With the release of Q3 financial reports by listed companies, the investment trends of insurance funds have come to light. Data shows that by the end of Q3, insurance funds held significant positions in 732 listed companies, totaling approximately 101.13 billion shares—an increase of 12.025 billion shares compared to Q2. Notably, Agricultural Bank of China, Postal Savings Bank of China, Industrial and Commercial Bank of China, Hunan Valin Steel, Grandjoy Holdings, and Bank of Nanjing saw insurance funds increase holdings by over 100 million shares each.

According to Zhongtai Securities, the "slow bull" market in A-shares is expected to reshape insurers' equity investment strategies amid persistently low interest rates. Post-implementation of new accounting standards, rising stock holdings are gradually amplifying insurers' profit elasticity.

**Banks Remain Core Holdings; CHALCO and Goldwind Face Major Reductions** This year, insurance funds have been actively accumulating positions in the capital markets. After adding 4.924 billion shares in Q2, they further increased holdings by 12.025 billion shares in Q3, bringing total holdings above 100 billion shares. Excluding strategic stakes in China Life and Ping An Bank, banks, telecoms, and property stocks were favored.

Top holdings by insurance funds include China Minsheng Bank, SPD Bank, Agricultural Bank of China, Postal Savings Bank of China, China Zheshang Bank, Huaxia Bank, and Industrial Bank, alongside China Unicom, Beijing-Shanghai High-Speed Railway, and Gemdale. Major additions in Q3 also featured Zijin Mining and Bank of Changshu.

Banks, as mainstream dividend assets, remain central to insurers' portfolios, aligning with their demand for stable cash returns amid low interest rates. Under new accounting rules, dividend stocks can be classified as FVOCI (financial assets at fair value through other comprehensive income), helping mitigate investment volatility.

However, dividend stocks have seen significant gains in recent years, compressing yields. As of November 10, the Hang Seng Stock Connect Central SOEs Dividend Index surged 24.84% year-to-date, while the CSI Dividend Index rose 3.83%. In 2024, these indices climbed 30.89%, 12.31%, and 14.45%, respectively.

Huatai Securities notes that the average A-share dividend yield of China's "Big Four" banks dropped 1.7 percentage points to 4.5% in 2024, with H-shares falling 2.4 percentage points to 6.4%. The report warns that rising valuations heighten downside risks, while narrowing yields reduce appeal. Insurers must assess whether dividend stocks can sustain stable DPS (dividends per share) levels.

Opportunities for rapid accumulation of dividend stocks are dwindling. For insurers, gradual positioning—"picking ears of wheat"—may be prudent. Long-term, a 5%+ allocation to dividend stocks is ideal, leaving an under-allocation gap of ¥0.8–1.6 trillion.

**Notable Reductions in Q3** CHALCO and Goldwind saw insurance funds cut holdings by over 100 million shares each. Other reductions included CMOC, China Merchants Expressway, Shandong Publishing, Wanfeng Auto Wheel, Daqin Railway, and Hongda Co., reflecting divergent performance—some stocks outperformed the market, while others lagged, prompting profit-taking or portfolio adjustments.

**Q4 Survey Activity: Zoomlion and BeiGene in Focus** In Q4, insurers intensified company surveys. Since September, 118 insurers conducted 1,539 surveys covering 1,485 stocks, with strong interest in STAR Market and ChiNext listings. Ping An Pension led with 106 surveys, followed by China Life Pension, Taiping Pension, Changjiang Pension, PICC Pension, and Kunlun Health.

Zoomlion Heavy Industry emerged as a top pick for five insurers, including China Life, PICC, CPIC, New China Life, and Sino-Dutch Life. Its Q3 revenue rose 8.06% YoY to ¥37.156 billion, with net profit up 24.89% to ¥3.92 billion.

BeiGene, an innovative drug leader, attracted attention from four insurers, including ZhongAn Insurance, Sunshine Insurance, Ping An Life, and Soochow Life. Its Q3 revenue surged 44.2% YoY to ¥27.595 billion, surpassing 2023’s full-year figure of ¥27.21 billion, with net profit at ¥1.139 billion. Surveys focused on R&D progress and market competitiveness.

Other notable mentions include Jingsheng Mechanical & Electrical and Montage Technology, each surveyed by three insurers.

Looking ahead, low interest rates, regulatory support for long-term capital, and a recovering market suggest insurers may continue expanding equity exposure, injecting fresh liquidity into stocks.