Recent moves in the capital market by the first private equity fund established by major insurance companies, jointly funded by China Life Insurance and New China Life Insurance, have drawn attention: it has begun allocating to leading baijiu stocks.
A recent announcement from Wuliangye Yibin Co.,Ltd. (SZ: 000858) regarding share buybacks revealed that Guofeng Xinghua (Beijing) Private Fund Management Co., Ltd. - Guofeng Xinghua Honghu Zhiyuan Phase II Private Securities Investment Fund is its tenth largest shareholder, holding 19.7685 million shares, representing a 0.51% stake.
Examining Wuliangye's first-quarter 2026 report, the Guofeng Xinghua fund was not listed among the top ten shareholders. This indicates that the fund purchased its stake in Wuliangye after the start of the second quarter of this year.
As long-term capital and stabilizing forces in the capital market, the investment moves of leading insurance companies often serve as a bellwether. Why has the first established insurance-backed private fund started increasing its position in leading baijiu stocks? Which stocks are the various insurance-backed private funds established over the past couple of years heavily invested in?
Initial Foray into Baijiu by Guofeng Xinghua
Guofeng Xinghua Private Fund is the first insurance-backed private equity fund, jointly established by China Life Insurance and New China Life Insurance in December 2023.
Information from the Asset Management Association of China website shows that Guofeng Xinghua was registered on January 8, 2024, with a registered capital of 10 million yuan and a management scale exceeding 100 billion yuan. It currently has five funds in operation.
Consequently, Guofeng Xinghua currently holds the highest market value of equity investments among its peers. Data shows that as of the end of the first quarter of this year, its stock holdings were valued at nearly 19 billion yuan. Having started operations earlier, it also holds a larger number of significant positions compared to other insurance-backed funds.
From the latest disclosures by Wuliangye and Kweichow Moutai, it is evident that Guofeng Xinghua is optimistic about leading baijiu stocks. Although the baijiu sector is still undergoing cyclical adjustment, the overall decline in revenue and net profit for listed baijiu companies narrowed significantly in the first quarter of 2026. Several brokerages have published research reports suggesting that "bottom signals" for the baijiu sector are emerging.
One securities firm's report posits that the baijiu industry has entered a phase of structural bottoming, with a clear trend of fundamental recovery and valuation repair ahead. It also suggests that company-specific risk disturbances may be better alleviated in the first half of this year. Another analysis states that while the baijiu sector's fundamentals are still bottoming out, financial statements began accelerating their clearance in the fourth quarter of 2025. It is expected that year-on-year growth rates in financial statements may start to recover from a low base in the second quarter of 2026, recommending a focus on premium leaders and strong regional brands.
It is observed that the investment strategies of insurance-backed private funds in the capital market show some continuity with the asset-side strategies of their parent insurance companies.
Reviewing the annual reports of Kweichow Moutai and Wuliangye in recent years, China Life Insurance was among the top ten shareholders of Kweichow Moutai in 2020 but exited that list in 2021. China Life was among the top ten shareholders of Wuliangye in 2023, but based on the 2024 and 2025 annual reports, it subsequently exited that list as well.
Guofeng Xinghua has recently shown a fondness for leading baijiu stocks. In addition to Wuliangye, Kweichow Moutai's first-quarter 2026 report shows that Guofeng Xinghua (Beijing) Private Fund Management Co., Ltd. - Honghu Zhiyuan (Shanghai) Private Investment Fund Co., Ltd. newly entered the list of top ten shareholders with a 0.33% stake.
Diverse Focus Areas for Insurance-Backed Private Funds
Since regulators initiated the pilot program for long-term equity investment by insurance funds in 2023, leading insurers have been accelerating their entry into the market through private funds.
To date, there are seven insurance-backed private fund management companies. These include Guofeng Xinghua, jointly funded by China Life Asset Management and New China Asset Management; Taikang Stable Growth Private Equity, established by Taikang Asset Management; CPIC Zhiyuan Private Equity, established by CPIC Asset Management; Hengyi Chiyin Private Equity, established by Ping An Asset Management; PICC Qiyuan Huizhong (Beijing) Private Equity, established by PICC Life; Taiping Private Equity, established by Taiping Asset Management; and Sunshine Hengyi Private Equity, established by Sunshine Asset Management.
