(Yicai Global) Aug. 31 -- Ping An Insurance Group said it would not comment on unfounded rumors, following a media report that regulators in China are investigating the firm’s real estate investments.

Ping An Insurance has strictly complied with all rules and regulations, the Shenzhen-based company also said in a filing today.

Reuters reported yesterday that the China Banking and Insurance Regulatory Commission is investigating Ping An’s property investments and has ordered it to stop selling alternative investment products.

There have been recent fluctuations in the company’s shares, Ping An said, adding that it has a clear strategy and “sound business operations, which are all in line with the requirements stated by the law, rules and regulations. Also, the company has maintained steady operating profit growth in the first half of 2021.”

Its shares [SHA:601318] closed down 1.6 percent in Shanghai today at CNY49.90 (USD7.70), after dropping below CNY49 in the morning to a near nine-month low. Its Hong Kong-listed stock [HKG:2318] closed 3.8 percent lower at HKD60.40 (USD7.80).

Shares of Chinese insurers have been declining this year, and Ping An's Shanghai equity has fallen by more than 40 percent. One of the key reasons is that Ping An’s investment in indebted property developer China Fortune Land Development was a heavy drag on its first-half results.

Ping An’s net profit fell 15.5 percent to CNY58 billion (USD8.9 billion) in the six months ended June 30, from CNY68.7 billion a year ago, it said in an earnings report published on Aug. 26. That was partly due to impairment provision for investments in indebted real estate developer China Fortune Land Development. Revenue rose 10.1 percent to CNY81.8 billion.

Besides China Fortune Land, Ping An has also invested in other developers including China Jinmao Holdings Group, Country Garden and CIFI Holdings Group. In June, Ping An bought stakes in six Raffles City developments in China worth CNY46.7 billion in total. 

Editor: Tom Litting