Source: Economic Reference Daily
Reporter: Xiang Jiaying
The China Insurance Association's official website recently disclosed that New Life Insurance increased its holdings in Guotai Haitong H-shares by 995.96 million shares through centralized bidding on the secondary market on 9/29. This represents approximately 0.28% of its issued H-share capital. Following this change, New Life Insurance and its concert parties collectively hold about 7.1 billion H-shares of Guotai Haitong, with their shareholding ratio rising from 19.96% to 20.24%. The book balance is 89.70 billion yuan, accounting for 0.48% of the company's total assets at the end of the previous quarter.
This marks the first time in 2026 years that an insurance investor has made a significant stake acquisition in a securities firm, and it is Xinhua Insurance's second such move within a week: On 9/22, the company increased its holdings of AVIC Industry Holdings (H-shares) by 1687.6 million shares via centralized bidding on the secondary market, raising its shareholding percentage from 4.89% to 5.17%.
As of now, 5 insurance companies have taken stakes in listed companies 9 times this year, compared to 13 companies with over 30 instances in the same period last year—a drop of more than 70%. In contrast, capital allocation by insurers into equity assets has not contracted. By the end of Q2, the stock allocation ratio had risen for 8 consecutive quarters.
Pace of bidding slows
Benefits configuration remains unchanged
Insurance capital's takeover attempts have declined significantly this year. Among the companies involved, Ping An Life Insurance has been the most active, making successive moves to acquire stakes in Agricultural Bank of China (H shares), China Merchants Bank (H shares), and China Life Insurance (H shares), with China Life Insurance being targeted twice. Taiping Life Insurance acquired a stake in Shanghai Airport (A shares), Fude Property & Casualty Insurance took over Yakang Shares, Lianan Life Insurance invested in Zhongshan Public Utilities, and New China Life Insurance made moves on AVIC Industry (H shares) and Guotai Haitong (H shares).
An increase in shareholding by insurance companies does not signal a cooling of equity investments. According to data from the National Financial Regulatory Administration, as of the end of Q2, the total balance of insurance fund operations surpassed 40 trillion yuan for the first time, reaching 40.82 trillion yuan. Investments in stocks and securities investment funds amounted to 6.4 trillion yuan, an increase of 0.7 trillion yuan compared to the beginning of the year. Specifically, stock investments totaled 4.1 trillion yuan, representing a portfolio allocation of 10.41%, which has increased quarter-over-quarter for 8 consecutive quarters. Industry experts note that in a low-interest-rate environment, the rigidity of liability-side costs for insurers makes equity assets—particularly high-dividend and undervalued assets—a key tool for enhancing returns and mitigating pressure from interest rate spreads. Under new accounting standards, high-dividend assets are classified under FVOCI; price fluctuations do not affect current net profit, while dividend income is recorded as net investment income, helping to smooth profit volatility. As of 30 July, New China Life held OCI-classified stocks worth 518 billion yuan, up 34% from year-end last year, accounting for approximately 21% of its stock holdings. This remains lower than peer listed insurers, indicating room for further accumulation.
New China Life Insurance's stake acquisition in Guotai Haitong H-shares serves as a benchmark for analyzing this allocation logic. Formed by the merger of Guotai Junan Securities and Haitong Securities, Guotai Haitong reported total assets of 2.50 trillion yuan at the end of the first half of 2026, surpassing CITIC Securities' 2.47 trillion yuan. First-half revenue reached 471.63 billion yuan, up 97.56% year-over-year; net profit attributable to parents was 202.60 billion yuan, up 28.74% year-over-year; and net profit after deducting non-recurring items stood at 195.10 billion yuan, up 168.02% year-over-year. As of 10/9, Guotai Haitong H-shares offered a dividend yield of 5.24%, with a TTM P/E ratio of 6.83x. In comparison, the CSI All Share Securities Index posted a TTM P/E ratio of 11.93x. H-shares traded at 14.23 HKD per share versus 16.81 CNY per share for A-shares, reflecting a significant discount on H-shares relative to A-shares.
