Hong Kong stocks rally across the board, with policy level making its first systematic deployment of "strengthening patient capital." (513750), the only Hong Kong Stock Connect non-banking ETF in the market, surged over 3% during intraday trading, with the underlying index showing outstanding value at low valuation levels.

On the morning of March 17, 2026, the major Hong Kong stock indices opened higher collectively and maintained a volatile upward trend. Market risk appetite has rebounded, with active performance in sectors such as technology, innovative pharmaceuticals, and non-bank financials. Individual stocks showed a pattern of more gains than losses. Internationally, due to ongoing Middle East issues exceeding expectations, Hong Kong stocks have become a “safe haven.” Based on recent statements from Trump on social media and the postponement of his visit to China, there are no clear signs of short-term improvement in Middle East tensions.

At the policy level, the “14th Five-Year Plan” has systematically deployed efforts to “strengthen patient capital,” clearly improving policies to support medium- and long-term funds entering the market, and promoting insurance funds, pension funds, and other “long-term money” to accelerate market entry. Meanwhile, the China Securities Regulatory Commission held an expanded party committee meeting on March 13 to study and implement specific measures for capital market investment and financing reforms, focusing on new productive forces, mergers and acquisitions, and the introduction of medium- and long-term funds. Guosheng Securities believes that, through institutional arrangements, policies are continuously reinforcing the hub function of the capital market and enhancing the cross-cycle allocation of financial resources.

Regarding company performance, Sunshine Insurance announced its annual results for the year ending December 31, 2025, on March 16. The company’s total premium income was 150.72 billion yuan, up 17.4% year-over-year; insurance service income was 65.07 billion yuan, up 1.7%; net profit attributable to the parent was 6.31 billion yuan, up 15.7%. The company’s embedded value was 120.78 billion yuan, a 4.3% increase from the previous year-end. The comprehensive investment return rate was 6.1%. Market analysis suggests that Sunshine Property & Casualty maintained stable original insurance premium income, with a slight increase of 0.1% year-over-year. Overall, the company achieved steady growth across multiple business areas, especially in new business value.

CMB International Securities’ research report notes that the National Financial Regulatory Administration recently released key regulatory indicators for the insurance industry in Q4 2025. The total assets of the insurance industry have maintained over 10% growth for three consecutive years, with premium income increasing by 7.4% year-over-year, accelerating compared to 2024. Based on the overall industry situation and the operating results of some insurers in the first three quarters of 2025, it is expected that leading Hong Kong-listed insurers will continue to see high profit growth.

From a fundamental perspective, the insurance industry shows a sustained positive trend. The bancassurance channel is performing strongly, and with residents shifting savings, demand for dividend insurance remains robust, likely driving simultaneous growth in new business value and premium income. Long-term interest rates have remained near 1.8% for an extended period, and multiple thematic opportunities in equity markets are unfolding, which could improve investment returns and marginally ease the pressure from interest rate spreads. Huachuang Securities states that current sector valuations are still low, and short-term adjustments are mainly due to market sentiment and capital allocation preferences. The industry’s profit and debt resonance pattern remains unchanged, and future PEV (Price-to-Earnings Valuation) is expected to gradually return to a reasonable range.

Zhongtai Securities believes that since December last year, the insurance sector has experienced a cyclical pattern of “improved expectations for a strong start, rising long-term interest rates, and index gains strengthening profit resilience.” In the short term, capital pressure has eased; in the medium term, deposit shifts and a slow bull market continue to boost value and profit growth; in the long term, the cyclical trend is fulfilling expectations, moving away from concerns over interest rate spread losses. The path to restoring PEV to around 1x is becoming clearer.

In terms of on-market ETFs, as of 10:17 on March 17, 2026, the CSI Hong Kong Stock Connect Non-Bank Financials Thematic Index (931024) surged 2.90%, and the Hong Kong Stock Connect Non-Bank ETF (513750) rose 2.90%, with intraday gains exceeding 3%. The constituent stocks included Hongye Futures (+6.48%) and GF Securities (+5.94%). The top ten weighted stocks account for 83.24% of the ETF, with CITIC Securities (+6.39%) and New China Insurance (+5.52%) among them, along with China Taiping and China Life, which also gained.

From a valuation perspective, the latest PE (TTM) of the CSI Hong Kong Stock Connect Non-Bank Financials Thematic Index tracked by the ETF is only 7.93 times, placing it in the 19.43th percentile over the past two years—meaning its valuation is below 80.57% of the past two years, at a historic low.

The Hong Kong Stock Connect Non-Bank ETF (513750) is the first and only ETF tracking the Hong Kong stock non-bank financial index, not limited by QDII quotas. The insurance sector, the “second flag bearer” in the bull market, has the highest weighting at nearly 70%, making it the most insurance-heavy product in the market. The multi-finance sector accounts for 17.89%, with securities industry weight at 11.97%. The index samples up to 50 listed companies within the Hong Kong Stock Connect securities universe that meet the non-bank financial theme, reflecting the overall performance of non-bank financial listed companies within the scope. It is available through off-market linkage (Class A: 020500; Class C: 020501).