After a 5-year interval, insurance funds once again increase their stakes in brokerage stocks, with NCI taking action in Haitong Securities

After five years since China Life Group took a stake in Shenwan Hongyuan's H shares, the capital market has once again seen a case of insurance capital taking a stake in a brokerage.

On December 4th, NCI (601336.SH) disclosed that after increasing its holdings by 4 million shares on November 28th, its holdings in Haitong Securities (6837.HK) H shares have reached 5.02% of the circulating share capital, constituting a stake.

Before the increase, NCI held 3.29% and 1.61% of Haitong Securities H shares through NCI Asset and NCI Asset (Hong Kong) respectively; after the increase, NCI Asset's shareholding increased by another 0.12%, bringing NCI and its concerted parties' shareholding ratio to 5.02%.

After breaking the stake threshold, NCI continued to buy shares within three trading days, and as of December 3rd, its shareholding ratio had reached 5.72%.

Looking at the overall actions throughout the year, NCI has been quite "high-profile" in the capital market.

At the beginning of the year, NCI had already launched a 50 billion yuan scale Honghu private equity fund jointly initiated with China Life for investment.

According to Wind data, this fund has appeared in the top ten shareholders list of Yili Industrial Group and Shaanxi Coal and Chemical Industry's third-quarter report, with shareholding ratios of 1.88% and 0.72% respectively.

After the market warmed up at the end of the third quarter, NCI accelerated its frequency of increasing holdings, having previously taken stakes in China National Pharmaceutical Group and Shanghai Pharmaceuticals.

In terms of stock performance, Haitong Securities has risen for three consecutive trading days after being taken a stake, closing at HKD 7.1 per share on December 4th.

However, considering the future integration expectations between Guotai Junan (2611.HK) and Haitong Securities, NCI's increase in holdings may aim not only for long-term investment but also to maintain its board seat at Guotai Junan.

Since 2019, NCI and its two subsidiaries have continuously increased their holdings in Guotai Junan H shares to a total of 8.7%, successfully securing a seat on the board.

As of the end of the third quarter of 2024, Chen Yijiang, General Manager of NCI's Investment Department, still serves as a director of Guotai Junan.

However, whether NCI can retain its board seat after the restructuring of Guotai Junan and Haitong Securities remains uncertain.

Perhaps for this reason, NCI has repeatedly increased its holdings in Haitong Securities and Guotai Junan H shares throughout the year.

According to data from Hong Kong Stock Disclosure, NCI had increased its holdings by 160 million shares of Guotai Junan H shares on August 30th; after the increase, the shareholding ratio was approximately 4.75%