08.09.2001
Cathay Life 1H01 earnings down 53%

• Development: Cathay Life Insurance reported 1H01 net earnings of NT$6.9bn and EPS of NT$1.28, a 53% decrease YoY. The difference is primarily due to poor stock investment income. Firm also announced a buy back of 60m shares at a price range between NT$25-40.

• Analysis: Although Cathay Life adopted several measures to improve investment income, we believe substantial stock holdings of NT$78.1bn could potentially drag down 2001 earnings under current global market downturn.

• Primasia View: We believe profitability will only improve in longer-term under present low interest rate environment.