2 1 Shi Ji Jing Ji Bao Dao·2025-08-14 08:53Core Viewpoint - The recent acquisition by China Ping An of China Pacific Insurance's H-shares marks a rare instance of an insurance company acquiring another insurance company, highlighting a shift in investment strategies within the insurance sector [2][12]. Group 1: Acquisition Details - China Ping An increased its stake in China Pacific Insurance by approximately 1.74 million shares, reaching a total holding of about 5.04% of the H-share capital, thus triggering the "lifting the stake" threshold [2][7]. - The acquisition was executed at a price of HKD 32.07 per share, amounting to a total investment of approximately HKD 55.84 million [7]. Group 2: Market Reaction - Following the announcement, China Pacific Insurance's A-shares rose nearly 6%, while its H-shares increased by almost 7% [2]. - The insurance sector index also saw a strong performance, with an increase of over 3% in both the A-share and Hong Kong markets [2]. Group 3: Industry Context - The insurance industry has witnessed a new wave of acquisitions, with over 20 instances of stake increases this year alone, surpassing the total for the previous year [8]. - Historically, acquisitions of insurance stocks by insurance companies have been infrequent, with the last notable instance occurring six years ago when China Life increased its stake in China Pacific Insurance [12][13]. Group 4: Strategic Considerations - The rationale behind this acquisition includes a need for asset allocation rebalancing, a reassessment of value during the insurance industry's transformation, and a dual drive from policy and market conditions [12][14]. - China Pacific Insurance is viewed as an attractive target due to its high dividend yield and potential for valuation recovery, especially in the context of low interest rates and an "asset shortage" environment [9][10]. Group 5: Financial Performance - China Pacific Insurance is projected to see a 65% year-on-year increase in net profit for 2024, with total managed assets reaching CNY 3.5 trillion and original insurance business income of CNY 282.01 billion in the first half of the year [10]. - The company has a strong dividend appeal, with a projected dividend of CNY 1.08 per share for 2024, totaling CNY 10.39 billion in cash dividends [10].