Hongkang Life Insurance, which aggressively purchased H-shares of Bank of Zhengzhou Co., Ltd. at elevated prices six months ago, has now started reducing its stake. Since the second half of last year, Bank of Zhengzhou's stock price has continued to fall, coupled with extremely low dividend payouts, raising questions about whether Hongkang Life can no longer sustain its position.

After buying heavily at high levels just six months prior and even increasing its holdings four months ago, the insurer has now begun selling. This short-term trading activity by insurance capital, typically considered long-term investment, is difficult to comprehend.

Over the past six months, Bank of Zhengzhou's share price has dropped more than 20%, and with minimal dividends, speculation arises that Hongkang Life may be cutting its losses.

Short-Term Moves by Long-Term Capital On January 29, the Hong Kong Stock Exchange disclosed that Hongkang Life reduced its holdings of Bank of Zhengzhou H-shares by 12.17 million shares, lowering its stake from 21.16% to 20.56%. Earlier, on January 21, the insurer sold 1 million shares.

However, on September 22 and September 30, 2025, Hongkang Life had been increasing its holdings, purchasing 4.504 million and 11 million H-shares, respectively.

The decision to sell just four months after buying puzzles market observers, given insurance capital's reputation for long-term investment strategies.

On June 27, 2025, Hongkang Life bought 16 million H-shares of Bank of Zhengzhou at HK$1.2068 per share, spending HK$19.3088 million. This raised its stake from 4.75% to 5.55%, triggering a disclosure requirement for the first time.

According to exchange data, the average selling price on January 29 was HK$1.359 per share, while Bank of Zhengzhou opened at HK$1.13 that day, with a high of HK$1.15.

On January 21, the insurer sold 1 million shares at an average price of HK$1.3, against an opening price of HK$1.13 and a high of HK$1.14.

In both instances, the disposal prices exceeded the day's market rates, suggesting off-exchange transactions with buyers willing to pay a premium.

Attraction to a Dividend Miser Bank of Zhengzhou is widely known in capital markets for its reluctance to pay dividends. From 2020 to 2023, it distributed no dividends for four consecutive years, prompting the China Securities Investor Services Center to issue a shareholder inquiry letter demanding justification for the lack of cash payouts and plans to improve investor returns.

In 2024, the bank finally decided to distribute a dividend, offering RMB 0.20 per share before tax. Total cash dividends amounted to RMB 182 million, representing 9.69% of net profit attributable to shareholders—the lowest among 42 A-share listed banks.

That year, the second-lowest payer, Suzhou Rural Commercial Bank, had a dividend payout ratio of 16.98%, while Zijin Rural Commercial Bank ranked third-lowest at 22.55%.

During the mid-term of 2025, while many banks announced interim dividends, Bank of Zhengzhou explicitly stated it would not distribute one.

Currently, the bank's dividend yield stands at just 1.04%, well below the industry average.

Buying at the Peak In July 2025, Bank of Zhengzhou shares reached a high of HK$1.48. After a month of consolidation at elevated levels, the price began a sustained decline.

This period coincided with Hongkang Life’s aggressive buying spree, with exchange data showing average transaction prices between HK$1.3 and HK$1.4.

It appears Hongkang Life entered the market near its peak.

Currently, Bank of Zhengzhou’s share price has fallen to HK$1.12, down more than 24% from its high.

This significant decline, combined with meager dividends, may have pressured Hongkang Life to begin exiting its position.

New Leadership at Bank of Zhengzhou Established in 1996, Bank of Zhengzhou listed on the Hong Kong Stock Exchange in 2015 and the Shenzhen Stock Exchange in 2018, becoming the first A-share listed bank in Henan Province and the first Chinese city commercial bank with dual A+H listings.

In November 2024, the bank welcomed its first female president, Li Hong, previously with Postal Savings Bank of China’s Beijing branch. Subsequently, the bank’s management underwent a major reshuffle.

In January 2025, Assistant President Li Hong (a namesake of the new president) and Vice President Fu Chunqiao resigned for work-related reasons.

In February, Assistant President Liu Jiuqing resigned for personal reasons.

In March, Vice President Guo Zhibin stepped down citing health issues.

Also in March, Assistant President Li Lei and Vice President Sun Haigang resigned successively, both citing job adjustments.

Such frequent high-level departures within a short period are rare.

According to the 2025 interim report, the executive team includes President Li Hong, Board Secretary Han Huili, Vice President Sun Runhua, and Assistant President Zhang Houlin.

In December 2025, Pan Feng was approved as Chief Risk Officer. On February 2 this year, the Henan Financial Supervisory Authority approved Gao Rui’s appointment as Assistant President. Born in August 1981, Gao previously worked at Industrial Bank’s Zhengzhou branch and is now the youngest member of the bank’s management team.

In the first half of 2025, Bank of Zhengzhou reported operating income of RMB 6.69 billion, up 4.64% year-on-year, and net profit attributable to shareholders of RMB 1.627 billion, an increase of 2.1%.

As the bank prepares to disclose full-year 2025 results, new President Li Hong will present her first annual report card.