			458
	Other operating income		1,674			1,149			1,300			811

2.	Operating expenses		(111,537	)		(87,402	)		(111,517	)		(87,328	)
	Surrenders		(8,296	)		(15,626	)		(8,296	)		(15,626	)
	Claims expense		(47,316	)		(30,042	)		(47,316	)		(30,042	)
	Less: claims recoverable from reinsurers		245			61			245			61
	Increase in insurance contracts reserve		(29,263	)		(27,415	)		(29,263	)		(27,415	)
	Less: Insurance reserves recoverable from reinsurers		246			160			246			160
	Policyholder dividends resulting from participation in profits		(4,589	)		2,429			(4,589	)		2,429
	Business tax and surcharges		(94	)		(471	)		(90	)		(433	)
	Underwriting and policy acquisition costs		(11,222	)		(7,872	)		(11,222	)		(7,872	)
	Administrative expenses		(6,688	)		(5,902	)		(6,371	)		(5,626	)
	Less: Expenses recoverable from reinsurers		31			18			31			18
	Other operating expenses		(3,428	)		(2,459	)		(3,729	)		(2,699	)
	Impairment losses		(1,163	)		(283	)		(1,163	)		(283	)


3.	Operating profit		4,247			3,194			3,683			2,992


	Add: Non-operating income		9			33			10			31
	Less: Non-operating expenses		(52	)		(68	)		(52	)		(68	)


4.	Net profit before income tax		4,204			3,159			3,641			2,955


	Less: Income tax expenses		(930	)		(695	)		(844	)		(634	)


5.	Net profit		3,274			2,464			2,797			2,321


Yang Mingsheng	Zhao Lijun	Li Mingguang	Zheng Zhiwu
Chairman	Vice President in charge of Accounting Affairs	Chief Actuary	Head of Accounting Department

4.2

Income statement for the third quarter of 2016 (unaudited) (continued)


					RMB million (Unless otherwise stated)
		For the three months ended 30 September						For the three months ended 30 September
		2016 Group			2015 Group			2016 Company			2015 Company
6.	Attributable to:
	– equity holders of the Company		3,133			2,348
	– non-controlling interests		141			116

7.	Earnings per share
	Basic earnings per share		RMB0.11			RMB0.09
	Diluted earnings per share		RMB0.11			RMB0.09

8.	Other Comprehensive income		2,921			(22,312	)		2,879			(22,323	)
	Other comprehensive income attributable to equity holder of the Company (net of tax)		2,889			(22,320	)		2,879			(22,323	)
	Other comprehensive income that may be reclassified to profit or loss in subsequent periods (net of tax)		2,889			(22,320	)		2,879			(22,323	)
	Fair value gains/(losses) on available-for- sale financial assets		5,297			(34,046	)		5,263			(34,034	)
	Less: Amount transferred to net profit from other comprehensive income		(821	)		2,339			(828	)		2,322
	Portion of fair value changes on available-for-sale financial assets attributable to participating policyholders		(1,675	)		9,611			(1,675	)		9,611
	Share of other comprehensive income of associates and joint ventures under the equity method		120			(224	)		119			(222	)
	Exchanges differences on translating foreign operations		(32	)		–
	Other comprehensive income that will not be reclassified to profit or loss in subsequent periods (net of tax)		–			–			–			–
	Other comprehensive income attributable to non-controlling interests (net of tax)		32			8


9.	Total Comprehensive income		6,195			(19,848	)		5,676			(20,002	)


	Attributable to equity holders of the Company		6,022			(19,972	)
	Attributable to non-controlling interests		173			124


Yang Mingsheng	Zhao Lijun	Li Mingguang	Zheng Zhiwu
Chairman	Vice President in charge of Accounting Affairs	Chief Actuary	Head of Accounting Department

4.3

Cash flow statement for the third quarter of 2016 (unaudited)


					RMB million (Unless otherwise stated)
		For the nine months ended 30 September						For the nine months ended 30 September
		2016 Group			2015 Group			2016 Company			2015 Company
1.	Cash flows from operating activities
	Premiums received		333,487			285,810			333,487			285,810
	Net increase in policyholder deposits		105,969			10,682			105,969			10,682
	Net cash received from financial liabilities at fair value through profit or loss		–			160			–			–
	Cash received from other operating activities		4,368			3,337			3,148			2,359


	Sub-total of cash inflows from operating activities		443,824			299,989			442,604			298,851


