NCI recently disclosed the progress of its external investments.
On May 22, 2025, NCI invested 10 billion yuan to subscribe for shares in the Guofeng Xinghua Honghu Zhiyuan Phase II Private Securities Investment Fund (hereinafter referred to as the &#34;Honghu Fund&#34;).
The Honghu Fund is a private product jointly established by NCI and China Life, with the fund management being handled by Guofeng Xinghua Private Equity, which is also a private platform established by the two insurance giants, focusing on secondary market investments.
Since its official launch in 2024, the Honghu Fund has become a new model for insurance capital to increase investments in Chinese stocks, breaking away from the previous methods of investing through premium product portfolios and direct investments using the insurance companies' own funds.
<h2>Signing of the Honghu Phase II Contract</h2>
According to the announcement, NCI signed the &#34;Guofeng Xinghua Honghu Zhiyuan Phase II Private Securities Investment Fund Contract&#34; with the fund manager Guofeng Xinghua and the fund custodian, Guangfa Bank Co., Ltd. Beijing Branch.
According to the fund contract, the established scale of the Phase II fund is 20 billion yuan, with our company investing 10 billion yuan to subscribe for shares in the private fund.
Combining with previous announcements, the subscriber for Phase II of the Honghu Fund, upon penetration, is NCI's subsidiary, Xinhua Asset Management Company, as well as Guoshou Asset Management Company under China Life.
The fund management fee rate is 0.10% per year, and the custody fee rate is 0.002% per year.
The latest announcement marks that the funds for Phase II of the Honghu Fund have been secured, and the &#34;entry into the market&#34; is imminent.
<h2>What Assets to Buy Upon &#34;Entering the Market&#34;</h2>
According to historical announcements from NCI, this insurance capital has previously revealed the investment direction for Phase II of the Honghu Fund:
<blockquote>
&#34;To obtain stable dividend income through low-frequency trading and long-term holding, enhance long-term investment returns, and achieve capital preservation and appreciation... Large listed companies with A+H shares that meet the criteria among the constituents of the CSI A500 Index. The target companies should have good corporate governance, stable operations, relatively stable dividends, good stock liquidity, and be compatible with the long-term investment needs of insurance capital.&#34;
</blockquote>
Additionally, according to the announcement, the duration of the private fund is 10 years, and after fulfilling the corresponding change procedures as stipulated in the fund contract, the duration of the private fund can be extended accordingly.
<h2>Collaboration of Insurance Giants</h2>
In the first quarter of 2024, the Honghu Fund was officially established, with the first phase having a scale of 50 billion yuan. China Life and NCI each contributed 50 billion yuan, with the investment direction focusing on high market capitalization, good liquidity, and high market influence quality listed companies.
In fact, large insurance companies are continuously promoting the reform of insurance capital investments.
On May 22, Guo Wuping, spokesperson for the Financial Regulatory Administration and Director of the Policy Research Department, stated at a press conference held by the State Council Information Office that the scale of the first batch of pilot reforms for long-term investment of insurance capital is 50 billion yuan, the second batch is 112 billion yuan, and a third batch of 60 billion yuan is also to be approved, with a total scale of 222 billion yuan

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Insurance companies join forces to enter the market

- On May 22, 2025, Xinhua Insurance announced a 10 billion yuan investment in the second phase of the Honghu Fund, a private securities investment fund co-established with China Life.  
- The fund, which focuses on secondary market investments, aims to enhance long-term returns through low-frequency trading and stable dividend yields from large A+H shares.  
- This investment marks a significant step in the ongoing reform of insurance capital investment, with the total scale of pilot projects reaching 2,220 billion yuan.

The second phase of Honghu funding has landed, NCI announced an investment of 10 billion yuan