On May 28, Ping An Life Insurance announced it had commissioned Ping An Asset Management to invest in the H-shares of China Life Insurance Company Limited, with its holding reaching 15% of China Life's H-share capital as of May 20, triggering a disclosure requirement. This marks the third time in a year that Ping An Life has crossed such a reporting threshold for China Life's H-shares. Previously, the insurer triggered disclosures in August 2025 and February 2026 when its stake reached 5% and 10%, respectively. As of May 20, the book value of Ping An Life's holding in China Life H-shares stood at RMB 29.357 billion, accounting for 0.51% of its total assets at the end of the previous quarter, funded by insurance liability reserves.
The trading pattern indicates this was not a one-off purchase but a systematic accumulation spanning nearly ten months. On May 18, Ping An Insurance, through Ping An Life, purchased an additional 56.75 million China Life H-shares on the market at an average price of approximately HKD 29.60 per share, involving roughly HKD 1.68 billion. Following this purchase, the Ping An group collectively holds about 1.126 billion China Life H-shares, representing 15.13% of its total H-share float. Since the beginning of this year alone, the Ping An group has accumulated over 400 million China Life H-shares.
In fact, since its first disclosure in August 2025, Ping An's accumulation of China Life H-shares has scarcely paused. In less than a year, its stake has risen from under 5% to over 15%, a pace of accumulation that even exceeds its deployment into some bank stocks.
The market's greater focus lies on why Ping An continues to buy China Life. If seeking high dividends alone, Ping An has numerous alternatives. In recent years, it has crossed disclosure thresholds for H-shares of several financial institutions including Agricultural Bank of China, Postal Savings Bank of China, China Merchants Bank, and China Pacific Insurance. In contrast, consecutively triggering disclosures three times for the same insurance company is relatively uncommon in Ping An's recent investment portfolio.
From the perspective of insurance fund allocation logic, China Life's H-shares possess multiple characteristics: high dividend yield, low valuation, and suitability for long-term holding. In the current low-interest-rate environment, insurance funds face significant asset allocation pressure. On one hand, yields on traditional fixed-income assets continue to decline; on the other, insurance liabilities have long durations, necessitating the search for long-term assets that can provide stable cash flows. Compared to chasing high-volatility growth stocks, high-dividend financial stocks better align with insurers' requirements for stable returns and asset-liability matching.
As one of China's leading life insurers, China Life has maintained a relatively high dividend payout level. Simultaneously, its H-share valuation has long been lower than its A-shares, placing it in a relatively undervalued range within the Hong Kong market. For life insurance funds with liability cycles exceeding a decade, such assets can provide sustained dividends while also offering potential for valuation recovery.
More importantly, under the new accounting standards, the allocation logic for insurance funds regarding equity assets is evolving. The market widely believes that, compared to pursuing short-term capital gains, insurance institutions increasingly prefer assets suitable for long-term holding, with stable dividends and relatively controllable profit volatility—characteristics that China Life H-shares precisely embody. To some extent, Ping An is not merely buying China Life's dividend yield but is also betting on a long-term recovery in the insurance sector's fundamentals.
From an industry perspective, a notable trend is emerging in the insurance sector: insurance funds are frequently increasing stakes in peer companies. In the first quarter of this year, China Life increased its holding of Ping An Insurance's A-shares by over 43 million shares. During the same period, New China Life Insurance increased its stake in People's Insurance Company (Group) of China's H-shares by over 19 million shares, while Ping An Life continued to accumulate shares in China Life H-shares and China Pacific Insurance H-shares, among other insurance targets.
Behind this phenomenon lies the formation of an internal dividend circulation within the insurance industry. Compared to more volatile sectors like real estate or new energy, insurance stocks feature clear business models, stable dividends, ample liquidity, and large market capitalizations. Furthermore, insurance institutions possess a natural advantage in understanding peer business models and risk profiles, facilitating long-term value assessments. For life insurance funds, such assets can provide stable cash flows while allowing participation in valuation recovery during industry upswings, making them a significant direction for insurance fund equity allocation in recent years.
It is noteworthy that Ping An's management has previously publicly explained the logic behind its frequent stake disclosures. During an earnings conference, China Ping An's management stated that the core of the company's investment strategy is asset-liability matching, requiring the search for suitable assets based on long-term liability needs rather than merely pursuing short-term investment returns. From this perspective, Ping An's ongoing accumulation of China Life H-shares resembles a long-term strategic allocation decision rather than a short-term trading activity.
Against the backdrop of a low-interest-rate era, the focus of insurance fund equity investment is shifting from pursuing capital gains to seeking long-term, stable returns. As regulators continue to encourage medium- to long-term capital participation in the market, financial blue-chip stocks characterized by high dividends, low valuations, and asset-liability matching are still expected to remain a key direction for future insurance fund allocation increases.
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