Guojin Securities: Continued boom on the insurance debt side suggests focusing on opportunities for undervalued brokerage firms to make up for gains under spring unrest

The Zhitong Finance App learned that Guojin Securities released a research report saying that the accelerated implementation of the digital yuan and the official implementation of the new fund sales fee reform regulations will help optimize the financial ecosystem and payment system. The securities sector suggests focusing on the recovery of undervalued brokerage firms, venture capital topics, and diversified financial opportunities; the insurance sector is limited by tax base changes, and high debt-side prosperity and asset-side stability are expected to drive valuation recovery, and are optimistic about the performance of leading insurers.

Guojin Securities's main views are as follows:

Securities sector

The People's Bank of China issued the “Action Plan on Further Strengthening the Digital Yuan Management Service System and Related Financial Infrastructure Construction”, which will be officially implemented on January 1, 2026. The “15th Five-Year Plan” mentions the steady development of the digital yuan. The digital yuan is expected to optimize the transmission efficiency of monetary policy and help the internationalization process of the RMB. The development of digital yuan and the broadening of application scenarios are also expected to bring payment-side opportunities and promising benefits for related industries and targets. On December 31, 2025, the China Securities Regulatory Commission revised and issued the “Regulations on the Administration of Sales Expenses of Publicly Raised Securities Investment Funds”, and the three-stage fee reform was officially implemented. In terms of redemption rates, the debt base is allowed to make differentiated agreements, which greatly reduces the pressure on short-term bonds to be redeemed. The overall direction of the new regulations is consistent with the draft for solicitation of comments, encouraging investors to hold for a long time, guiding consignment agencies to pay attention to the scale of holding, and improving the ecological optimization of the public fund industry in the long term.

Investment advice: It is recommended to focus on three main lines: (1) Continue to focus on the opportunities for undervalued brokerage firms to make up for growth in the spring market; strongly recommend high-quality brokerage firms with a high degree of mismatch in valuation and performance, focusing on Cathay Pacific Haitong; it is recommended to focus on brokerage firms with high AH premiums and mergers and acquisitions themes. (2) Sichuan Shuangma: The technology circuit dominates, and the venture capital business is expected to benefit, lay out new targets on the gene therapy circuit, and deepen the biomedical industry chain. The company manages the fund's investment projects: Yitang Co., Ltd., Xi'an Yicai, Mu Xi (listed on the Science and Technology Innovation Board), Yiswei Computing and Nuclear Technology (Hong Kong Stock Exchange IPO application), Bond Laser, Lihao Semiconductor, etc. have accelerated; the company's investment funds have already been invested: Fourier has completed a new round of financing, Chery Auto has been listed on the Hong Kong Stock Exchange, and the Guoyi Quantum Science and Technology Innovation Board IPO was accepted. (3) Diversified finance with impressive performance growth. It is recommended to focus on Yixin Group, Yuandong Hongxin, and Jiufang Smart Investment Holdings.

Insurance sector

High tax exemption income+no tax payment of TPL surplus and deferred income tax liabilities. It is expected that the tax base change will have little impact on the net profit and net assets of insurance companies. On December 26, the Ministry of Finance and the State Administration of Taxation issued the “Notice on Corporate Income Tax Handling Matters Relating to the Change of Insurance Contract Standards”, which requires insurance companies to pay taxes according to the new standards starting in 2026. Profit differences between the new and old standards for the period from the first implementation year to 2025 that have switched to the new standard are included in the 2026 taxable income or evenly included in each year for five years starting in 2026. When accounting for income tax expenses under the new standards, listed insurers have basically adjusted profits in accordance with the new standards, but the market is still concerned that some companies' deferred income tax liabilities are thin and the accrual is relatively insufficient. However, under the new accounting standards, although their profits have been large in the past two years, their taxable income is actually not high: first, insurance companies' interest rate bonds account for more than 70% of the bonds. In addition, dividends that have been held for 12 months are also exempt from tax; second, according to section 50 of the “Regulations on the Implementation of the Corporate Tax Law” There is no need to pay taxes before, so When calculating the taxable income of an insurance company, the fair value change profit and loss account shall be deducted. Considering the above two adjustments, it is estimated that the taxable income of insurance companies in 2024-2025 is low (poor market in 2023, poor profit performance, no need to worry about tax burdens). Calculation logic: It is conservatively assumed that 60% of the insurance company's interest income is tax-free income (tax-free dividends cannot be split; conservative estimates will not be considered), then the tax law standard taxable income = total profit - interest income* 60% - fair value change profit and loss. It is estimated that in 2024, with the exception of Sunshine Life Insurance's +1.3 billion, the taxable income of all insurers was negative; in the first three quarters of 2025, the taxable income of Taibao and Xinhua was negative, and China Life's taxable income was 11.3 billion yuan, which is relatively small.

Investment advice: The boom on the debt side brought about a shift in valuation. The continuation of the debt-side boom (banking insurance channels are expected to grow at a higher rate) and the restless spring market driving the asset side, and insurance companies' Q1 profit base is not high. In the long run, the debt side has entered an upward cycle of sharp increases in volume and price. In terms of volume, it has benefited from strong demand for deposit moving and pension savings, as well as an increase in the market share of leading companies; in terms of price, stock costs have begun to decline, and new insurance policies are beneficial. In a situation where the asset-side stock market and interest rates are stable or improving, debt-side growth brought about the expansion of major insurance companies is an important support for the strengthening of the current insurance market. The focus is on recommending leading insurers with good expectations for a good start and good business quality (low debt costs, better asset balance).

Risk warning: 1) equity market fluctuations; 2) sharp decline in long-term interest rates; 3) capital market reforms fall short of expectations.