(Yicai Global) Aug. 27 -- Ping An Insurance Group reported a 15.5 percent decline in net profit in the first half from a year earlier. China’s biggest insurer by market cap also announced a plan to buy back CNY10 billion (USD1.5 billion) of shares to stabilize its stock price. Its shares rose.

Net profit was CNY58 billion (USD8.9 billion) in the six months ended June 30, versus CNY68.7 billion a year earlier, the Shenzhen-based company said in an earnings report released late yesterday.

The insurer’s weaker performance was mainly due to losses from its investment in China Fortune Land Development, as the impairment provisions and adjusted valuation of China Fortune were CNY35.9 billion, eating away CNY20.8 billion of net profit, Ping An said.

The firm’s Shanghai-listed stock [SHA:601318] ended 3.4 percent higher today at CNY52 (USD8.02), while in Hong Kong, Ping An [HKG:2318] was trading up 3.3 percent at HKD64.05 (USD8.22) as of 3.42 p.m. local time.

Ping An invested a large sum in real estate developer China Fortune in 2018, and now it is its second-largest shareholder with around a 25 percent stake. China Fortune has been in debt since 2020, and its stock has lost over 70 percent of its value so far this year.

Ping An also said that it will repurchase between CNY5 billion and CNY10 billion (USD771 million and USD1.5 billion) worth of its Chinese mainland-listed shares within 12 months of the board’s approval, and implement an employee stock ownership plan.

Buybacks remove some of a public company’s outstanding shares from the market, with the aim of shoring up its stock price. 

Editor: Futura Costaglione