Soochow Securities·2025-12-06 13:09Investment Rating - The industry investment rating is maintained as "Add" [1] Core Insights - Insurance funds' equity investments have significantly increased by 1.5 trillion yuan in the first three quarters of 2025, reaching a total of 5.59 trillion yuan, which is the highest proportion since 2014 at 15.5% [2] - The long-term outlook suggests that as the proportion of participating insurance and other floating income products increases, the risk appetite and equity allocation of insurance funds will also rise [2] - The valuation of the insurance sector remains low, with expected PEV ratios between 0.60-0.95 and PB ratios between 1.15-2.06 as of December 5, 2025, indicating significant upside potential [2] Summary by Sections Investment Strategy - The report emphasizes the need for insurance companies to enhance their long-term investment management capabilities, as guided by the new regulations from the China Banking and Insurance Regulatory Commission [5] - The new regulations aim to lower risk factors for long-term holdings, encouraging insurance companies to invest more in the stock market and support technology innovation [5][6] Market Conditions - The demand in the market remains strong, with expectations of continued optimization in liability costs due to the transformation of participating insurance products [2] - The ten-year government bond yield has risen to approximately 1.85%, which may alleviate pressure on the investment returns of fixed-income assets for insurance companies [2] Regulatory Changes - The new regulations include a reduction in risk factors for stocks held longer than three years, which is expected to encourage insurance companies to adopt a long-term holding strategy [5][6] - The adjustments in risk factors are designed to stabilize the market and promote the growth of patient capital [5]