Jun 13, 2019 (China Knowledge) - Chinese bad debt manager China Cinda Asset Management Co. Ltd. is planning to sell its stake in money losing Happy Life Insurance Co. Ltd. after the latter posted heavy losses last year.
Happy Life recorded a loss of RMB 6.8 billion last year due to losses on equity investments while its premium income also fell by more than half to RMB 9.2 billion last year from RMB 18.5 billion in 2017.
The insurer which was founded in 2007 turned profitable in 2015 with a profit of RMB 335 million. However, the company’s fortunes quickly turned the following year with net profits plummeting to just RMB 18 million in 2016 before rebounding slightly to RMB 49 million in 2017.
Happy Life’s poor performances have also negatively affected Cinda’s profitability with the latter issuing a profit warning earlier this year, highlighting that its profits for this year would decline due to Happy Life’s significant losses. Cinda had a net profit of RMB 12 billion this year, down 33% from RMB 18 billion in 2017.
Cinda is now looking to transfer all of its 51% equity interest in Happy Life through a public bidding in order to implement relevant regulatory spirit and to optimize and integrate platform resources of its subsidiaries.
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