Stocks Approaching Threshold!

At the end of August and the beginning of September, the market experienced a rapid shift in trends, with many themes just showing their heads before sinking again.

However, some themes remained strong, including insurance stocks such as China People's Insurance Group and China Life Insurance, which continued to reach new yearly highs.

Additionally, some insurance funds have been actively buying in the market, like Great Wall Life Insurance, which increased its holdings after previously raising stakes in several companies.

Today, let's discuss the market opportunities for insurance stocks and the actions of insurance funds to increase their positions.

During this period, the market has seen a phenomenon where the index has been consolidating at lower levels, with large financials taking turns to drive the market.

After the banks and securities firms have had their turns and are now consolidating, insurance stocks, as part of the large financial sector, have been performing steadily.

Looking at stock performance, insurance stocks have been in a trend for some time, with recent gains being quite good, and they could be described as quietly rising.

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For instance, since August 15th (up to September 2nd), the insurance sector has risen by 12%, setting a new phase high.

There are not many insurance stocks, but they have all been moving up in recent days.

Let's start with small-cap stocks, like Tianmao Group, whose stock price has just started to rise, and has closed with two consecutive daily limit-ups on August 30th and September 2nd.

Among insurance stocks, the company is one of the few with a market value of around 10 billion yuan.

The actual controller of Tianmao Group is the well-known investor Liu Yiqian.

Another concept stock related to insurance has also seen a significant rise recently, Tianli Technology, with a market value of over 2 billion yuan, closed with a "20cm" daily limit-up on August 30th.

Tianli Technology is more often categorized in the internet industry, but its insurance product service business accounts for a significant proportion.

Other "big" insurance companies like China Life, China People's Insurance, and China Pacific have been following a "steady happiness" route, and their stock prices have also reached new highs.

For example, China Life closed at 34.17 yuan per share on September 2nd, with a total market value of over 960 billion yuan, setting a new high in nearly a year; China People's Insurance's stock price has also been steadily rising, with an increase of more than 20% since July, and the stock price has also reached a new high in nearly a year.

China Pacific's stock price has also recently rebounded with increased trading volume, and the stock price has also reached a new high in nearly a year, currently at the important neckline of 30 yuan per share.

In addition to the strength of insurance stocks, the performance of insurance companies may be one of the important stimulating factors.

Looking at the recently disclosed mid-year reports for 2024, except for some companies with declining performance, most companies have achieved growth in their mid-year reports.

For example, China Life achieved a net profit of 38.278 billion yuan in the first half of the year, a year-on-year increase of 10.58%; China People's Insurance achieved a net profit of 22.687 billion yuan in the first half of the year, a year-on-year increase of 14.11%; New China Life Insurance achieved a net profit of 11.083 billion yuan in half a year, a year-on-year increase of 11.07%... Statistics show that the five major listed insurance companies, China Pacific, China People's Insurance, New China Life Insurance, China Life, and Ping An Insurance, achieved a total net profit of 171.799 billion yuan in the first half of 2024, a year-on-year increase of 12.55%.

The growth in insurance company performance is related to factors such as the overall increase in investment returns.

It is also worth mentioning that most insurance stocks have introduced this year's mid-term dividend plans, such as New China Life Insurance's plan to distribute a dividend of 0.54 yuan per share for the mid-term, and China Life's plan to distribute a dividend of 0.20 yuan per share.

Behind the rise in insurance stock prices, insurance funds are also actively buying in the secondary market, such as Great Wall Life Insurance.

Great Wall Life Insurance has recently increased its holdings in Jiangnan Water Affairs.

According to the recent disclosure of Jiangnan Water Affairs, from May 18, 2024, to August 28, 2024, Great Wall Life Insurance increased its holdings by 9.3524 million shares, which accounted for 1% of the company's total share capital.

After this increase, Great Wall Life Insurance holds 56.1141 million shares of the company, increasing its shareholding ratio to 6%.

Not long ago, Great Wall Life Insurance had just completed the raising of stakes in Jiangnan Water Affairs.

In May of this year, Great Wall Life Insurance's holdings reached 46.7617 million shares, reaching the 5% stake line.

Jiangnan Water Affairs' main business is the production and sale of tap water, tap water drainage, and related water treatment business, and it belongs to the public utility sector, with overall stable performance growth.

In the first half of this year, the company achieved a profit of 170 million yuan, a year-on-year increase of 23.55%.

Looking back at the secondary market, Great Wall Life Insurance's layout is quite accurate, as it started to increase its holdings in Jiangnan Water Affairs from January this year, increasing by 6.872 million shares in January, and after the change, the shareholding ratio was 0.73%, and then continued to increase in February to May.

