UPDATE 1-China Life sees 2006 net profit up over 50 pct

(Adds details, analyst comments)

SHANGHAI, Jan 30 (Reuters) - China Life Insurance Co. (601628.SS)(2628.HK)(LFC.N) said on Tuesday that it would post a minimum rise of 50 percent in its 2006 net profit on a 14 percent rise in insurance premium and strong investment returns.

In 2005, the country's biggest life insurer reported a net profit of 5.456 billion yuan ($702 million), it said in a statement, adding that the figures were compiled under domestic accounting standards.

China Life's Shanghai-listed A shares had lost 1.69 percent at midday on Tuesday as investors worried that its earnings growth might be less than analysts had forecast.

Analysts were predicting the actual increase of China Life's 2006 earnings would be much sharper than the company's projection, since the Shanghai stock exchange does not require specific earnings forecasts.

The bourse requires firms to disclose only rough earnings estimates if they are going to report earnings increases or declines of more than 50 percent.

"China Life's estimate means its 2006 earnings would jump at least 50 percent. It is not confining to 50 percent," said industry analyst Wang Xiaogang at Orient Securities.

Shanghai and Hong Kong-listed China Life will publish its 2006 results by the end of April.

Under Hong Kong accounting standards, the company reported a net profit of 9.306 billion yuan for 2005, much larger than its earnings reported under Chinese standards.

According to Reuters Research, 23 analysts expect China Life to generate an average net profit of 16.3 billion yuan under Hong Kong accounting standards, up 75 percent from a year earlier.

The discrepancy in China Life's 2006 profit figures is partly caused by differences in booking costs involved in selling policies, such as commissions and operational fees, under Chinese and Hong Kong accounting standards, analysts say.

Chinese rules require insurers to include the costs in the year when the sale actually occurs, while Hong Kong standards allow them to amortise the costs over a number of years depending on the policies' duration.

Its Hong Kong-listed H shares, trading at an about 75 percent discount to A shares, edged up 0.21 percent to HK$23.4 in late morning trade.

($1= 7.7745 Yuan)

((Reporting by Lu Jianxin, editing by Ken Wills; jianxin.lu@reuters.com; +86 21 6104 1792, fax +86 21 6104 1728)) Keywords: CHINALIFE EARNINGS

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