Source: Observer
Insurance giant New China Life Insurance made consecutive moves in late 9, taking stakes in two H-share listed companies. Its holding in Guotai Haitong Securities, a leading domestic broker, has exceeded the reporting threshold and now accounts for more than 4% of its total shares, making it the second-largest single shareholder. This has drawn significant market attention to the long-term investment strategy of insurance capital.
On 10 9, New China Life Insurance disclosed on the website of the Insurance Association that on 9 29, it increased its holding of Guotai Haitong H shares by 995.96 million shares via the Stock Connect, representing approximately 0.28% of Guotai Haitong's issued H share capital. Following this increase, New China Life and its concert parties—New China Asset Management and New China Asset (Hong Kong)—hold a combined total of 7.096 billion Guotai Haitong H shares, accounting for 20.24% of Guotai Haitong's H share capital. As of 9 29, the book balance of these holdings was 89.7 billion yuan, which represents only 0.48% of New China Life's total assets at the end of the previous quarter. While the impact on New China Life's overall assets is limited, the increased shareholding size is significant. Reviewing disclosures from the Hong Kong Stock Exchange reveals that since 2026 5, New China Life has continuously increased its holdings in Guotai Haitong H shares: on 5 15, the holding exceeded 16% of H shares; on 7 15, it surpassed 17% on 9 3; it reached 18% on 9 16, culminating in the final purchase on 9 29, officially breaking through the 20% threshold. With holdings rising from 5.6 billion to nearly 7.1 billion shares, New China Life now holds more than 4% of Guotai Haitong's total share capital of 175.81 billion shares. Comparing this with the top ten shareholders disclosed in Guotai Haitong's 2026 semi-annual report, New China Life has become the second-largest single shareholder, trailing only Shanghai State-owned Assets Operation Co., Ltd.
Xinhua Insurance has a long-standing relationship with Guotai Haitong. As early as 2019, Xinhua Insurance became one of the major shareholders of the former Guotai Junan and secured a board seat. During the merger and restructuring of Guotai Junan and Haitong Securities into Guotai Haitong, Xinhua Insurance had already increased its holdings in both brokerages' H-shares and retained its board seat post-merger. Currently, Chen Yijiang, President of Xinhua Asset Management, serves as a director at Guotai Haitong. Notably, despite having appointed a director, Xinhua Insurance has not yet included Guotai Haitong in its long-term equity investments.
Insurance capital investment professionals told Securities China that New China Life Insurance continues to increase its holdings in Guotai Haitong H-shares, likely prioritizing their stable high dividends. According to Wind data, as of the close on 10/9, Guotai Haitong H-shares achieved a dividend yield of 5.24% over the past 12 months—a notably high level in the current market environment that aligns with insurance capital's requirements for long-term core assets.
Over the past two years, New China Life Insurance has actively responded to regulatory calls and implemented policies encouraging long-term capital market participation by continuously increasing its allocation to equity assets in the secondary market. High-dividend stocks have been a key focus of this strategy. As of 2026/6/30, the fair value change of OCI (Other Comprehensive Income) stock holdings reached 518 billion yuan, representing a 34% increase from year-end last year; these stocks are predominantly stable, long-term investment targets. However, OCI stocks currently account for only about 21% of New China Life's total stock holdings, significantly lower than peer listed insurers, indicating substantial room for further allocation. Chen Yijiang, President of New China Asset Management, explicitly stated at the company's earnings conference this June that the firm will continue to increase its allocation to high-dividend core assets, particularly during the market adjustment in the first half of this year when it actively added positions in dividend-focused and new quality productive forces equity assets.
Just one week before announcing its stake in Guotai Haitong H-shares, on 9 month 22, New China Life Insurance had already disclosed a position in AVIC Industry Holdings H-shares. Following the increase, New China Life holds a total of 3.21 billion AVIC Industry Holdings H-shares, representing approximately 5.17% of its H-share capital and reaching the 5% equity disclosure threshold for Hong Kong stocks. Unlike Guotai Haitong's high-dividend profile, AVIC Industry Holdings H-shares currently offer a dividend yield of only 2.52%. According to insurance investment analysts, New China Life's strategy appears focused on valuation recovery. As of the close on 10 month 9, AVIC Industry Holdings' total market cap stood at just 240 billion HKD, with a P/E ratio of 9.2 times and a P/B ratio of only 0.59 times—clearly undervalued levels. New China Life remains optimistic about further upside potential in the stock price.
As a top-tier insurer with assets totaling approximately 2 trillion yuan, New China Life's block purchases in the secondary market have long served as a barometer for institutional capital entering the market. In 2024, month 11, New China Life simultaneously acquired stakes in Shanghai Pharma and Sinopharm Co., Ltd., explicitly stating that these moves were to fulfill requirements for medium-to-long-term capital inflows and reflected confidence in China's economy and capital markets. In 2025, month 1, it acquired shares in Hangzhou Bank via an agreement-based transfer, and in the same year, month 4, it acquired H-shares of Beijing Enterprises. Both companies are now recorded as long-term equity investments by New China Life.
Industry insiders note that under accounting standards, once an insurer's shareholding reaches a certain threshold (typically 3% to 5%) and it appoints directors, the investment can be classified as having significant influence over the listed company. This allows the investment to be accounted for using the equity method. A key advantage of this approach is that the insurer recognizes investment income based on its ownership stake whenever the listed company reports profits. Fluctuations in the stock price do not affect current-period earnings, helping insurers balance equity returns with financial statement stability. This is a primary reason why insurance capital tends to hold high-quality listed companies long-term. Although Xinhua Insurance has appointed a director to Guotai Haitong, it has not yet included the investment in long-term equity investments. Whether it will adjust its accounting treatment remains a point for market observers to watch closely.
