Core Viewpoint - The resignation of Li Guanying from the board of Shanghai Rural Commercial Bank has sparked speculation in the capital market regarding potential stock divestment by China Taiping Insurance, despite assurances that the resignation will not affect the bank's board operations [3][4][6]. Summary by Sections Announcement Details - On October 20, Shanghai Rural Commercial Bank announced the resignation of Li Guanying due to work reasons, confirming that this will not lower the board's membership below the legal requirement [3][4]. - Li Guanying is currently the Deputy General Manager and Financial Officer of Taiping Asset Management, which manages investments for China Taiping Insurance [4]. Market Speculation - The explanation regarding the "adjustment needs of insurance company accounting standards" has led to market speculation that this could indicate a reduction in China Taiping's stake in Shanghai Rural Commercial Bank [4][5]. - The new accounting standards, effective in early 2026, will require insurance companies to classify stocks they hold as FVOCI (Fair Value Through Other Comprehensive Income) if they meet certain criteria, including holding over 5% of shares or having board representation [4][5]. Accounting Implications - FVOCI assets allow for stock price fluctuations to be excluded from annual profit reports, enhancing profit stability for insurance companies. However, once classified as FVOCI, these stocks must be held long-term [5]. - With Li Guanying's departure, and given that China Taiping holds less than 5% of the bank's shares, there is speculation that the bank's stock may be reclassified to FVTPL (Fair Value Through Profit or Loss), allowing for easier divestment [5][6]. Future Actions and Dividends - Insiders suggest that the market may have misunderstood the implications of the accounting adjustments, indicating that China Taiping is unlikely to reduce its holdings in the near term [6]. - As a significant shareholder with a 4.3% stake, the future nomination of a new board member by China Taiping is of interest to the market [7]. - Shanghai Rural Commercial Bank has consistently provided substantial cash dividends, with a total of 41.66 billion yuan distributed in the 2024 fiscal year, representing 33.91% of its net profit, indicating a strong return on investment for shareholders [7].

Core Viewpoint - The insurance industry is increasingly adopting FVOCI accounting for high dividend stocks to stabilize profit reports and enhance long-term dividend income [1][3][6]. Group 1: FVOCI Accounting Adoption - FVOCI accounting allows insurance companies to measure financial assets at fair value without impacting current profit reports, thus reducing profit volatility [1][3]. - As of June 2023, major insurance companies have significantly increased their FVOCI equity asset holdings, with Xinhua Insurance's FVOCI equity assets rising from 30.64 billion to 37.47 billion yuan, and China Life's FVOCI stock holdings reaching 140.26 billion yuan, accounting for 22.6% of its total stock investments [1][3]. - The implementation of new accounting standards in 2026 is expected to further drive the allocation of insurance capital towards FVOCI stocks [1][3]. Group 2: High Dividend Stock Strategy - Insurance companies are focusing on high dividend stocks as a strategy to mitigate the impact of market fluctuations on profit volatility and to build a substantial pool of high dividend assets [2][6]. - The current market environment, characterized by declining interest rates, has prompted insurance companies to seek high dividend stocks to fill the income gap left by fixed-income assets [6][7]. - The trend of "long money short matching" in the insurance sector has led to a growing interest in high dividend stocks as a solution to duration mismatch risks [6][7]. Group 3: Investment Strategy Optimization - Insurance companies are refining their investment strategies to identify high dividend stocks through a bottom-up research approach, focusing on cash flow improvements and dividend intentions in niche industries [2][7]. - The need to find new investment targets is driven by the declining dividend yields of traditional high dividend stocks, prompting a search for growth-oriented technology stocks with high dividend potential [7][8]. - The classification of equity assets as FVOCI or FVTPL is becoming standardized among insurance companies, with a preference for long-term holdings that align with their core business [4][7]. Group 4: Dual-Edged Sword Effect - The increasing allocation of equity assets to FVOCI has created a "dual-edged sword" effect on insurance company profits, as significant unrealized gains are not reflected in profit statements [9][10]. - This shift allows for a more accurate assessment of the insurance companies' core business performance and enhances long-term investment confidence [9][10]. - The focus is shifting from short-term capital gains to the stability of stock prices and the potential for sustainable dividend income [10].