On November 6, Caixin Financial News (Reporter: Zou Juntao) reports that insurance institutions continue to acquire stakes in Hong Kong-listed companies. On the evening of November 6, China Postal Insurance announced that as of October 22, 2024, the company held 24,828,000 H shares of Anhui Expressway, accounting for approximately 5.0360% of the company's H share capital.

Caixin Financial News reporters noted that insurance institutions have once again increased their stakeholdings recently. Earlier this month, Rui Zhong Life Insurance increased its stake in and disclosed its shareholding in China Longyuan Power's H shares. Up to now, there have been two insurance capital shareholding cases this month, both of which involve H shares, making it the second most intense month for insurance institutions after August this year.

Industry insiders point out that insurance institutions' keen interest in acquiring H shares is primarily due to the need for asset allocation. From the perspective of asset selection, blue-chip stocks in the domestic A-share market are generally undervalued, while H-share investors are primarily institutions with strong price discovery functions. Concerning the intensification of shareholding by insurance institutions this year, the industry believes it may be related to 'interest spread losses' and solvency issues.

China Postal Insurance is involved in a 2.8091 million increment in shareholding in Anhui Expressway through disclosure of shareholding.

Before this shareholding, China Postal Insurance already held 24,544,000 H shares of Anhui Expressway, accounting for 4.9784% of its H share capital.

According to the Hong Kong Stock Exchange's equity disclosure information, on October 22, China Postal Insurance acquired an additional 0.284 million shares of Anhui Expressway shares through the Shanghai-Hong Kong Stock Connect from the Hong Kong secondary market, with an average price of 9.8912 Hong Kong dollars per share, involving 2.8091 million Hong Kong dollars. The latest number of shares held after the acquisition is 24.828 million shares, increasing the shareholding percentage from 4.9784% to the current 5.0360%.

In its announcement, China Postal Insurance pointed out that the participant in this shareholding of Anhui Expressway H shares is the company itself. The trustee is China Postal Insurance Asset Management Co., Ltd. (hereinafter referred to as 'China Postal Asset Management').

China Postal Insurance stated that, based on the closing price of Anhui Expressway H shares and the closing exchange rate between Hong Kong dollars and RMB on October 22, 2024, the company's holding value of Anhui Expressway shares is approximately RMB 0.2258 billion, accounting for 0.038% of the total assets at the end of the third quarter of 2024, in compliance with regulatory requirements.

It is understood that China Postal Insurance was established on August 18, 2009, engaging in life insurance, health insurance, accidental injury insurance, and other personal insurance businesses. The actual controlling entity is China Post Group. According to information disclosed on the website of the China Insurance Association, this marks the first time that China Postal Insurance has issued a disclosure announcement regarding shareholding.

According to the announcement tonight, as of September 30, 2024, the equity assets balance of China Postal Insurance amounted to RMB 80.8 billion, accounting for approximately 14.74% of the total assets at the end of the second quarter of 2024.

Information shows that the main business of Anhui Expressway is holding, operating, and developing toll expressways and highways within Anhui Province. Currently, the company owns six expressways and one primary road namely, Hening Expressway, Gaojie Expressway, Xuanguang Expressway, Lianhuo Road Anhui Section, Ninghuai Expressway Tianchang Section, Ningxuanhang Expressway Ningxuan Section, Ningqian Section, and Xinxi 205 National Road. The company's operated sections mainly serve as the major east-west national thoroughfares, playing a significant role in highway transportation in Anhui Province and nationally.

The latest third-quarter report shows that as of the end of September this year, Anhui Expressway achieved a total operating income of RMB 5.054 billion, a year-on-year increase of 16.07%; the net profit was RMB 1.121 billion, a year-on-year decrease of 9.6%.

Insurance capital's shareholding has recently heated up again, involving an increase to 12 listed companies.

Financial Union reporters have noted that insurance capital's shareholding has recently intensified once again. On November 1, Rui Zhong Life Insurance announced that the company acquired 4.188 million shares of China Longyuan Power H shares on October 28, holding a total of 0.417991 billion shares of China Longyuan Power H shares, accounting for 5% of the total share capital of the listed company, triggering a disclosure of shareholding.

According to information disclosed on the website of the China Insurance Association, as of the current month, there have been two cases of insurance capital's shareholding. Prior to this recent intense shareholding in the current month, such a concentrated shareholding activity occurred in August this year, with three shareholding actions initiated by Changcheng Life, a subsidiary of China Pacific Insurance, and Rui Zhong Life.

According to incomplete statistics from Caixin, as of November 6th, there have been a total of 13 instances of insurance companies making shareholding acquisitions this year, involving up to 12 listed companies. Both the number of shareholding acquisitions and the number of listed companies involved have reached a new high in nearly four years.

Among them, Changcheng Life Insurance has made shareholding acquisitions in 6 listed companies this year, namely Wuxi Rural Commercial Bank, City Development Environment, Qinhuangdao Port, Jiangsu Jiangnan Water, Jiangxi Ganyue Expressway, and Dynagreen Env; Zijin Property & Casualty Insurance has made a shareholding acquisition in Wuxi Huaguang Environment & Energy Group; a subsidiary of China Pacific Insurance has made shareholding acquisitions in Huadian Power and Huaneng Power; Ruizhong Life Insurance has made shareholding acquisitions in China Longyuan and China Tourism Group Duty Free Corporation; and China Post Insurance has made a shareholding acquisition in Anhui Expressway.

Looking at the industry attributes of the listed companies that have been acquired, they include public utilities, banks, and transportation. In the industry's view, the companies acquired by insurance capital this year generally have high dividend characteristics. According to Huachuang Securities research reports, as of 2023, the targets of shareholding acquisitions show a tightening of long-term private equity investment risk factors, a weakening of high ROE characteristics in shareholding acquisitions, and a further emphasis on dividend styles.

The institution points out that 'interest rate spread losses' and solvency could be frequent motives for shareholding acquisitions, and the trend of industry-wide shareholding acquisitions is expected to continue, albeit at a slower pace. From a medium to long-term perspective, the acquisitions by insurance capital may have long-term effects on their high-quality development and the enhancement of intrinsic stability in the capital markets.