UPDATE 2-Ping An, returning to profit, cautious on Q4

* Q3 profit 3.37 bln yuan, vs 7.92 bln loss

* Sees risk in low bond yields, stock volatility

* Analyst positive on Q4 outlook (Adds details, data under international accounting standards)

By Michael Wei and Doug Young

BEIJING/HONG KONG, Oct 27 (Reuters) - China's Ping An Insurance (2318.HK) said that low interest rates in the bond market and stock volatility could weigh on profits in the final quarter, as it returned to a quarterly profit, boosted by investment returns.

"Returns from the bond market could maintain a relatively low level for the longer term, and increasing volatility in the stock market will make it difficult for the company to control its profit growth rate in the fourth quarter," Ping An said in a statement to the Shanghai Stock Exchange on Tuesday.

UOB Kay Hian analyst Sheng Nan said he was not overly concerned about such factors.

"Its fourth-quarter outlook remains positive on strong premium growth and rising bond yields," said Sheng, who holds a "buy" rating on the insurer.

"Premium is expected to continue to increase by 25 percent during the last quarter of the year. ... As for the stock market, there should not be big impact on its investment returns, barring a sharp plunge," he said.

Ping An (601318.SS) and its bigger rival China Life Insurance Co (2628.HK) have benefited from a 69 percent jump in China's stock market so far this year, as the world's third-biggest economy began to bounce back with the help of a massive raft of government stimulus spending.

After soaring in the first half, China's stock market .SSEC has seen a correction. It shed 6 percent in the third quarter as investors worried about a possible tightening in monetary policies after a surge in lending and government-led investment.

Ping An reported a net profit of 3.37 billion yuan ($493 million) for the three months through September, compared with a 7.92 billion yuan loss the previous year, according to its report to the Hong Kong Stock Exchange based on international standards.

Its quarterly net profit based on Chinese accounting standards was 2.58 billion yuan, missing the average 2.96 billion yuan forecast of four analysts polled by Reuters.

Ping An said its investment income for the period was 9 billion yuan, versus a loss of 12.4 billion yuan a year earlier, based on international standards.

China Life (601628.SS)(LFC.N) reported a day earlier that third-quarter earnings more than doubled as it benefited from a stock market recovery. [ID:nPEK296325]

Ping An's stock has nearly doubled so far this year, outperforming a 60 percent gain in the benchmark Hang Seng Index .HSI. The shares closed 0.97 percent down at HK$71.4 in Hong Kong on Tuesday, ahead of the results.