Recently, China Life Insurance Company Limited once again announced the listing of ICBC H shares, which is the second time this year that the Guoshou Department has raised ICBC H shares.

China Life Insurance Company Limited disclosed that on September 21, China Life Insurance Company Limited bought 20 million Industrial and Commercial Bank of China H shares from the secondary market of Hong Kong stocks through the Shanghai-Hong Kong Stock Connect. As of the 21st, Industrial and Commercial Bank of China's H shares held by China Life Insurance Company Limited were about 4.359 billion shares, accounting for 5.0219% of the listed company's H shares. Guoshou Group holds 4.694 billion H shares of Industrial and Commercial Bank of China, accounting for about 5.4077 per cent of its H share capital.

This is the second time that the insurance fund has raised the card in September. Since the beginning of this year, nine insurance companies have raised their cards a total of 19 times, reaching a four-year high. In terms of quantity, there are 7, 10 and 8 cases of listed companies in 2017, 2018 and 2019 respectively.

The department of national longevity has raised its brand ICBC twice this year.

After the completion of the transaction, the proportion of Industrial and Commercial Bank of China H shares held by China Life Insurance Company Limited rose from 4.9989% to 5.0219%. According to this calculation, China Life Insurance Company Limited bought 20 million Industrial and Commercial Bank of China H shares from the secondary market of Hong Kong stocks through the Shanghai-Hong Kong Stock Connect on September 21.

Industrial and Commercial Bank of China's H shares closed at HK $4.20 on Sept. 21, with a lowest price of HK $4.19 and an average price of HK $4.227. If calculated at the lowest price, China Life Insurance Company Limited's increase will cost at least HK $83.8 million.

In addition to this move, China Life Insurance Company Limited Group also increased its stake in ICBC H shares by 5 million shares on June 3.

After the September 21 deal, Guoshou merged 4.694 billion shares of Industrial and Commercial Bank of China's H shares, accounting for about 5.4077 per cent of ICBC's H shares. It mainly includes: Guoshou Group holds 205.75 million shares of ICBC H shares, with a shareholding ratio of 0.2371%. China Life Insurance Company Limited and China Life Insurance Company Limited overseas companies controlled by Guoshou Group hold 4.359 billion shares and 129 million shares of ICBC H shares respectively, accounting for 5.0219% and 0.1486% of ICBC H shares respectively.

As of Sept. 21, China Life Insurance Company Limited's book balance of Industrial and Commercial Bank of China's H-shares (based on the closing price on Sept. 21 and the central parity of the people's Bank of China against the renminbi) was 15.967 billion yuan, accounting for 0.40% of the company's total assets at the end of the second quarter of 2020.

The following is Guoshou's shareholding in Industrial and Commercial Bank of China's H shares:

As usual, Guoshou increased its holdings of Industrial and Commercial Bank of China H shares from the insurance liability reserve. According to the data, as of September 4, the balance of China Life Insurance Company Limited's traditional, dividend and universal accounts investing in Industrial and Commercial Bank of China's H shares was 7.361 billion yuan, 7.919 billion yuan and 880 million yuan respectively, with an average holding period of 413,371,313 days.

Since the beginning of this year, Guoshou has raised its cards frequently, reaching a record seven times. As a matter of fact, China Life Insurance Company Limited's move to adjust his position is also quite prominent in this year's insurance equity investment. What is the consideration of raising cards one after another? How are the underlying stocks selected?

At the performance conference held at the end of March this year, the person in charge of China Life Insurance Company Limited Investment said that the recent move to raise the brand in the capital market is based on Guoshou's long-term strategic allocation and short-term strategic considerations, and the selection of underlying stocks is based on a series of criteria. Including growth, value, dividends, etc., select the leading stocks that meet the long-term holding requirements, and then allocate them, "with the adjustment of the market. Especially when the stock market is under pressure, this strategy will be more effective, and we will be more proactive in seizing some long-term allocation opportunities. "

Why the risky Capital "huddled" in Investment Bank stocks

Guoshou's preference for Industrial and Commercial Bank of China is inseparable from its "soundness and high dividend yield". At the share price level of September 25, 2020, Industrial and Commercial Bank of China's A-share dividend yield was 5.37% and H-share dividend yield was 7.2%, both higher than the return on assets in the same period.

Industrial and Commercial Bank of China's dividend was as high as 93.7 billion yuan in 2019, making it not only the bank with the highest profit distribution among large state-owned banks, but also the company with the highest A-share dividend in 2019. Since listing, Industrial and Commercial Bank of China has created a cumulative cash dividend return of 998.8 billion yuan for common shareholders, and the cash dividend ratio has been maintained at more than 30 per cent.

