ZHONGTAI SECURITIES·2026-01-21 05:37Investment Rating - The report maintains an "Overweight" rating for the industry [1]. Core Insights - The current preset interest rate for ordinary life insurance products is 1.89%, a slight decrease from the previous value of 1.90%, indicating a narrowing decline in the preset interest rate research values over recent quarters [4]. - The report highlights that the long-end interest rates have stabilized since 2025, with a gradual upward trend established in the second half of 2025, suggesting a positive outlook for the industry [4]. - The report emphasizes the implementation of a dynamic adjustment mechanism linking preset interest rates to market rates, which is expected to guide companies in prudent pricing and asset-liability management [4]. - The likelihood of a "buy-stop" season in 2026 is considered low, as the preset interest rate research value is close to the maximum allowable rate for current products, making significant adjustments unlikely [4]. Summary by Sections Industry Overview - The report notes that the preset interest rate research values have shown a decreasing trend, with recent declines of 21bps, 14bps, 9bps, and 1bps, indicating a gradual stabilization [3]. - The financial regulatory authority has issued guidelines to link preset interest rates with market rates, which is expected to enhance the industry's pricing strategies [4]. Market Trends - The report indicates that the 5-year LPR remains at 3.5%, the 5-year fixed deposit benchmark rate at 1.3%, and the 10-year government bond yield at 1.85%, all showing stability compared to the previous quarter [4]. - The report suggests that the insurance sector has experienced a positive cyclical recovery since December of the previous year, with expectations for improved performance and valuation recovery [4]. Investment Recommendations - The report recommends continued attention to key players in the insurance sector, including China Life, China Pacific Insurance, Ping An Insurance, New China Life, China Property & Casualty Insurance, and AIA Group, as they are expected to benefit from the anticipated market conditions [4].