	Cash paid for claims		(217,156	)		(187,195	)		(217,156	)		(187,195	)
	Net cash paid for reinsurance business		(141	)		(46	)		(141	)		(46	)
	Cash paid for brokerage and commission fees		(40,373	)		(26,550	)		(40,373	)		(26,550	)
	Cash paid for policyholder dividends		(14,703	)		(10,428	)		(14,703	)		(10,428	)
	Cash paid to and for employees		(12,231	)		(11,309	)		(11,650	)		(10,823	)
	Net cash paid for financial assets at fair value through profit or loss		(125,455	)		(2,989	)		(125,566	)		(2,731	)
	Net cash paid for financial liabilities at fair value through profit or loss		(67	)		–			–			–
	Cash paid for taxes and surcharges		(10,721	)		(13,229	)		(10,255	)		(12,863	)
	Cash paid for other operating activities		(11,249	)		(10,732	)		(12,257	)		(11,807	)


	Sub-total of cash outflows from operating activities		(432,096	)		(262,478	)		(432,101	)		(262,443	)


	Net cash flows from operating activities		11,728			37,511			10,503			36,408


Yang Mingsheng	Zhao Lijun	Li Mingguang	Zheng Zhiwu
Chairman	Vice President in charge of Accounting Affairs	Chief Actuary	Head of Accounting Department

4.3

Cash flow statement for the third quarter of 2016 (unaudited) (continued)


					RMB million (Unless otherwise stated)
		For the nine months ended 30 September						For the nine months ended 30 September
		2016 Group			2015 Group			2016 Company			2015 Company
2.	Cash flows from investing activities
	Cash received from sales and redemption of investments		442,771			584,551			439,468			580,856
	Cash received from investment income		72,568			68,615			70,742			68,414
	Net cash received from disposals of fixed assets, intangible assets and other long-term assets		168			76			168			76
	Net cash received from securities purchased under agreements to resell		3,938			–			4,358			–
	Net cash received from the disposal of subsidiaries and other business units		–			3,859			–			5,550


	Sub-total of cash inflows from investing activities		519,445			657,101			514,736			654,896


	Cash paid for investments		(560,413	)		(601,886	)		(542,326	)		(596,907	)
	Net increase in policy loans		(4,571	)		(8,767	)		(4,571	)		(8,767	)
	Cash paid for acquisition of fixed assets, intangible assets and other long-term assets		(2,460	)		(1,876	)		(2,300	)		(1,834	)
	Net cash paid for securities purchased under agreements to resell		–			(7,885	)		–			(7,959	)


	Sub-total of cash outflows from investing activities		(567,444	)		(620,414	)		(549,197	)		(615,467	)


	Net cash flows from investing activities		(47,999	)		36,687			(34,461	)		39,429


Yang Mingsheng	Zhao Lijun	Li Mingguang	Zheng Zhiwu
Chairman	Vice President in charge of Accounting Affairs	Chief Actuary	Head of Accounting Department

4.3

Cash flow statement for the third quarter of 2016 (unaudited) (continued)

RMB million (Unless otherwise stated)

For the nine months ended
30 September

2016

Group

2015

Group

2016
Company

2015
Company

Cash flows from financing activities

Cash received from investment

554

–

Including: Cash received from the investment of non-controlling interests by subsidiaries

554

–

Cash received from issuing other equity instruments

–

7,791

–

7,791

Cash received from borrowings

12,610

–

Net cash received from securities sold under agreements to repurchase

31,755

–

32,420

–

Sub-total of cash inflows from financing activities

44,919

7,873

32,420

7,791

Net cash paid for securities sold under agreements to repurchase

–

(45,794

)

–

(44,358

)

Cash paid for dividends and interests

(14,432

)

(13,405

)

(14,235

)

(13,236

)

Sub-total of cash outflows from financing activities

(14,432

)

(59,199

)

(14,235

)

(57,594

)

Net cash flows from financing activities

30,487

(51,326

)

18,185

(49,803

)

Effect of changes in foreign exchange rate on cash and cash equivalents

239

397

234

392

Net increase/(decrease) in cash and cash equivalents

(5,545

)

23,269

(5,539

)

26,426

Add: Opening balance of cash and cash equivalents

76,096

47,034

74,750

42,984

Closing balance of cash and cash equivalents

70,551

70,303

69,211

69,410


Yang Mingsheng	Zhao Lijun	Li Mingguang	Zheng Zhiwu
Chairman	Vice President in charge of Accounting Affairs	Chief Actuary	Head of Accounting Department