Dajia Life, which acquired the equity of Anbang Life Insurance, continues to "slim down" the original Anbang assets. Financial Street, once crazily "pursued" by the Anbang system, has once again been reduced by Dajia Life. In addition to the 3.99% reduction in 2021, Dajia Life's reduction of Financial Street's equity ratio has just reached 5%.

Dajia Life once again reduces its former "old love".

On April 7, Financial Street announced that its third-largest shareholder, Dajia Life, had reduced its stake in the company by approximately 30.133 million shares through centralized bidding, accounting for 1.01% of the total share capital, and its shareholding ratio has decreased to 9.1%.

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It is understood that the origin of Financial Street and Dajia Life cannot be separated from the once glorious "Anbang system". After 2014, the predecessor of Dajia Life, Anbang Life Insurance, and its concerted action persons have repeatedly increased their stake in Financial Street. In just over a year, they have raised their stake six times, and their shareholding ratio has also jumped to 29.98%, which is "one step away" from gaining control.

However, with the burst of the bubble, Anbang Life Insurance also ushered in the end, and Dajia Life, which took over its "bloated" assets, also began the road to "slimming down".

In addition to Financial Street, since 2019, Dajia Life has begun to successively reduce its holdings in companies such as China Construction, Vanke A, China Merchants Bank, Eurasia Group, and Tong Ren Tang. Among them, Dajia Life's stake in Gemdale Group has once dropped from 20% to 0.97%.

Reduce Financial Street by 30 million shares

When the real estate industry is constantly in turmoil, insurance capital that has frequently invested in real estate companies is gradually "withdrawing" from it.

Recently, Financial Street, which mainly develops and operates commercial real estate, has been reduced by shareholders. According to the announcement issued by Financial Street, from March 19, 2024, to April 2, 2024, the company's third-largest shareholder, Dajia Life Insurance Co., Ltd. (hereinafter referred to as "Dajia Life"), reduced approximately 30.133 million shares through centralized bidding, accounting for about 1.01% of the total share capital.

In fact, as early as 2021, Dajia Life had reduced its stake in Financial Street by approximately 119 million shares through centralized bidding and block trading, accounting for 3.99% of Financial Street's total share capital. With this reduction, Dajia Life's reduction of Financial Street's equity ratio has just reached 5%. After this reduction, Dajia Life's shareholding ratio has decreased to 9.10%.Interestingly, the reduction of financial street equity by Dajia Life Insurance is not an isolated case for insurance funds. Over the past 20 years, the real estate industry has been a favored investment area for insurance funds. Various insurance funds have flocked into the real estate market through joint land acquisition with developers, strategic investment in real estate projects, and increasing stakes in listed real estate companies. Taking Financial Street as an example, insurance funds such as Fubon Life Insurance, China People's Insurance, and Pacific Life Insurance have all been among the top ten shareholders.

However, with the real estate industry entering a downcycle and stricter regulation of insurance funds, the once coveted "hot cakes" have now become "hot potatoes."

In addition to Dajia Life Insurance, other insurance funds are also reducing their real estate holdings. In 2023 alone, multiple insurance company accounts have reduced their holdings in real estate stocks such as Poly Development, Country Garden, Vanke A, China Merchants Shekou, and Gemdale Group, with some insurance companies completely clearing their real estate stocks.

Although real estate stocks are still at a low point, among the insurance companies that have reduced their holdings and exited, the majority have achieved investment gains. For instance, when Taikang Life Insurance reduced its holdings in Poly Development, it invested in Poly Development in 2016 at a share price of about 8.19 yuan per share. Based on last year's reduction price, Taikang Life Insurance can still achieve a capital gain of about 475 million yuan.

However, Dajia Life Insurance's reduction of Financial Street may be a loss-making deal. It is understood that when Dajia Life Insurance first entered Financial Street, its share price was above 4.5 yuan per share. With several subsequent increases, Dajia Life Insurance's holding cost should be higher than 4.5 yuan per share, while the price of this reduction is around 3 yuan.

Crazy bidding

In fact, among the insurance funds reducing their real estate holdings, the "love and hate" between Dajia Life Insurance and Financial Street is particularly special.

When talking about this past event, the indispensable role is the predecessor of Dajia Life Insurance, Anbang Life Insurance, and its "Anbang system" behind it. With the geometric growth of universal insurance, the scale of Anbang Life Insurance's funds has become increasingly large, and its capital operations have become more fierce. In the quarter before bidding for Financial Street, the "Anbang system" had already spent nearly 20 billion yuan on bidding.

In the process of bidding, the "Anbang system" also achieved excess returns. Looking at the bidding targets, it prefers listed companies with low controlling shareholder holding ratios. Taking Gemdale Group as an example, in the process of competing with Fude Life Insurance for the control of Gemdale Group, both parties raised the stock price through bidding, and Anbang Life Insurance achieved higher investment returns.

Anbang Life Insurance, which has tasted the sweetness, also set its sights on Financial Street.Before Anbang's "knocking on the door," the top ten shareholders of Financial Street collectively held 35.83% of the company's equity. Among them, the controlling shareholder, Beijing Financial Street Investment Co., Ltd. (hereinafter referred to as "Financial Street Investment"), held only 26.57% of the company's equity. The second-largest shareholder, China Pacific Life Insurance Co., Ltd.'s capital account, held a mere 2.88% of the shares, indicating a highly dispersed ownership structure.

