Shares of People's Insurance Company (Group) of China (PICC Group) took a sharp 7.04% plunge on Monday, despite the company's announcement of expected strong profit growth for the first nine months of 2024.

In a filing with the Hong Kong Stock Exchange, PICC Group announced that it expects net profit attributable to shareholders to increase by 65% to 85% year-over-year in the first three quarters, reaching between 33.8 billion yuan and 37.9 billion yuan. The company attributed this significant profit growth to its optimized business structure, higher investment income, and the recovery of the capital market.

However, the positive profit outlook failed to buoy investor sentiment, as PICC Group's shares closed at HK$3.75, down 5.78% on the day. Analysts speculate that the market may have been expecting an even higher profit growth forecast, leading to disappointment. Additionally, concerns over the sustainability of the profit growth and other potential headwinds for the insurance sector could have weighed on the stock price.