Group 1 - The insurance stocks collectively declined, with notable drops in shares of major companies such as Xinhua Insurance down 5.81% to 43.8 HKD, China Pacific Insurance down 4.7% to 31.26 HKD, China Life down 3.23% to 22.18 HKD, and China People’s Insurance down 3.67% to 6.83 HKD [1] - China Pacific Insurance announced plans to issue zero-coupon convertible bonds maturing in 2030, aiming to raise approximately 15.56 billion HKD, which could convert into 398 million shares, representing 14.36% of existing H-shares and 4.14% of total issued capital if fully converted at an initial conversion price of 39.04 HKD per share [1] - Recent performance of the insurance sector has been relatively weak, attributed to the high base of investment returns, leading to pressure on third-quarter earnings reports [1] Group 2 - The long-term interest rate bottoming out and the increase in OCI equity allocation are expected to enhance investment efficiency, while the reduction in preset interest rates and the integration of premium and claims are driving down costs [1] - The ongoing process of interest margin recovery is viewed as a significant theme, indicating that the insurance sector, particularly undervalued Hong Kong insurance stocks, presents good investment opportunities [1]

Group 1 - The insurance stocks collectively declined, with notable drops including New China Life Insurance down 5.81% to HKD 43.8, China Pacific Insurance down 4.7% to HKD 31.26, China Life Insurance down 3.23% to HKD 22.18, and China People's Insurance down 3.67% to HKD 6.83 [1] - China Pacific Insurance announced plans to issue zero-coupon convertible bonds maturing in 2030, aiming to raise approximately HKD 15.556 billion. If fully converted at an initial conversion price of HKD 39.04 per share, the bonds could convert into 398 million shares, representing 14.36% of the existing H-shares and 4.14% of the total issued share capital [1] - Recent performance of the insurance sector has been relatively weak, attributed to the significant increase in the investment base, leading to pressure on the third-quarter earnings reports [1] Group 2 - The long-term value reassessment logic in the insurance sector is still in progress, driven by a combination of bottoming long-term interest rates and increased allocation to OCI equities enhancing investment efficiency, alongside a reduction in liability costs due to lower preset interest rates [1] - The ongoing repair of interest spreads is viewed as a process that is still underway rather than completed, indicating potential for recovery in the insurance sector, particularly for undervalued Hong Kong insurance stocks [1]

Core Viewpoint - China Pacific Insurance (601601.SH, 02601.HK) announced the issuance of zero-coupon convertible bonds denominated in Hong Kong dollars, maturing in 2030, with a total financing scale of HKD 15.556 billion, marking the largest issuance of its kind in history and the largest overseas refinancing project for financial institutions in the Asia-Pacific region since 2025 [1][2] Group 1 - The issuance of the H-share convertible bonds achieved a subscription rate of over 70% from long-term investors, with a conversion premium rate of 25% [1] - The funds raised will primarily support the company's insurance business and its three strategic developments: "Great Health, Artificial Intelligence+, and Internationalization," as well as supplement working capital for general corporate purposes [1] - The issuance is expected to enhance the company's sustainable capital supply capability, improve capital efficiency, and strengthen market value management, contributing to high-quality development [1] Group 2 - The initial conversion price for the convertible bonds is set at HKD 39.04 per share, which could lead to the conversion of approximately 398 million shares, representing about 12.55% of the expanded H-share capital and 3.98% of the total issued share capital [2] - Issuing zero-coupon convertible bonds allows the issuer to lower financing costs while providing flexibility between equity and debt, with dilution occurring only when investors exercise their conversion rights [2] - Other large domestic and foreign insurance companies are also opting for zero-coupon convertible bonds in a low-interest-rate environment, as seen with China Ping An (601318.SH, 02318.HK), which issued HKD 11.765 billion in similar bonds earlier this year [2]