Data discloses the significant holdings, as of the end of the first quarter this year, for five of these insurance-backed funds: Guofeng Xinghua, CPIC Zhiyuan, Sunshine Hengyi, Taiping Private Equity, and Taikang Stable Growth.
Specifically, Guofeng Xinghua holds significant positions in ten stocks, including PetroChina, Industrial and Commercial Bank of China, Luzhou Laojiao, CNOOC, Sinopec, Daqin Railway, Haier Smart Home, Shaanxi Coal Industry, SDIC Power Holdings, and China State Construction Engineering.
CPIC Zhiyuan holds significant positions in nine stocks, including Zoomlion, Conch Cement, China Coal Energy, Western Mining, Youngor, Heilan Home, Erdos, Zhongnan Media, and Xiamen C&D. Compared to its previous holdings, CPIC Zhiyuan's portfolio has expanded significantly, moving from holding two significant positions at the end of the third quarter of 2025 to nine.
Furthermore, Sunshine Hengyi holds significant positions in two stocks: Satellite Chemical and Citic Pacific Special Steel. Taiping Private Equity holds a significant position in only one stock: Yunnan Baiyao. Taikang Stable Growth holds a significant position in one stock: Anhui Expressway.
It is evident that insurance-backed private funds tend to allocate to sectors such as energy, transportation, banking, and utilities, many of which offer low volatility and high dividends, aligning well with the long-term investment needs of insurance capital.
Continued Strong Appetite for Equities Among Insurance Capital
Influenced by geopolitical conflicts, the Chinese stock market has exhibited volatile trends this year.
Following global financial market turbulence in late February, Chinese equities were also affected, with the Shanghai Composite Index hitting a year-to-date low of 3794 points on March 23. However, as market sentiment digested the news, the market rebounded from the bottom. As of the close on June 3, the Shanghai Composite Index stood at 4083 points.
Looking at insurance capital deployment in the first quarter, it continued to increase allocations to the stock market, reflecting insurers' confidence in China's economic development. Regulatory data shows that as of the end of the first quarter, life and property & casualty insurance companies collectively allocated 3.837 trillion yuan to stocks, an increase of 2.7% from the end of the fourth quarter of 2025, approaching the scale of active equity funds during the same period.
The enthusiasm of insurance capital for equities stems partly from policy and regulatory requirements, and partly from the inevitable choice amid the reality of an "asset shortage" and the need to avoid "spread loss" risks.
The stock selection approach of insurance-backed private funds also mirrors the broader positioning of insurance capital in the capital market. An analysis based on data for the first quarter of 2026 indicates that insurance capital overall maintained its core holdings in high-dividend sectors like banking and utilities, while marginally increasing allocations to the consumer sector. Allocations to cyclical and real estate chain sectors were reduced. Holdings of leading insurers showed significant divergence, with investments spread across consumption, power utilities, technology hardware, and cyclical energy sectors. China Life and New China Life led in holdings of semiconductors and hardware equipment, suggesting potentially greater flexibility in the second quarter. Overall, insurance capital is engaging in more refined stock selection on a foundation of stable core holdings, with increased flexibility.
Judging from executive remarks at the 2025 annual results conferences of listed insurers, there is a普遍 emphasis on "long-term" investment and a value orientation, with重视 placed on "high-dividend strategies." For instance, China Pacific Insurance, Ping An Insurance, and People's Insurance Company of China have explicitly stated that "high-dividend" stocks are an important allocation direction to enhance net investment returns. New China Life Insurance has also clearly stated its commitment to promoting a high-dividend investment strategy in a low-interest-rate environment.
Regarding allocation choices, listed insurers indicated a focus on national strategies and emerging sectors. For example, China Life Insurance stated that its equity investments will primarily concentrate on three areas: artificial intelligence and semiconductors; healthcare and biotechnology; and green energy and new infrastructure. New China Life Insurance mentioned that one of its investment themes involves industries aligned with national strategic directions, particularly those related to new quality productive forces.
Overall, the current stock selections by insurance-backed private funds clearly reflect the core allocation logic of insurers: "long-termism" and "value stability." Using high-dividend assets as ballast, they actively allocate to new quality productive forces and emerging sectors that align with national strategies, pursuing stable and sustainable returns. Against the dual backdrop of a low-interest-rate environment and capital market volatility, the enthusiasm of insurance capital for entering the stock market remains strong. The establishment of private funds to increase equity investments further demonstrates the proactive role of this "patient capital."
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