Cathay Financial Holding Co (國泰金控), the nation’s biggest financial service provider, yesterday reported an after-tax re-evaluation gain of NT$107.8 billion (US$3.34 billion) as of September from its 203 commercial rental properties at an original cost of NT$129.3 billion, company executives said yesterday.
The company’s property investments, with a total market value of NT$237.1 billion — up from NT$205 billion in 2007 — averaged a 5.1 percent return in the third quarter after rental incomes saw an annual 10 percent hike, company executive vice president Abel Lin (林昭廷) told an investors’ conference yesterday.
The company plans to boost its property investments by up to NT$106.35 billion “in the next three to five years,” totaling 10 percent, up from the current 5.5 percent, of its NT$2.36 trillion asset allocation, he said.
The gains are expected to contribute another NT$3.56 per share to the company’s embedded value, which reached NT$34.86 per share last year, Hsiung Ming-ho (熊明河), president of subsidiary Cathay Life Insurance Co (國泰人壽), the nation’s biggest life insurer, told reporters yesterday.
Embedded value refers to the present value of insurance firms.
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Hsiung said the life insurer would contribute NT$30 billion in earnings from its first-year premiums, which will translate into another contribution of NT$3.3 per share to the parent company’s embedded value. Cathay Life yesterday reported NT$173.6 billion in first-year premiums as of the third quarter, up from NT$171 billion one year earlier.
Parent Cathay Financial yesterday reported NT$7.8 billion in net income for the first three quarters of the year, up from NT$3.8 billion one year earlier.
That represents earnings of NT$0.81 per share, up from 0.39 one year earlier.
Another Cathay Life president, Fate Chang (張發得), yesterday said that its Shanghai-based life insurance joint venture with China Eastern Airlines Corp (中國東方航空), which has 32 outlets in Shanghai, averages a 4.4 percent return and would expand.
Pandora Lee (李懿璇), a financial analyst with UBS Securities in Taipei, yesterday said Cathay Financial had outperformed its peers, recovering faster and better than expected.
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