Daily focus：New China Life（1336）
New China Life announced a positive earnings alert for the first three quarters of 2025. Based on preliminary estimates, the company expects net profit attributable to shareholders of the parent company to reach RMB 29.986 billion to RMB 34.122 billion, representing a 45% to 65% increase compared to the same period in 2024. This significant growth far exceeded market expectations, demonstrating the company's strong profitability and steady growth. Overall, New China Life's strong performance is primarily due to its successful asset allocation strategy, particularly its industry-leading investment returns amidst tailwinds in the equity market. While the earnings forecast exceeded expectations, market analysts also noted that the growth rate of its value of new business (VNB) may slow due to its shift toward engagement products and a high base. Nevertheless, this earnings forecast still provides positive signals for the insurance industry's third-quarter performance.
Escalating Sino-US trade tensions drove market volatility
The S&P 500 index fell slightly by 0.2% on Tuesday, closing at 6,644. While bank stocks generally outperformed expectations, stocks like BlackRock and JPMorgan Chase saw volatility due to revised earnings forecasts. The day's most closely watched issue was the renewed escalation of Sino-US trade tensions, with Trump threatening retaliatory tariffs on Chinese rare earth exports. Market concerns are rising costs in the technology and manufacturing supply chains, a move that could prompt companies to accelerate supply chain diversification and further restructure their global industrial landscape.
Hong Kong Stock Connect saw a net inflow of HK$8.6bn on Monday, with China Southern Hang Seng Technology (3033) receiving the largest inflow, HK$1.15bn, followed by Xiaomi (1810). Meanwhile, SMIC (0981) saw the largest net outflow, HK$960mn, followed by Alibaba (9988).
Hong Kong stocks were dragged down on Tuesday by escalating China-US trade tensions, with all three major indices falling. The Hang Seng Index fell 448 points, or 1.73%, to 25,441 points; the China Enterprises Index fell 143 points, or 1.55%, to 9,079 points; and the Hang Seng Tech Index suffered the biggest drop, falling 222 points, or 3.62%, to 5,923 points. Market turnover reached HK$398.9 billion. Technology stocks led the decline, with Hua Hong Semiconductor (1347) plunging 13.08% and SMIC (981) falling 8.48%, impacted by concerns about the semiconductor industry and Sino-US trade frictions. Alibaba (9988) fell 4.31%, Tencent (700) fell 2.82%, and SenseTime (20) fell 7%, with tech stocks generally under pressure. Mainland banking stocks bucked the market trend, becoming a safe haven. China Merchants Bank (3968) rose 4.7% and China Construction Bank (939) rose 2.3%. Investors turned to high-yield defensive stocks.
Source: KGI Investment Products and Solutions Department
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