In 2019, Industrial and Commercial Bank of China paid a final dividend of 0.2628 yuan per share in 2019, and the equity registration date was June 23 and July 21, taking the 4.34 billion ICBC H shares held by Guoshou Department at that time. Guoshou Department only holds ICBC H shares and receives ICBC dividend of 1.14 billion yuan.

Guoshou Bank has raised its cards many times Industrial and Commercial Bank of China is only a reflection of the fact that bank stocks are favored by dangerous assets, which have been listed many times this year.

On June 1, China Life Insurance Company Limited announced that it had increased its holdings and listed Agricultural Bank Of China's H shares. As of May 26, Guoshou Group had merged 3.074569 billion shares of Agricultural Bank Of China's H shares, accounting for about 10.02% of Agricultural Bank Of China's H shares. China Life Insurance Company Limited's first listing of Agricultural Bank Of China's H shares took place on February 19th.

In addition to Guoshou Department successively raised Agricultural Bank Of China H shares, ICBC H shares, this year Taiping Life has also raised Agricultural Bank Of China H shares.

According to the second quarterly report data disclosed by listed companies, the market value of bank stock positions held by insurance funds at the end of the second quarter exceeded 300 billion yuan, accounting for more than 55% of the market value of insurance positions at the end of the second quarter.

Bank stocks generally have the characteristics of low valuation and high dividend yield, so they are not only the type of stocks preferred by large-scale risk capital, but also suitable for holding large funds which prefer long-term investment. Banks not only operate soundly, but also bring long-term and stable dividend income. Bank stocks belong to high dividend stocks, which have always paid more dividends. Bank shares in Hong Kong are also more attractive than A shares because financial H shares generally have a discount to A shares, but can achieve the same dividend as A shares, that is, H shares have a higher dividend yield. For example, on September 25, the dividend yields of ICBC H-shares and Agricultural Bank Of China H-shares reached 7.2% and 8.3% respectively, and their latest price-to-book ratios (PB) were only 0.48 and 0.38 times.

The insurance fund has been raised 19 times this year.

As the second largest institutional investor in A shares, the trend of insurance funds has always been the focus of the market. Since the beginning of this year, dangerous assets have listed companies one after another, which has aroused widespread concern in the market.

It is worth noting that 12 of the 19 shares raised this year have been invested in Hong Kong stocks. Unlike the listing A shares, the listing of Hong Kong stocks is actually a declaration of rights and interests, which often means that the shareholding accounts for 5% of the share capital of Hong Kong shares or tradable shares, while the proportion of non-shareholdings to the total share capital of the company reaches 5%. The actual proportion of total equity holdings will be lower. This is an important reason for the substantial increase in the number of insurance cards this year.

Even so, the rapid growth in the number of cards still reflects the investment trend of risky capital to some extent. So, how does the risk capital view the trend in the second half of the year?

Zhang Di, head of China Life Insurance Company Limited Capital Management Center, said at the interim results conference at the end of August that in the long run, there are many factors driving the long-term improvement of the stock market, including:China's economy has been improving for a long time, the dividend of capital market reform has been gradually released, the structure of residents' asset allocation has changed, and the market liquidity is very sufficient, so they have great confidence in the equity market for a long time. In the short term, we also need to pay attention to some risk factors, including geopolitics, the rebound of the epidemic, as well as the high early gains of some hot plates, and so on.

She said that on the premise of being optimistic about the equity market for a long time, China Life Insurance Company Limited will adopt a more flexible strategy and seize some structural opportunities around the hub and upper and lower limits of his strategic asset allocation. strike a good balance between controlling short-term fluctuations and achieving long-term gains.

China Life Insurance Company Limited's raising of the card is also the second time that the insurance fund has raised the card in September. Since the beginning of this year, nine insurance companies have raised their cards a total of 19 times, reaching a four-year high. In terms of quantity, there are 7, 10 and 8 cases of listed companies in 2017, 2018 and 2019 respectively.

According to the announcement on the website of the China Insurance Industry Association, 19 times of insurance fund raising this year and 9 times in 2019 are:

1. Huatai assets holding Brand China creates High-tech

On January 9, Huatai assets spent 279 million yuan to accept the transfer of China High-tech 73.3 million shares. According to the disclosure, on January 9, Huatai assets issued and managed the account of "Huatai assets-win-win Series Special products (Phase 1)" by way of agreement transfer, from the transferor Guochuang Hi-Tech Industrial Group transferred 73.3 million shares of the listed company Guochuang Hi-Tech, with a shareholding ratio of 7.9993%, reaching the 5% holding line, with a transaction value of about 279 million yuan. Prior to the transaction, "Huatai assets-win-win series of special products (Phase 1)" did not invest in Guochuang high-tech. The source of funding for this license is the funds raised from qualified investors by "Huatai assets-win-win Series of Special products".

