(Yicai Global) April 23 -- Ping An Insurance Group of China, the country's largest insurer by market cap, increased its profits by a shrunken 5 percent in the first quarter due to its investment in a troubled property developer after a big slump a year earlier amid the Covid-19 pandemic.

Net profit was CNY27.2 billion (USD4.2 billion) in the three months ended March, up nearly 5 percent from a year ago, the Shenzhen-based company said in its earnings report published yesterday. In the first quarter of 2020, it had reported a 42 percent decline in net profit.

The results were not surprising. The insurer's core performance indicators are basically in line with the expectations, Citic Securities said in a research note today. Ping An Insurance's stock remains a preferred choice in the mainland sector, it added.

A stake in a struggling property developer made a dent in profits. The insurance giant set aside CNY18.2 billion for asset impairment caused by China Fortune Land Development, which ate away CNY10 billion worth of net profit, it said. In February, the owner of Ping An Bank had said that it has a CNY54 billion exposure inChina Fortune Land,in which Ping An Insurance has a 25 percent stake.

China Fortune Land defaulted on CNY5.3 billion (USD815.8 million) worth of debts in February, blaming the missed deadlines on the macroeconomic and credit environment, as well as the Covid-19 pandemic. It has defaulted on CNY47.8 billion worth of debts so far, it said on April 21.

The conglomerate's investment portfolio of insurance funds tailed CNY3.78 trillion (USD581.8 billion) on March 31, up 1.1 percent from early January. The portfolio realized a 3.1 percent annualized total return on investment.

Ping An Insurance's Shanghai-listed shares [SHA:601318] were flat at CNY74.36 (USD11.50) by noon. Its market cap was CNY1.37 trillion (USD210.9 billion).

Editor: Emmi Laine, Xiao Yi