Source: Brokerage China
Author: Ma Chuanmao

Latest information disclosed by the Hong Kong Stock Exchange shows that Ping An Life increased its shareholding by 6.0775 million shares on March 13.$CM BANK (03968.HK)$After the shares Listed in Hong Kong, it reached 10% of the bank's H-share capital on that day, triggering the reporting requirement according to Hong Kong market rules.

Before this, Ping An Life had reported its stake in CM BANK's H-shares on January 10, where the shares it held accounted for over 5% of the total H-shares of the bank. This means that Ping An Life has reported its stake in CM BANK's H-shares for the second time within about two months.

As of now, in 2025, there have been 10 listed companies that have been reported by insurance capital, including 5 banks, with CM BANK being the only listed bank that has had its stake reported for the second time.

Once again, a Shareholding for CM BANK.

According to disclosed information, as early as January 10, Ping An Life Insurance had already made a Shareholding in CM BANK's H shares, with the number of H shares held at that time reaching 5% of the bank's H share capital.

By March 13, Ping An Life Insurance spent nearly 0.3 billion Hong Kong dollars to further increase its position by 6.0675 million shares of CM BANK's H shares, bringing its shareholding ratio to over 10% of the total H shares of the bank, constituting a second Shareholding.

Based on this calculation, from January 10 to March 13, Ping An Life Insurance had cumulatively increased its holdings by nearly 0.234 billion shares of CM BANK's H shares. Based on the average transaction price during this period, the total expenditure was approximately 10.5 billion Hong Kong dollars.

As of March 13, Ping An Life Insurance held approximately 0.462 billion shares of CM BANK's H shares, accounting for 1.76% of the bank's total equity, with the latest market value exceeding 23 billion Hong Kong dollars.

According to Statistics, as of the close on March 18, the share price increase for CM BANK's A shares and H shares this year reached 14.9% and 26.4% respectively, ranking first among A-share listed banks and H-share listed banks.

According to the arrangement, CM BANK will disclose its 2024 annual report on the evening of March 25. Prior to this, the bank had released a performance brief in mid-January.

Data shows that last year CM BANK achieved revenue of 337.54 billion yuan, a slight decline of 0.5% year-on-year, and net income attributable to the parent increased by 1.2% to 148.39 billion yuan. The growth rates for both metrics improved compared to the first three quarters of last year, with net income growth turning positive.

It is worth mentioning that the bank's non-interest income grew by 1.5% year-on-year last year, with a significant rebound compared to the first three quarters. In the fourth quarter last year, the non-interest income for that quarter increased by 16.6% year-on-year.

At the end of last year, CM BANK's total assets reached 12.15 trillion yuan, an increase of 10.2% compared to the beginning of the year. Among them, the total amount of loans increased by 5.8% compared to the beginning of the year; the non-performing loan ratio remained stable at 0.95%.

CM BANK's Vice President Peng Jiawen stated at the performance exchange meeting in the third quarter of last year that the overall social financing and loan growth rate in 2025 is expected to be higher than that in 2024, so CM BANK's loan growth rate should also be better than that in 2024.

"In addition, CM BANK will continue to maintain a good growth momentum in retail loans and continuously optimize the structure," Peng Jiawen said.

The wave of shareholding initiatives is rising.

According to statistics by reporters from Brokerage China, as of now, 10 listed companies in 2025 have been targeted by insurance funds, including 5 banks, with CM BANK being the only listed bank that has been targeted for a second time. Specifically:

On January 8th, Ping An Life held$PSBC (01658.HK)$The number of shares listed in Hong Kong has exceeded 5% of the bank's equity, triggering a notice. As of March 10, its shareholding ratio has surpassed 8%, with an estimated total expenditure of over 3 billion Hong Kong dollars based on the average transaction price during this range.

On January 10, the number of shares in CM BANK held by Ping An Life surpassed 5% of the bank's equity, triggering a notice. By March 13, its shareholding ratio had exceeded 10%, with an estimated total expenditure of about 10.5 billion Hong Kong dollars based on the average transaction price during this range.