Jiangnan Water Affairs' stock price bottomed out in February this year, and then there was a V-shaped reversal.

From February 6th to May 20th, the company's stock price rose by 50%.

In addition to Jiangnan Water Affairs, Great Wall Life Insurance has also made the same moves on other stocks, such as Chengfa Environment and Ganyue Expressway.

Taking Chengfa Environment as an example, from May 17, 2024, to June 28, 2024, Great Wall Life Insurance increased its holdings in Chengfa Environment by 6.421 million shares, accounting for 1% of the company's total share capital.

After this increase, Great Wall Life Insurance held a total of 38.5253 million shares of Chengfa Environment, accounting for 6% of the total share capital.

In May of this year, Great Wall Life Insurance had already completed the raising of stakes in Chengfa Environment.

From these targets, we can see some of Great Wall Life Insurance's layout preferences, with Jiangnan Water Affairs, Chengfa Environment, and Ganyue Expressway belonging to the water supply, environmental protection, and expressway businesses, all of which are within the scope of public utilities.

In addition to the aforementioned companies, other companies that have been raised by Great Wall Life Insurance in the past year include Zhongyuan Expressway, Wuxi Bank, and Zhejiang Communications Science.

Recently, there have been many benefits to promote the active entry of long-term funds such as insurance funds into the market.

Against this background, we can see that Great Wall Life Insurance's actions to increase its holdings have been in a high-speed operation.

So the key point is, will Great Wall Life Insurance continue to buy?

Besides the aforementioned stocks that have been raised, what other layouts are there?

Let's talk about the key points.

Because the listed companies have just disclosed the semi-annual report for 2024.

The latest shareholder holdings in the second quarter have also been revealed one by one.

Many companies have Great Wall Life Insurance on the list of the top ten shareholders.

Data shows that as of the end of the second quarter of 2024, Great Wall Life Insurance appeared in the top ten shareholders of 15 stocks, with a total holding market value of more than 6 billion yuan.

In addition, there is also the holding data of Great Wall Life Insurance - individual insurance dividends, as of the end of the second quarter, it appeared in the top ten shareholders of Financial Street and Zhongyuan Expressway, with a total holding of 300 million yuan.

From the list of the top ten shareholders, Great Wall Life Insurance holds a relatively high proportion of many stocks, and some companies are close to the 5% stake line.

Further observation shows that as of the end of the second quarter, Great Wall Life Insurance's holdings in Chutian Expressway, Guangdong Construction, Shanghai Energy, Wuzhou Transportation, and Huaihe Energy accounted for a range of 3% to 4%.

It can be seen that in addition to the number of holdings in some stocks remaining unchanged, Great Wall Life Insurance has increased its holdings in most other stocks.

For example, Dongguan Holdings increased its holdings by 9.4374 million shares to 12.4374 million shares in the second quarter.

In addition, Great Wall Life Insurance also appeared in the top ten shareholders of many stocks with a new attitude, such as Wuzhou Transportation, Huaihe Energy, and Haohua Energy.

Taking Wuzhou Transportation as an example, as of the end of the second quarter, Great Wall Life Insurance became the third largest shareholder of the company with a holding of 48.3926 million shares, with a holding market value of 173 million yuan.

Wuzhou Transportation's main business is toll roads, from January to August, the company's stock price has gone through a slow bull market, and in the first half of this year, the company achieved a net profit of 353 million yuan, a year-on-year increase of 2.07%.

Summarizing the stocks held by Great Wall Life Insurance, they have some similar characteristics: First, they are biased towards public utilities.

As mentioned above, most of the stocks held by Great Wall Life Insurance are companies in the fields of highways, transportation, and environmental protection, and these companies have relatively smaller cyclical fluctuations.

Second, they favor dividends and high dividend yields.

For example, among the 15 stocks that appeared in the holdings in the second quarter, 14 have introduced dividends in 2023, and currently, 12 stocks have a dividend yield of more than 3%, such as Guangdong Construction at 4.7%.

Third, they have low valuations.

Among the 15 stocks, 13 have a price-earnings ratio of less than 20 times, such as Wuzhou Transportation at 8.24 times.

Fourth, they are mostly small-cap stocks.

As of September 2nd, among the 15 stocks held by Great Wall Life Insurance, 10 are below 10 billion.

Frequent increases and decisive actions to raise stakes, and the layout targets belong to relatively stable targets, the layout idea of Great Wall Life Insurance can be described as both "aggressive" and "conservative".