Insurance investment in real estate may be difficult to achieve a few years ago, but will still maintain “hunting”
Editor’s note: This article is from WeChat public number: Locke Finance, (ID: lejucaijing) , author: Zeng Jia tree, authorized reprint
All along, the tentacles of insurance investment have frequently extended to housing companies. Although the current insurance has no “savage” attitude in the past few years, it still maintains a certain intensity for investment in the real estate sector. Recently, the three quarterly reports of housing companies that have been disclosed in succession have hidden the intrinsic dangers of insurance and capital.
As of now, among the more than 1,400 listed companies that have disclosed the third quarterly report of 2019, there are more than 130 companies among the top ten tradable shareholders. Among them, in addition to chemical, pharmaceutical, biological, computer, and other fields, the real estate industry is also among them.
From the current point of view, as the regulation encourages investment in insurance capital, the insurance company may increase the proportion of equity investment in the next investment process and increase the amount of funds entering the market. On the other hand, while maintaining the hot investment in real estate, the flow of insurance funds will also be extended to other fields.
Insurance in the quarterly report
Leju Finance statistics show that as of the end of the third quarter of this year, the shareholding ratio of insurance funds in Huaxia Happiness, Vanke A, OCT A, Poly Real Estate, Sunshine City, and Blu-ray Development of Public Housing Enterprises were 25.36%, respectively. 8.31%, 7.54%, 6.24%, 4.48%, 1.53%.
The numbers in this series are not fixed. All along, insurance funds continue to do “addition and subtraction” in the holding of shares, and gradually form the current shareholding status.
For example, after jiacang, PICC has been promoted to the new face of the top ten tradable shareholders of Blu-ray. The three quarterly reports of Blu-ray Development show that the two companies under PICC have respectively held 2,719,400 shares and 1,809,900 shares, with a shareholding ratio of 0.93% and 0.6%, respectively, ranking fifth and sixth among shareholders in circulation. .
In September, everyone’s life (previously Anbang) exchanged its 196 million shares of Vanke with ETF funds, and its directly held Vanke tradable shares were 485 million shares, accounting for 4.29 of Vanke’s total share capital. % (previously 6.02%). Through the reduction of the holdings, the total shareholding ratio of insurance funds in Vanke fell to 8.31%.
As time passed, Rongsheng’s development also showed the conversion of insurance shareholders. At present, the top ten tradable shareholders of the real estate enterprise have no more than Qianhai Life Insurance, while the new entrants are China PICC, which holds Rongsheng’s development of 115.64 million shares, or 0.4% of the shares.
Insurance in real estateThe market has sown a big net. The above list is only part of the situation reflected in the three quarterly reports, but it is just the tip of the iceberg of insurance investment. Since the beginning of this year, the largest amount of insurance funds have entered the market, and it is also necessary to count the trading orders of Huaxia Happiness and Jinmao.
On January 31 this year, Ping An’s Ping An Asset Management transferred RMB 170 million to Huaxia Happiness with a total of RMB 4.203 billion, becoming the second shareholder of Huaxia Happiness. On August 16, Huaxia transferred 100% equity of its subsidiary Beijing Wusheng Technology and its creditor price to 5.828 billion yuan to Ping An Life Insurance.
On July 26, China Jinmao entered into an agreement with Ping An and Xinhua Life Insurance respectively. Among them, Ping An Life was transferred to China Jinmao Co., Ltd. for a total of HK$8.597 billion in cash. Since then, Ping An Life has held It has a 15.22% stake in Jinmao and became its second largest shareholder.
Restoration of real estate investment boom
Over the years, after the pursuit of the field, the insurance companies have each won.
Among them, the original Anbang Insurance is the largest amount of insurance for participating in real estate enterprises. It holds equity in enterprises such as China Merchants Shekou, Vanke, China Construction, Ocean Shipping, Jindi, Poly, Shoukai and Financial Street. The China Life Group, China Ping An, Qianhai Life Insurance, Huaxia Life Insurance, Taikang Life Insurance, etc., also have their own housing business camp.
As insurance companies increase their premiums, their capital allocation needs continue to increase, prompting them to constantly seek “prey” for investment in the market. The real estate sector has always had high ROE, low volatility and other attributes, which has become an ideal investment target in the eyes of insurance.
For the real estate enterprises, in the context of tightening monetary policy and rising overseas financing costs, it is also an important way to seek survival and development by actively introducing insurance funds and broadening financing channels. It is precisely because of the demand of the two sides that it is close to the match, which has narrowed the cooperation distance between insurance and real estate enterprises.
Since this year, the regulator has repeatedly encouraged insurance funds to invest in the equity market as long-term funds on different occasions. Previously, the China Securities Regulatory Commission had clearly stated that it hopes that social security funds and insurance institutions will further increase the proportion of equity investment in assets and strengthen the strength of professional institutional investors.
The disclosure data of the China Insurance Regulatory Commission showed that the scale of investment in stocks and securities investment funds (ie equity assets) at the end of September was 2.24 trillion yuan, accounting for 12.59% of the balance of insurance capital utilization, compared with the new investment of 3157 at the end of 2018. Billion yuan, compared with the proportion of equity investment at the end of last year, increased by 1.24 percentage points.
From the perspective of position size, as of the end of the second quarter, the real estate sector was favored by the insurance industry, second only to the banking industry. At that time, the insurance capital held 6.388 billion shares in the real estate development industry with a market capitalization of 75.41 billion yuan. In the third quarter, some insurance funds continued the previous trend and added to the real estate sector.
But at the same time, the investment landscape with multiple perspectives on insurance is also unmistakable.
China Ping An recently mentioned in the quarterly report, “The company dynamically adjusts the allocation of equity assets.Proportion, and increase long-term equity investment, reduce the impact of fluctuations in the equity market.” The information disclosed here, that is, the logic of foreign investment in insurance, must first be based on low risk in the field, and then seek high returns.
From the three quarterly reports of many A-share companies, it can be seen that among the enterprises with heavy insurance positions, the chemical, pharmaceutical, and electronics industries account for a large proportion. The “investigation” indicators of the trend of investment in exploration have not been biased towards real estate.
There are data showing that in the third quarter of this year, insurance companies surveyed 164 A-share listed companies, of which electronics (and computers) were investigated by 30 companies, accounting for 30 companies. The average is 18%. However, there are only 3 housing companies surveyed.
Obviously, with the encouragement of insurance investment in insurance, the insurance companies are expected to further increase the proportion of equity investment and increase the amount of funds entering the market. However, the risk of real estate for real estate, even if there will be a certain degree of maintenance, it is difficult to achieve the grand scene a few years ago.
However, at the business level, insurance capital also needs to cooperate strategically with real estate companies, such as pension real estate, office properties, and long-term rental apartments. This is another important direction for cooperation between the two.