On February 17, the number of shares in Agricultural Bank of China held by Ping An Life exceeded 5% of the bank's equity, triggering a notice. By March 13, its shareholding ratio surpassed 8%, with an estimated total expenditure of about 4.5 billion Hong Kong dollars based on the average transaction price during this range.

Earlier, on December 20 of last year, Ping An Life announced its stake.$ICBC (01398.HK)$Listed in Hong Kong, the number of H shares held by this bank has exceeded 15% of the total H shares. By February 12 of this year, its shareholding ratio had exceeded 17%, and based on the average transaction price during this period, the total shareholding increase cost nearly 10 billion Hong Kong dollars.

Ping An Group also increased its holdings by 67.703 million shares on December 18 of last year.$CCB (00939.HK)$After increasing the shareholding, Hold 12.039 billion shares of China Construction Bank Corporation's H shares, accounting for over 5% of the total H shares of the bank. Among them, Ping An Life directly holds 11.224 billion shares of China Construction Bank Corporation's H shares, just one step away from the 5% threshold.

$NCI (01336.HK)$On January 24 of this year, it acquired the shares held by Australia and New Zealand Banking Group through agreement transfer.$Bank Of Hangzhou (600926.SH)$0.33 billion shares, with a transfer price of 4.317 billion yuan. After the completion of this acquisition,$New China Life Insurance (601336.SH)$will Hold 5.87% of the Bank's shares.

In addition, on March 12, Ruizhong Insurance increased its shareholding by 3 million shares$CITIC BANK (00998.HK)$Listed in Hong Kong shares, after the increase, Hold 0.744 billion shares of China CITIC Bank Corporation Listed in Hong Kong shares, accounting for over 5% of the Bank's Listed in Hong Kong capital, triggering a stake acquisition.

Continuous allocation

Since the beginning of 2024, insurance funds have noticeably increased their shareholding and stake in bank stocks, and the pace of stake acquisition has further accelerated this year.

The chief Analyst of the Banking Industry at China Merchants, Wang Xianshuang, stated in the Research Reports that bank profits and dividends are stable, with high dividend yields, meeting the investment needs of insurance.

According to its Statistics, as of March 14, the average dynamic dividend yield of A-share listed Banks is 4.59%, while for Hong Kong listed Banks, it is 5.69%. Compared to the current yield of government bonds below 2%, the investment value is highlighted.

In addition, if insurance companies invest in bank stocks accounted in FVOCI Accounts, the dividend income will be included in the current profit and loss, while Other gains or losses will be included in Other comprehensive income. Stock price fluctuations will not directly reflect in the current income statement.

Wang Xianshuang expects that as the scale of insurance continues to expand, policies encouraging insurance funds to enter the market, combined with the opportunity brought by the revision of the Company Law to abolish the Supervisory Board, insurance holdings in bank stocks are likely to usher in a new pattern.

The team of Chen Shaoxing, the chief Analyst of the Banking Industry at Industrial Securities, also believes that looking ahead, insurance funds are expected to continue to increase their allocation to banks:

On the one hand, long-term interest rates are trending downwards + high-yield assets are gradually maturing, which puts significant asset reallocation pressure on insurance companies.

"The high dividends of bank stocks + long-term stable dividend returns significantly enhance their attractiveness to market funds. Currently, the average dividend yield of the five major state-owned banks is around 4.7%, which still has about a 290 basis points premium over the yield of ten-year government bonds, indicating a high long-term allocation value."

On the other hand, under the comprehensive implementation of the new accounting standards, insurance funds are more inclined to increase their allocation to FVOCI high dividend assets + long-term equity investments under the equity method to reduce profit fluctuations.

The Chen Shaoxing team believes that under the new standards, increasing the allocation of FVOCI high dividend assets can reduce the volatility of current investment returns while obtaining high dividends, making it one of the important directions for equity investment in insurance companies in the future.

In addition, increasing the stake in high-quality symbols and enhancing the long-term equity investment ratio under equity method accounting is both a choice for stabilizing the profit statement and increasing investment returns, as well as actively aligning with the policy direction of insurance funds and other medium to long-term funds entering the market.

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Editor/Jeffy