On June 4th, Xinhua Asset Management Co., Ltd. (Xinhua Asset) disclosed two related – party transaction announcements. On May 27th and 28th, the company used entrusted funds from shareholder New China Life Insurance to purchase shares of Hangzhou Bank Co., Ltd. in two installments, amounting to 13.2856 million yuan and 84.905317 million yuan respectively. The transaction prices were 16.01 yuan per share and 16.42 yuan per share respectively.
Becoming a Major Shareholder
In April 2025, New China Life Insurance acquired 5.45% of Hangzhou Bank’s shares from Commonwealth Bank of Australia through an agreement transfer for approximately 4.3166 billion yuan, at a price of 13.095 yuan per share. Before the equity change, New China Life Insurance already held 4.6551 million “Hangzhou Bank Convertible Bonds.” After combining the transferred shares with existing holdings, New China Life Insurance’s shareholding ratio in Hangzhou Bank rose to 5.87%, making it the fourth – largest shareholder.
Price Trends and Investment Gains
As of June 4th, Hangzhou Bank’s share price closed at 16.87 yuan, marking a 28.8% increase from the transfer price of 13.095 yuan per share. This significant rise highlights New China Life Insurance’s precise investment vision. However, New China Life Insurance had previously sold Hangzhou Bank Convertible Bonds in February 2025 at an average price of around 129.5 yuan per bond, totaling approximately 546 million yuan. By June 4th, the convertible bond’s price had risen to 148.505 yuan per bond, a 14% increase from the February selling price. This suggests that New China Life Insurance may have missed out on over 78 million yuan in potential gains from this round of share reduction.
Strategic Considerations
New China Life Insurance’s equity investment in Hangzhou Bank is not merely a short – term arbitrage act but reflects deeper strategic considerations. The company values the long – term potential of opening up the bank – insurance channel through equity ties. Hangzhou Bank’s over 200 branches in the Yangtze River Delta region provide significant synergy with New China Life Insurance’s operations, offering broad prospects for in – depth cooperation.
Performance and Growth
New China Life Insurance delivered strong performance in the first quarter of 2025, with operating revenue reaching 33.402 billion yuan, a year – on – year increase of 26.1%. Net profit reached 5.882 billion yuan, up 19% year – on – year. The value of new business increased by 67.9% year – on – year, and original insurance premium income reached 73.218 billion yuan, up 28.0% year – on – year. The bancassurance channel contributed significantly, with premium income reaching 26.889 billion yuan, a 69.4% year – on – year increase.
Transformation of the Bancassurance Channel
Under the regulatory framework of “integration of reporting and operation,” the bancassurance channel is undergoing a profound transformation. Insurance companies are reshaping the bank – insurance cooperation ecosystem through a refined strategy of “one policy for each bank.” New China Life Insurance’s investment in Hangzhou Bank is a microcosm of this trend, with insurance funds deeply binding to bank resources through equity ties to promote the increase of regular payment business and optimize the value rate of new business.
Future Outlook
With the support of equity cooperation, New China Life Insurance is expected to further enhance the synergy between banks and insurance companies. This will promote the transformation of its channels from “scale contribution” to “value – driven,” focusing on long – term value products such as regular payment business and pension finance. The over 200 branches of Hangzhou Bank in the Yangtze River Delta region will serve as important fulcrums for the operation of high – net – worth clients, supporting New China Life Insurance’s strategic goals.
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