PING AN OF CHINA(HK:02318) Mei Ri Jing Ji Xin Wen·2025-11-20 12:04Core Viewpoint - The issuance of bonds by insurance companies remains at historically high levels, with perpetual bonds accounting for nearly 70% of the total issuance in 2025, driven by the need for capital supplementation to meet regulatory requirements and enhance risk resilience [1][2][6]. Group 1: Bond Issuance Trends - As of November 2025, 19 insurance companies have successfully issued capital supplementary bonds or perpetual bonds, totaling 741.7 billion yuan, which is a decrease compared to the previous two years but still at a historical high [1][6]. - The trend shows a preference for perpetual bonds, with 10 issued totaling approximately 500 billion yuan, representing nearly 70% of the total issuance [1][3]. - Major issuers of perpetual bonds include large life insurance companies and bank-affiliated insurers, as these bonds are more favorable for long-term capital needs [4][5]. Group 2: Capital Supplementation Needs - The need for continuous capital supplementation is a common requirement in the industry, as increasing shareholder contributions is challenging, leading to a reliance on various channels for capital [2][6]. - The overall trend in bond issuance is characterized by a decrease in total volume but a high level of issuance, with a structural shift towards perpetual bonds [2][6]. Group 3: Financial Performance and Regulatory Compliance - The solvency pressure has eased in 2025, resulting in a decrease in large bond issuances compared to 2024, where several companies issued bonds exceeding 100 billion yuan [6][7]. - As of the end of Q3 2025, the comprehensive solvency adequacy ratio for the insurance industry was 186.3%, with a core solvency adequacy ratio of 134.3%, indicating a decline from the end of 2024 [7]. - The issuance of bonds has been beneficial in alleviating short-term capital pressures and providing necessary financial buffers for strategic adjustments and business upgrades [5][6]. Group 4: Financing Costs and Market Conditions - The current relatively loose interest rate environment has led to a decrease in financing costs for insurance companies, with bond issuance rates ranging from 2.15% to 2.8% [8][9]. - The trend of declining issuance rates indicates a favorable market liquidity and high investor confidence in the credit quality of insurance companies, facilitating low-cost financing [8][9]. - Companies are adopting a strategy of issuing low-cost new bonds to replace or repay existing higher-rate debts, thereby optimizing their financial structure [8][9].