(Bloomberg) -- Ping An Insurance (Group) Co. missed analyst estimates as China’s economic slowdown and property market crisis weighed on value of assets. The shares dropped.

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Net income reached 126.6 billion yuan ($17.5 billion), compared with 85.7 billion yuan a year earlier, the Shenzhen-based company said in a filing to the Hong Kong stock exchange Wednesday. That trailed the 134.5 billion yuan average estimate of 22 analysts surveyed by Bloomberg.

Operating profit, which the insurer says better reflects performance by stripping out short-term investment volatility and one-time items, rose 9%. That compared with a 20% slump in the previous year.

Ping An fell as much as 5.2% in Hong Kong, the most in about five months. The shares were down 4.8% at HK$49.4 as of 10:54 a.m., paring this year’s gain to 7.3%.

The asset management business recorded a 11 billion yuan loss, as a prolonged property downturn and slower growth weighed on the value of investments.

That said, its earnings stability is expected to improve significantly, according to Citic Securities Co. A 15% rally in the CSI 300 Index last year bolstered the value of Chinese insurers’ equity holdings, helping competitor China Life Insurance Co. to more than double its profit.

Investment income more than quadrupled to 161 billion yuan, according to the filing. Yet net impairment losses on financial assets climbed 10% to 85.6 billion yuan, while such losses on other assets jumped more than fivefold to 7.2 billion yuan.

Ping An took “very prudent” provisions and its asset quality has been improving “significantly,” Co-CEO Michael Guo told Bloomberg TV.

The industry’s profit outlook will get brighter this year on higher equity allocations, and as more long-term bond purchases match assets with their liabilities, according to Bloomberg Intelligence analyst Steven Lam. The CSI 300 has gained 1.4% this year.

Chinese insurance stocks are embarking on a slow bull run as their products become more attractive in a low interest rate environment and competition from smaller players weaken, Citic analysts wrote in a report this week.

New business value, which measures the profitability of new life policies sold, grew 28.8%, slowing from a 34% gain in the first nine months.

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Top life insurers like Ping An are switching their focus to profit-sharing policies this year, which are “the most competitive products” in the market with an estimated 3% actual return, Citic analysts led by Tong Chengdun wrote in the report.

Ping An has reduced pressure from real estate and fintech losses, improved its position in the bancassurance channel and increased allocations to top banks, which promise to stabilize its profits going forward, they wrote.

The company’s outstanding real estate investments stood at 203 billion yuan as of Dec. 31, or 3.5% of its insurance funds portfolio, according to the filing. That dropped from 4.3% a year earlier.

The asset management business, which also includes units from securities to trust, swung to a 19.5 billion loss in 2023, the first in at least five years, before the loss shrank 43% last year.

(Updates with share price drop in first paragraph, Co-CEO comment.)

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