2. China Life Insurance Company Limited raised the card Agricultural Bank Of China H shares

On February 17th, 18th and 19th, China Life Insurance Company Limited continuously bought a total of 81.2 million H shares of Agricultural Bank Of China through the secondary market of Hong Kong stocks. Before February 17, 2020, China Life Insurance Company Limited held 1.456 billion H shares of Agricultural Bank Of China, with a shareholding ratio of 4.7377%. After three consecutive days of trading, as of February 19, China Life Insurance Company Limited's H shares in Agricultural Bank Of China were 1.538 billion shares, the proportion of shares rose from 4.7377% to 5.0018%, and the combined shareholding of the company and people acting in concert rose from 4.9829% to 5.2470%. China Life Insurance Company Limited's capital for this increase comes from the insurance liability reserve.

3. Taibao Life Insurance Jinjiang Capital H shares

On February 19th, Taibao Life Insurance directly bought H shares of Jinjiang Capital in the Hong Kong market through the QDII account managed by the trustee Taibao Capital Management. Before listing, Taibao Life Insurance held 69.494 million shares of Jinjiang Capital. After listing, it held 69.786 million shares of Jinjiang Capital, accounting for about 5.015% of its outstanding shares in Hong Kong. Based on the closing price of Jinjiang Capital on February 19, 2020 and the exchange rate of Hong Kong dollar to RMB 0.90, the book balance of Jinjiang Capital shares held by Taibao Life Insurance is 89 million yuan, accounting for about 0.007% of the total assets of Taibao Life Insurance in the fourth quarter of 2019.

4. Ganfeng Lithium H shares of Taibao Department

On February 24th, Taibao Group and its holding subsidiary bought a total of 2.4052 million H shares of Ganfeng Lithium. Together with the previous 7.9172 million H shares of Ganfeng Lithium, the total number of Ganfeng Lithium H shares held by Taibao reached 10.3224 million, accounting for 5.16% of the issued H shares of Ganfeng Lithium.

5. China Life Insurance Company Limited raised his H-share CGN Power Co.,Ltd.

On March 13, China Life Insurance Company Limited again bought CGN Power Co.,Ltd. from the secondary market of Hong Kong stocks through the Hong Kong Stock Connect, buying 6 million shares on the same day, making his shareholding exceed 10% from 9.952% to 10.005%. As of the 13th, the book balance of holding CGN Power Co.,Ltd. H shares was 1.769 billion yuan.

6. Taibao Life Insurance once again listed Jinjiang Capital H shares

On March 18, Taibao Life Insurance bought Jinjiang shares in the Hong Kong market through Pacific Asset Management through an entrusted QDII account, and held about 146 million Jinjiang shares after listing, accounting for about 10.46 per cent of its outstanding shares in Hong Kong.

7. Citic Prudential plc Life Insurance holding H shares

On March 19, Citic Prudential plc Life Insurance bought China Everbright Investment Management's (Hong Kong stock 00165) H shares from the Hong Kong stock secondary market through the Shenzhen-Hong Kong Stock Connect. After raising the card, it holds about 5.1323% of China Everbright Investment Management's Hong Kong tradable shares.

8. Agricultural Bank Of China H shares of Taiping Life Insurance Company

On March 23, Taiping Life paid HK $85 million to buy 29.983 million Agricultural Bank Of China H shares from the Hong Kong stock secondary market through the Shanghai-Hong Kong Stock Connect. After listing, it held 1.545 billion Agricultural Bank Of China H shares, accounting for 5.03 per cent of its outstanding shares in Hong Kong.

9. Citic Prudential plc Life Insurance raised China International Marine Containers H shares

On January 6th, the company bought China International Marine Containers H shares from the secondary market of Hong Kong stocks through the Shenzhen-Hong Kong Stock Connect. After this move, Citic Prudential plc Life held 103 million H shares of China International Marine Containers, accounting for about 5.0121 per cent of its H share capital. Based on the closing price of China International Marine Containers H shares at HK $7.41 per share and the exchange rate of HK $0.8958 to RMB on January 6, 2020, Citic Prudential plc Life held a book balance of 685 million yuan for China International Marine Containers H shares, accounting for about 0.865% of Citic Prudential plc Life's total assets at the end of the fourth quarter of 2019.

