Hong Kong company reporting season

China Life to focus investment in tech, AI, and Belt and Road

PUBLISHED : Friday, 25 August, 2017, 4:54pm
UPDATED : Friday, 25 August, 2017, 4:54pm

China Life will continue to invest in Hong Kong stocks and plans to team up with Baidu as part of an ambitious plan to invest US$1 billion in artificial intelligence and related technology companies, even as the insurer acknowledged Beijing’s new capital control rules would affect its investment scope, the insurer’s chairman said.

“The capital control rules by the forex regulator would affect our overseas investment plan. We would definitely invest in a manner according to the regulatory requirement,” China Life chairman Yang Mingsheng said in a post results briefing on Friday.

“However, we would continue to seek good overseas investment opportunities that fit with the forex regulator’s rule. This would include investment in Hong Kong stocks via the Stock Connect scheme as well as the many good infrastructure projects along the Belt and Road Initiative,” Yang said.

Beijing earlier this month issued guidelines to ban irrational overseas investment in property, films and entertainment groups. However it encouraged companies to continue investing in technology companies as well as the Belt and Road Initiative, which involves road, rail, power plants and other infrastructure projects to promote trade and economic ties with neighbouring countries.

China Life on Thursday said it had teamed up with internet search company Baidu to form a 7 billion yuan (US$1 billion) private equity fund. China Life will invest 5.6 billion yuan while Baidu will cover the remainder. The fund will invest in unlisted companies involved in artificial intelligence (AI) and internet finance.

“There are several advantages of this investment,” Yang said. “The application of AI and big data will be important to the future development of the insurance industry in China.”

Yang said investments made by its Hong Kong subsidiary would not be affected by the new rules on overseas investment curbs.

China Life was one of the 14 major companies which invested in the 78 billion yuan (HK$91.5 billion) share sale by China United Network Communications Group, or China Unicom, the country’s second-largest mobile carrier by subscriber numbers.

“China Unicom is a good investment which will provide good returns and allow us to team with technology companies to further enhance our services,” Yang said.

China Life profit up 17.8pc in first half after CIRC crackdown on small rivals pad bottom line

On Thursday China Life reported 17.8 per cent net profit growth in the first half from a year earlier.

China Life shares ended 4.2 per cent higher at HK$25 on Friday after reporting interim results Thursday evening.