In 2014, the "Anbang Group" made its first move to purchase Financial Street. At that time, Harmony Health Insurance Co., Ltd. (hereinafter referred to as "Harmony Health"), as a subsidiary of the "Anbang Group," used universal insurance funds to buy 32.19 million shares in the market during the first quarter, becoming the third-largest shareholder of Financial Street. After four subsequent increases in holdings, Harmony Health's share count rose to 475 million, and its shareholding ratio reached 15.89%.

At the same time, the predecessor of Dazhong Life, Anbang Life, also appeared among the top ten shareholders of Financial Street in the second quarter of 2014. After four subsequent increases in holdings, Anbang Life's shareholding ratio also rose to 14.11%.

According to statistics, since 2014, the Anbang Group, as the "barbarian at the gate," has completed six rounds of shareholding increases in Financial Street, raising its shareholding ratio to 29.98%, just one step away from Financial Street Group and its concerted action partners.

Faced with the relentless pressure from the Anbang Group, the controlling shareholder, Financial Street Investment, has also been continuously increasing its company's equity to build a "firewall." Starting from the third quarter of 2015, Financial Street Investment increased its holdings for three consecutive quarters, raising its shareholding ratio to 28.90%, and later further increased it to 31.15%.

At the same time, the intense battle for equity has also driven up the stock price of Financial Street. During this period, the stock price of Financial Street rose from a minimum of 4.5 yuan to a maximum of 15.55 yuan, more than doubling.

Perhaps benefiting from the stock price surge after multiple rounds of shareholding increases, in 2014, Anbang Life achieved an investment income of 13.687 billion yuan, a year-on-year increase of 19.86 times. On such a high base, Anbang Life's investment income in 2015 still achieved a doubling growth, reaching 28.79 billion yuan.

However, accompanying the surge in income is the continuous accumulation of risks. Under the operation of extremely high leverage, Anbang Life, which once aggressively expanded in the capital market, also embarked on the path of dissolution and liquidation.

Dazhong Life "Slims Down"

In July 2019, the unveiling of Dazhong Insurance Group marked the official end of the "Anbang Group."It is understood that the originally "bloated" Anbang has been divided into "good assets" and "bad assets" for disposal. Approximately 700 billion yuan of "good assets" correspond to the transfer to Dajia Pension, Dajia Asset Management, and Dajia Life, among which, Dajia Life took over the assets and business of Anbang Life, embarking on a journey of reshaping.

In terms of assets, Dajia Life began to continuously "slim down", successively reducing holdings in listed companies such as Vanke A, Dalian Share, Eurasia Group, and Tong Ren Tang, recouping funds exceeding 20 billion yuan.

Regarding China Construction, Dajia Life repeatedly reduced its holdings through ETF exchange from September 2019 to June 2020, with its shareholding ratio successively falling below 10% and 5%, accumulating a reduction of 2.546 billion shares, and cashing out about 14 billion yuan.

In business, Dajia Life transformed the insurance products it sold from the short-term lump-sum universal insurance to relatively long-term periodic payments with guaranteed value insurance.

Data shows that by the end of 2019, the scale of life insurance products with a guarantee period of 5 years and above in Dajia Life increased to more than 75%, significantly improving the liability structure of the original Anbang Life, which was mainly focused on medium and short-term products.

In addition, regarding the issue of relying solely on the bank insurance channel, Dajia Life explored the independent agent model. From the limited disclosed data, as of December 2023, Dajia Life's individual insurance channel achieved a periodic premium of 1.25 billion yuan, with a monthly per capita periodic production capacity of 78,000 yuan, and more than 700 people achieved the annual MDRT standard, doubling the previous year.

In addition to the transformation in assets and business, Dajia Insurance also "started anew" on the investment side. After exiting the aforementioned stocks, Dajia Life newly entered companies such as Chuanyi Technology, Xin Dazheng, and Hua Ya Intelligence. As of now, it has appeared in the top ten shareholders of 41 A-share listed companies, most of which are high-tech industries such as semiconductors and biotechnology.

In the real estate investment field, the current Dajia Life is more inclined to directly hold "real rights" assets, the most well-known of which is the continuous acquisition of 4 Wanda Plaza assets.

In May 2023, Dajia Life took over three projects from Dalian Wanda Commercial Management: Shanghai Songjiang Wanda Plaza, Jiangmen Taishan Wanda Plaza, and Qinghai Xining Wanda Plaza. Following that in October, it once again took over Shanghai Wanda Plaza Real Estate Co., Ltd. At that time, Wanda was in a period of multiple events, and Dajia Life also gained a lot of attention for taking over 4 Wanda Plazas to help Wang Jianlin out of trouble.

In addition, in the field of health and elderly care, which is most closely related to the main business of insurance, as of the end of 2023, Dajia Life has laid out 14 urban medical and elderly care communities, 6 travel and health care communities, and 4 home-based elderly care centers nationwide. In March last year, Dajia Life established its first health and elderly care private equity investment fund, with a fund size of 5 billion yuan.