Huachuang Securities' research report suggests that insurance capital's motivation for stock blockholdings generally falls into two categories: one is to seek high-dividend "fixed-income-like" targets based on dividend yield, thereby hedging against the risk of falling interest rates.
Second, from an ROE perspective, insurance capital tends to invest in central and state-owned enterprises, industry monopolies, and entities with mature business models through long-term equity investments to acquire high-quality assets.
Tian Lihui, a finance professor at Nankai University, believes that low-valuation, high-dividend assets align well with long-term liability structures. Top brokerages' H-shares trading at discounts and offering stable dividends have become scarce targets for insurers seeking to optimize allocations and alleviate interest rate spread loss pressures.
Financial commentator Guo Shiliang stated that Guotai Haitong's H-shares trade below book value, offering advantages in valuation and dividends. Acquiring stakes in top-tier financial institutions can enhance the quality of asset allocation.
From Shareholding to Diversified Portfolio
Patient capital anchors long-term value
Sino Life Insurance's increase is not an isolated move. Data from the Hong Kong Stock Exchange shows that Sino Life and its concert parties held a stake in Guotai Haitong H-shares that rose continuously after breaking 16% on 5/15. It surpassed 17% on 7/15, 18% on 9/3, 19% on 9/16, and 20% on 9/29, crossing five round-number thresholds over four months. In 2024/11, Sino Life previously took a controlling position in Haitong Securities H-shares with a 5.02% holding. Following the merger of Guotai Junan and Haitong Securities, the stake was transferred to Guotai Haitong, while maintaining board representation. Market analysts attribute this sustained accumulation to two factors: Guotai Haitong is a long-term strategic broker leader, and its H-shares offer high dividends and low valuations aligned with the stable dividend needs of long-term capital. Additionally, Sino Life's plan to classify its investment in Guotai Haitong under equity investment management rather than long-term equity investment reflects considerations regarding earnings volatility under new accounting standards.
However, shareholding is just one form of equity allocation for insurance capital. Given the scarcity of high-quality targets for direct acquisitions, insurers are shifting toward more flexible and capital-efficient approaches such as ETFs, strategic placements, and block trades. Their engagement in primary markets is also intensifying through private equity funds, S funds, and IPO strategic allocations to capture value from enterprise growth. For instance, New China Life Insurance has partnered with CITIC Jinsu and other institutions to establish a 20 billion yuan technology innovation industry investment fund in Hubei. Meanwhile, China Life plans to contribute up to 45 billion yuan to set up the Qingdao Chengxin Zhida Equity Investment Center (Limited Partnership), with a total scale not exceeding 60 billion yuan, focusing on stakes in unlisted companies with strong potential in artificial intelligence and semiconductors. Multiple insurers are refining their investment research frameworks along industrial chains to enhance capabilities in deploying into new quality productive forces, identifying long-term opportunities in strategic emerging sectors including advanced manufacturing, healthcare and biotechnology, next-generation information technology, new materials, new energy and green environmental protection, and new consumption.
Looking ahead, the importance of equity investments by insurance capital will continue to rise amid policy guidance and a low-interest-rate environment. However, the practice of "taking a controlling stake" may fade, with large-scale, long-term holdings increasingly concentrated in top-tier assets and well-capitalized institutions. Li Jian, Chief Non-Banking Analyst at Huatai Securities, has cautioned that long-term equity investments can strain solvency ratios. If book values remain significantly above market prices for extended periods, impairment risks may arise. Some assets also suffer from weak liquidity and difficult exit options, while investments in sectors such as banking may face additional regulatory requirements. Therefore, insurers should carefully evaluate strategic synergies rather than pursuing book-value gains alone. For insurance investors, the key question moving forward is not whether to take a controlling stake, but whether they can achieve a balance between stable returns and long-term value through patient capital across diverse asset classes, channels, and strategies.
