Asia Financial bounced back into the black last year following a large improvement in investment gains in the second half.

The company yesterday reported net profit of HK$403.8 million, against a loss of HK$137.5 million in 2011.

Bernard Charnwut Chan, the president of the firm, said it might inject more capital into its property project in Shanghai and PICC Life Insurance, a subsidiary of Hong Kong-listed People's Insurance Co (Group) of China. Asia Financial has a 5 per cent stake in PICC.

Chan said the company was also on the lookout for an opportunity to invest in hospitals but had no target at present.

Asia Financial will maintain a dividend payout ratio of about 30 per cent of core profit. Excluding income from associates, core profit last year was HK$320 million. A final dividend of 4.3 HK cents per share will be paid.

Investment gains for the year were HK$234.2 million, against a loss of HK$306.7 million previously.

Chan expects the stock market to remain volatile this year and the company would exercise caution in its investment.

Wholly owned Asia Insurance also returned to profitability last year with earnings of HK$274.2 million from a loss of HK$27.5 million in 2011.

Chan said the results were acceptable given the remaining exposure to claims resulting from floods in Thailand in 2011 and to Hurricane Sandy in the United States last year.

Wong Kok-ho, the chief executive of Asia Insurance, said the company had made a provision of HK$34 million for the floods.

Chan said the outlook for the company's insurance operations was positive.