China Life Insurance, the country's largest life insurer, said yesterday last year's net profit would fall more than 50 per cent as investment returns were hit by a 65.39 per cent slide in the stock market. Three other mainland companies - Hunan Nonferrous Metals Corp, Angang Steel and Datang International Power Generation - also issued profit warnings amid the global economic slowdown. China Life said the domestic capital market saw substantial declines last year due to the financial crisis. 'This caused the company to have a significant decrease in investment returns from its equity assets as compared to 2007,' it said. Increasing competition in the insurance market also affected the operating results to a certain extent, China Life said. In 2007, the company made a profit of 28.11 billion yuan (HK$31.89 billion). All figures were based on mainland accounting standards. The profit warning appears to be in line with analysts' estimates, given the insurer had already reported a 46.9 per cent earnings decline in the first three quarters of last year. 'The numbers look big, but we have to remember that 2007 was a record year for Chinese insurers,' said Sally Yim, an analyst at Moody's Investors Service. 'Now they are just returning to the levels in 2006, which is more sustainable.' Ben Lin, an analyst with Nomura Securities, said the difference in accounting treatments in Hong Kong and the mainland might also result in China Life reporting a smaller profit decline. The insurer has been adopting a more conservative strategy than rival Ping An Insurance (Group), which booked a loss of 15.7 billion yuan on its investment in Fortis, bailed out by BNP Paribas and three governments. Ping An, the country's second-largest insurer, was expected to report 804 million yuan in earnings last year following the write-downs, according to Citigroup estimates. That represents a 95.69 per cent plunge in earnings from 2007. Standard & Poor's and Fitch Ratings yesterday assigned an A-plus financial rating with a stable outlook to China Life to reflect the insurer's solid capitalisation despite the profit warnings. Moody's also assigned an A1 rating to the insurer. Angang, the listed arm of the mainland's second-biggest steelmaker, said its profit last year fell about 55 per cent to 3.42 billion yuan from 7.53 billion yuan in 2007 on the rising cost of raw materials and an 1.81 billion yuan provision against inventory after steel prices slumped. The mainland steel industry reported wide losses in the fourth quarter after steel prices fell more than 40 per cent from their peaks in June last year. Steel prices have stabilised and rebounded more than 15 per cent recently after massive destocking. Hunan Nonferrous, the mainland's biggest zinc producer, warned that it would post a loss for last year because of low metal prices and foreign exchange rate fluctuations. The integrated metals producer, which had a net profit of 315 million yuan in 2007, blamed the loss on 'low trading prices of nonferrous metals, and the record net foreign exchange losses on Australian dollars, foreign assets denominated in Australian dollars and Hong Kong dollars'. Prices of zinc slumped 42 per cent while lead fell about 19 per cent last year. The company's investment in Australia includes minority stakes in mining companies Compass Resources and Abra Mining. Helen Wang, an analyst at DBS Vickers, said the profit warnings might renew selling pressure in other metals producers.