(Updates to close)
* HSI down 0.9 pct, Shanghai Comp slips 0.7 pct
* China Life Insurance slumps after profit warning
* Investors taking profits ahead of earnings: strategist
* Want Want at all-time high after earnings report
By Clement Tan
HONG KONG, March 7 (Reuters) - Hong Kong and China shares slumped to a third-straight loss on Wednesday, dragged by weakness in China Life Insurance as investors locked in profits ahead of corporate earnings later this month unlikely to produce pleasant surprises.
The China Enterprises Index of the top mainland listings in Hong Kong slipped 1.3 percent. The Hang Seng Index slid 0.9 percent to 29,627.8, but finished off lows on turnover that, excluding Tuesday, was the highest since Feb. 15.
The Shanghai Composite Index dropped 0.7 percent to close at a two-week low in lackluster A-share turnover.
China Life Insurance fell 6.1 percent in Hong Kong and 1.1 percent in Shanghai after the world's largest insurer by market value warned late on Tuesday that its 2011 net profit would decline by up to 50 percent from the previous year.
But in a sign investors are willing to invest in companies with stronger fundamentals, Want Want China extended gains after posting 2011 profits that beat expectations, closing at its highest since its March 2008 debut on the Hong Kong exchange.
"Want Want is an example of what could happen when earnings better expectations, but the earnings outlook is looking relatively weak across the board and investors are refocusing on locking in some profits after the rally this year," said Francis Cheung, Hong Kong-China strategist at brokerage CLSA.
Cheung added that February data for Chinese inflation, due on Friday, and money supply and loan growth figures expected from Saturday, would give investors more clues about the extent of the slowdown in the world's second-largest economy.
In a note to clients, Barclays Capital analysts said they had expected a 30 percent profit decline for China Life, rather than 50 percent. They said China Life will report some of the weakest earnings among Chinese insurers.
In its profit warning, China Life blamed lower investment yields and an increase in impairment losses caused by capital market fluctuations, particularly given its high levels of investment in mainland Chinese markets, which slumped 22 percent in 2011.
Of 32 analysts, 10 have reduced their earnings estimates for China Life by an average of 12.2 percent since Feb. 6, according to Thomson Reuters StarMine. The firm is expected to post full 2011 earnings on March 21.
Wednesday's fall, which came in more than triple China Life's 30-day average volume, brought its losses in Hong Kong this week to 13.3 percent. That has washed out about two-thirds of its 2012 gains. China Life is now up 8.6 percent in the year, compared with 11.9 percent on the Hang Seng Index.
Its peers in the Chinese insurers sector have been equally hard hit this week. Ping An Insurance lost 4 percent on Wednesday and is down 10.3 percent this week, just about halving its 2012 gains.
INVESTORS HUNT FOR VALUE, FUNDAMENTALS
Bucking broad weakness on the day, Want Want China was a standout outperformer. The Chinese snack maker jumped 7 percent in almost triple its 30-day average volume, bringing its gain this week to 9.4 percent. It is now up 7.2 percent in 2012.
Chinese automakers were also strong on Wednesday after steep losses on Tuesday. Geely Auto rose 4 percent while Greatwall Motor and Warren Buffett-backed BYD each gained more than 3 percent.
Hong Kong utilities giant, Power Assets Holdings Co Ltd , edged up 0.4 percent ahead of its final 2011 earnings results after market close, which came in better than expected.
It is currently flat on the year. The stock was prized for its steady earnings growth amid the selloff last year. It gained 17.2 percent last year as the Hang Seng Index slumped 20 percent. (Additional reporting by Vikram Subhedar; Editing by XXX)