Summary of Xinhua Insurance Conference Call Company Overview - **Company**: Xinhua Insurance - **Date**: December 16, 2025 Key Points Industry and Market Environment - Xinhua Insurance operates in a low-interest-rate environment with market uncertainties, focusing on stabilizing core earnings and controlling risks [2][3] - The company aims to achieve long-term stable excess returns in the equity market while actively seeking trading opportunities to enhance fixed income returns [2] Investment Strategy - The company will adjust its allocation to interest rate bonds based on factors such as the central rate of funds and asset maturity, increasing allocation during high rates and reducing it during low rates [2][5] - As of Q3 2025, Xinhua's equity holdings accounted for 21%, with domestic equities at 14% and foreign equities at 5%, showing slight growth due to structural adjustments [2][9] - The company has approximately 30 billion RMB in OCI-related stocks, focusing on high-dividend stocks with a yield of 4% or more [2][13] Duration Management - Xinhua has gradually reduced its duration gap, currently at an ideal state with asset duration around 10 years and liability duration between 13-14 years [2][6] - The company aims to maintain this duration gap without allowing it to widen, coordinating both asset and liability sides [6][8] Financial Performance and Projections - The investment performance in Q4 2025 is expected to align with company forecasts, despite challenges from low interest rates and market uncertainties [3][4] - The company anticipates a stable dividend policy, maintaining a payout ratio around 30%, contingent on operational performance and market conditions [20] Regulatory and Risk Factors - Xinhua is preparing to comply with the regulatory requirement for 30% of new premiums to enter the market, although specific guidelines are still awaited [10] - The recent adjustment of stock risk factors is not expected to significantly impact the company's solvency or stock allocation [11] Real Estate and Asset Exposure - The company holds over 20 billion RMB in real estate assets, with no current risk events reported regarding Vanke-related assets [16] - Xinhua has a dedicated team monitoring real estate dynamics, ensuring that asset repayments remain normal [16] Future Outlook - The company is cautious about the 2026 market outlook, recognizing potential pressures on profits and investment returns due to economic conditions and policy factors [19] - Xinhua plans to pursue steady and sustainable growth rather than aggressive expansion in 2026, with a focus on maintaining a healthy business plan [23] Product Development and Strategy - Xinhua is exploring the development of new health insurance products with dividend mechanisms to enhance customer appeal and meet regulatory guidelines [29][31] - The company aims to strengthen its bancassurance channel, collaborating with nearly 60 banks to enhance product competitiveness and customer engagement [30][32] Conclusion - Xinhua Insurance is strategically positioned to navigate the current low-interest-rate environment while focusing on risk management, investment performance, and product innovation to sustain growth and profitability in the coming years [2][3][19]