10. Taibao Life Insurance Jinjiang Capital H shares

On April 7, Tai Bao Asset Management, the trustee of PICC Life Insurance, bought Jinjiang Capital shares in the Hong Kong market through the entrusted PICC Life Insurance account. Before this listing, PICC held 208 million shares of Jinjiang Capital H shares, compared with about 14.98 per cent of outstanding shares in Hong Kong. After this listing, Taibao Life Insurance holds 210 million shares of Jinjiang Capital, accounting for about 15.10% of its outstanding shares in Hong Kong.

11. China Life Insurance Company Limited Group raises its shares Agricultural Bank Of China H shares

On June 1, China Life Insurance Company Limited announced that it had increased its holdings and listed Agricultural Bank Of China's H shares. As of May 26, Guoshou Group had merged 3.074569 billion shares of Agricultural Bank Of China's H shares, accounting for about 10.02% of Agricultural Bank Of China's H shares. The source of funds for Guoshou Department to increase its shareholding in Agricultural Bank Of China is the insurance liability reserve.

12. Citic Prudential plc Life Insurance raised its card China International Marine Containers

On the evening of June 1st, China International Marine Containers announced that CITIC Prudential plc Life Insurance Company had increased its holdings of 7.1375 million A shares (000039.SZ) through the secondary market on May 29th. After the completion of this equity change, Citic Prudential plc Life Insurance holds a total of 186 million shares of China International Marine Containers's A shares and H shares, including 19.73 million A shares and 166 million H shares, accounting for 5.19% of the listed companies. The source of funds for the purchase of China International Marine Containers shares is the insurance liability reserve of CITIC Prudential plc Life Insurance.

13. China Life Insurance Company Limited Group raises the H shares of ICBC

On June 9, China Life Insurance Company Limited Group announced that it would increase its stake in Industrial and Commercial Bank of China H shares (1398.HK) by 5 million shares on June 3, and then reached the listing, that is, the Guoshou Department held a total of 4.34 billion shares of Industrial and Commercial Bank of China H shares, accounting for about 5.0001% of ICBC's H shares.

14. Centennial Life holds up the brand to take care of home furnishings

On June 24, Centennial Life bought about 36.16 million shares of Gu Home through agreed transfer, accounting for 6% of the existing total shares of Gu Home. As of June 24, Centennial Life held a book balance of 1.465 billion yuan for home furnishings.

15. Taiping Life Insurance Investment Zoomlion Heavy Industry Science and Technology

On July 4, Taiping Life participated in investing in Zoomlion Heavy Industry Science and Technology's private A-shares, involving a capital of 1.9 billion yuan. After participating in the investment, Taiping Life held about 360 million Zoomlion Heavy Industry Science and Technology A shares, accounting for 3.93 per cent of the total share capital of the listed company and 5.53 per cent of its A shares.

16. China Life Insurance Company Limited raised the shares of Guangbai

On June 12, China Life Insurance Company Limited subscribed for the private offering of Guangbai shares, with a corresponding amount of 700 million yuan.

17. China Life Insurance Company Limited increases his stake in Wanda Information

China Life Insurance Company Limited announced that it plans to subscribe for 92.85 million shares of Wanda Information non-publicly issued shares with its own funds, accounting for 7.2515% of the company's total share capital after the non-public offering, and the corresponding amount of the increase does not exceed 2 billion yuan. After this change of rights and interests, China Life Insurance Company Limited and his actors hold 309 million shares of Wanda Information, accounting for 24.1053% of the total shares of listed companies.

18. Taikang is a transferee of Sunshine City shares.

On the evening of September 9, Sunshine City announced that Shanghai Jiawen, the company's second largest shareholder, had transferred 13.53% of its shares through an agreement, and the transferee Taikang Life and Taikang pension had been transferred 8.53% and 5% respectively. In addition, Taikang assets, also a member of Taikang Insurance Group, previously held a 0.07 per cent stake through asset management products and a 0.006 per cent stake held by Taikang Life Insurance. Taikang's three companies have a combined shareholding of 13.61%, making it the third largest shareholder in Sunshine City. The share price of the transfer is 6.09 yuan per share, and the total transfer price is 3.378 billion yuan.

19. China Life Insurance Company Limited increases his stake in H shares of ICBC

China Life Insurance Company Limited bought 20 million Industrial and Commercial Bank of China H shares from the secondary market of Hong Kong stocks through the Shanghai-Hong Kong Stock Connect on September 21. As of the 21st, Industrial and Commercial Bank of China's H shares held by China Life Insurance Company Limited were about 4.359 billion shares, accounting for 5.0219% of the listed company's H shares. Guoshou Group holds 4.694 billion H shares of Industrial and Commercial Bank of China, accounting for about 5.4077 per cent of its H share capital.