(Source: Beijing Business Today)
Insurance giant takes a stake in the "flagship of the bull market". On 10 month 9, the China Insurance Association's official website disclosed that New China Life Insurance Co., Ltd. (hereinafter referred to as "New China Insurance") took a stake in Guotai Haitong H-shares via secondary market centralized bidding. This marks the first time insurance capital has taken a stake in a securities firm since 2026, and it is also New China Insurance's second move to take a stake in a securities firm following its stake in Haitong Securities H-shares in 2024 year 11 month. Following this equity change, New China Insurance and its concert parties hold approximately 7.1 hundred million shares of Guotai Haitong H-shares in total, with their shareholding ratio rising to 20.24%. Some analysts suggest that New China Insurance's stake in Guotai Haitong H-shares aligns with the regulatory guidance encouraging patient capital to enter the market and reflects the responsibility of insurance funds as a stabilizer of the market.
New China Life Insurance again takes a stake in brokerage stocks
According to the official website of the China Insurance Association, New China Life disclosed on 10 month 9 its purchase of H shares in Guotai Haitong. Prior to this equity change, New China Life and its concert parties held approximately 7 billion H shares of Guotai Haitong, representing about 19.96% of its total H share capital. On 9 month 29, New China Life increased its holdings of Guotai Haitong H shares by 995.96 million shares through centralized bidding transactions on the secondary market, accounting for approximately 0.28% of Guotai Haitong's issued H share capital.
Following this rights adjustment, New China Life Insurance and its concert parties will hold approximately 7.1 billion H shares of Guotai Haitong in aggregate, with the shareholding ratio rising to 20.24%. As of 9/29, the book balance of H shares held by New China Life Insurance reached 89.7 billion yuan, accounting for 0.48% of its total assets at the end of the previous quarter.
From the perspective of the accumulation pace, New China Life's increased stake in Guotai Haitong H-shares this year has been notably dense. Data from the HKEX shows that on 5/15, after the combined holding ratio of New China Life and its concert parties exceeded 16%, it broke through 17% on 7/15, followed by surpassing 18%, 19%, and 20% successively in 9.
Notably, this is not the first time Xinhua Insurance has made a significant stake in a listed securities firm in recent years. Before the merger of Guotai Junan and Haitong Securities, Xinhua Insurance had already acquired Haitong Securities H-shares in 2024 11, holding 5.02% of the shares. Following the completion of the merger, Xinhua Insurance's holdings were transferred to Guotai Haitong H-shares, and it has continued to increase its position since then.
Analysts suggest that New China Life's stake in Guotai Haitong H-shares may be driven by its allocation value. According to iFinD data from Tonghuashun, as of the close on 10/9, Guotai Haitong H-shares had a dividend yield of 5.24% and a TTM P/E ratio of 6.83x. In comparison, the CSI All Securities Index posted a TTM P/E of 11.93x during the same period.
Brokerage sector at historic valuation lows
Against this backdrop, major insurers have continued to increase their holdings in leading brokerages' H-shares. Does this signal long-term capital's recognition of the sector's allocation value? Beijing Business Today notes that at Sino-Allianz's 2026 interim results briefing, executives stated they would actively respond to the call for medium- and long-term funds to enter the market.
According to financial commentator Guo Shiliang, the current HKEX listing price of Guotai Haitong has fallen below its net asset value per share, entering a discount-to-book state. With attractive valuation and solid dividend yields, the stock's investment value is now compelling. For insurers, listed companies have become significantly more appealing investments, driving decisions to increase holdings or even take control stakes. By acquiring shares in leading financial firms at these low valuations, insurers can enhance their asset allocation quality by securing high-quality equity positions at bargain prices.
Tian Lihui, Dean of the Institute of Financial Development at Nankai University, also noted that the core driver behind this takeover bid is the perfect alignment between low-valuation, high-dividend assets and long-term liability structures. Against a macro backdrop of persistently declining risk-free rates, leading brokerages' H-shares have emerged as scarce targets for insurers seeking to optimize asset allocation and mitigate interest rate spread risks, thanks to their significant valuation discounts and stable dividend yields. This move also aligns closely with regulatory efforts to encourage patient capital entry into the market, reflecting the insurance sector's commitment to serving as a stabilizing force in the financial system.
At the same time, Tian Lihui believes this move sends multiple positive signals: it demonstrates long-term capital's firm confidence in the medium- to long-term value of the capital market; it suggests that equity ties among financial institutions are strengthening; and it helps accelerate consolidation in the securities sector and improve governance. This provides a vivid example for building a modern financial system with Chinese characteristics.
From a secondary market perspective, brokerage stocks have shown continued volatility recently. Public data shows that as of the close on 10 month 9, the entire broker sector closed higher, with Huaxin Shares hitting the limit up. However, looking at the year-to-date performance, the CSI All Share Securities Index remains in a downtrend. Guo Shiliang believes that although brokerage stocks have demonstrated strong earnings growth this year, their stock prices have diverged from fundamentals. This may be due to shifts in investment focus by large funds and a high proportion of retail investors in the sector, making it difficult for capital to push prices upward.
Tian Lihui also noted that the current strategic positioning in brokerage stocks aims to capture dual dividends from industrial supply-side structural reforms and valuation repair. Under the policy guidance of building top-tier investment banks, leading brokerages are achieving scale through M&A and restructuring. Rising industry concentration will reshape the competitive landscape, while the sector's overall valuation remains at historical lows, offering a high safety margin and upside potential. However, investors must remain aware of potential risks: brokerage profits are closely tied to market trading volumes and proprietary trading returns, resulting in inherent earnings volatility. If market activity falls short of expectations or regulatory policies tighten, the sector's rebound may lack sustainability. We recommend moving beyond short-term speculation and focusing on top-tier institutions with core competitiveness and compliance advantages, adopting a medium-to-long-term perspective to share in the structural gains from the industry's high-quality development.
Beijing Business Today reporter Li Haiyuan
