Core Viewpoint - The Hong Kong IPO market has seen significant participation from insurance institutions, with a total subscription amount nearing 30 billion HKD, surpassing last year's total [1][3]. Group 1: Participation and Investment Trends - As of October 14, 2023, seven insurance institutions have participated as cornerstone investors in seven Hong Kong IPOs, with a total subscription amount of approximately 29.32 billion HKD, a substantial increase from less than 10 billion HKD last year [3][4]. - Major players include Taikang Insurance, China Pacific Insurance, and others, with Taikang Insurance alone participating in five IPOs, investing over 14 billion HKD, accounting for nearly half of the total insurance investment in Hong Kong IPOs [3][4]. - The participation of insurance capital is driven by regulatory encouragement, a downward trend in long-term interest rates, and the need to enhance equity asset allocation to cover liability costs [3][4]. Group 2: Investment Focus and Selection Criteria - Insurance institutions are focusing on sectors such as hard technology and green industries, with a preference for companies that align with national strategies and demonstrate long-term growth potential [6][7]. - The selection criteria emphasize cash flow, industry position, and governance structure, with a preference for projects with a clear controlling shareholder, low foreign ownership, and quantifiable valuations (typically PE less than 20) [1][6]. - The investment strategy reflects a balance between certainty and growth, targeting companies with strong market positions and solid financial metrics [6][7]. Group 3: Market Performance and Valuation - The Hong Kong IPO market has raised approximately 182.9 billion HKD in the first nine months of 2023, marking a 229% increase year-on-year, with an average of 4-5 cornerstone investors per project [5]. - The performance of IPOs has been strong, with significant first-day gains, exemplified by Zijin Mining International, which saw a peak increase of 66% on its listing day [5][8]. - The valuation of Hong Kong stocks is generally lower than that of A-shares, providing a favorable investment opportunity for insurance capital [5].

Core Viewpoint - The financial management companies are actively seeking new paths for growth amid challenges of scarce quality assets and volatility in the bond market, particularly by participating in Hong Kong IPOs to enhance returns and innovate product structures [1][4]. Group 1: Participation in Hong Kong IPOs - Financial management companies, such as ICBC Wealth Management, have recently participated in IPOs like Sanhua Intelligent Control and IFBH, marking a significant move into the new consumption sector [1][2]. - In the first half of this year, the Hong Kong Stock Exchange completed 43 IPOs, raising a total of HKD 1,067.13 million, a 688.54% increase compared to the same period last year [2]. - The participation of financial management companies in IPOs allows them to enhance their equity investment capabilities and innovate product strategies, particularly through cornerstone investments [3][4]. Group 2: Product Innovation and Strategy - The cornerstone investor system, established in 2005, aims to address information asymmetry in new stock issuances by involving credible institutional investors [3]. - Financial management companies are developing products that combine fixed income with Hong Kong IPO investments, featuring characteristics such as a lock-up period and a dual-structure for returns [3][4]. - The "fixed income + Hong Kong IPO" strategy allows financial management companies to meet client needs for stability while gradually introducing them to equity assets, laying the groundwork for future pure equity products [4][5]. Group 3: Regulatory Support and Market Dynamics - Regulatory changes have facilitated the participation of financial management companies in the stock and primary markets, evolving from restrictions to encouragement [5][6]. - The implementation of policies supporting long-term capital market investments has allowed financial management companies to act as strategic investors in capital increases [6]. - The current low-interest environment has limited profit margins on fixed income assets, making Hong Kong IPO investments a viable alternative for financial management companies [4][5]. Group 4: Risk Management and Research Enhancement - Financial management companies must strengthen their research capabilities and risk management practices when participating in volatile IPO markets [7][8]. - It is essential for these companies to conduct thorough evaluations of industry cycles, business models, and valuation rationality to mitigate risks associated with high volatility [7][8]. - Establishing a comprehensive management mechanism for investment processes, including pre-investment, during investment, and post-investment phases, is crucial for effective risk control [8].