This week (from December 20 to December 24, 2021, the same below) the Hang Seng index was 0.13%, the Dow Jones industrial index was – 1.68%, the S & P 500 index was 2.28%, and the NASDAQ index was 3.185%. This week, the Hang Seng technology index was – 1.08%, and the CSI China Internet 50 index was 0.53%. Hong Kong stock connect bought about 10.895 billion yuan this week, and about 14.265 billion yuan last week.
CSRC: Vie structured enterprises that meet the compliance requirements can be listed abroad after filing
On December 24, the CSRC solicited public opinions on the administrative provisions of the State Council on overseas issuance and listing of securities by domestic enterprises (Draft for comments). Domestic enterprises issuing and listing overseas shall strictly abide by national laws, regulations and relevant provisions, establish and improve the confidentiality system, take necessary measures to implement the confidentiality responsibility, and shall not disclose state secrets or damage national security and public interests. Where the overseas issuance and listing of a domestic enterprise involves providing personal information and important data abroad, it shall comply with the laws, regulations and relevant provisions of the state.
Ant Xiaojin increased its capital by 22 billion, and ant group still holds 50%
On December 24, several companies announced that, Chongqing ant Consumer Finance Co., Ltd. (hereinafter referred to as ant consumer finance) will issue an additional 22 billion yuan of registered capital to all subscribers for capital increase. After the capital increase is completed, the registered capital will be increased from 8 billion yuan to 30 billion yuan. This evening, China Xinda announced that the company will invest 6 billion yuan to subscribe for 20.000% equity of Chongqing ant Consumer Finance Co., Ltd. (ant consumer finance) in cash. After the subscription is completed, the group will hold 24.003% equity of ant Xiaojin. Jiangsu Yuyue Medical Equipment And Supply Co.Ltd(002223) announced that it plans to subscribe for ant consumer gold with its own capital of RMB 1097.8 million, with a new registered capital of RMB 1097.8 million. After the capital increase, the equity ratio of ant Xiaojin held by the listed company is still 4.990%. In addition, ant group, the former shareholder of ant Xiaojin, increased its capital by 11 billion yuan, and Shun optics, boguan technology and Yufu capital increased their capital by 1.8 billion yuan, 1.322 billion yuan and 780 million yuan respectively.
Tencent distributed JD shares in kind in the medium-term dividend
Tencent announced on the morning of Thursday (December 23) that it plans to implement interim dividend distribution and plans to receive one class a common share of JD group for every 21 Tencent shares in the form of in kind distribution. This kind of dividend to its shareholders with its shares and involves two famous Chinese technology stocks, which immediately attracted great attention of investors. After the dividend, Tencent is no longer the largest shareholder of JD, but still holds about 2.3% of JD. Tencent explained that JD has been able to raise funds independently for development. Now, the transfer of most of JD’s interests is in line with Tencent’s investment strategy. In the future, Tencent and JD will still maintain a solid partnership.
Investment suggestions:
The CSRC will solicit public opinions on the relevant systems for overseas listing, implement unified filing management for the direct and indirect listing of domestic enterprises, set up a “traffic light” to clarify the situation that overseas listing is not allowed, strengthen cross-departmental regulatory coordination and improve cross-border regulatory cooperation. While making up for the shortcomings of the system, we will reduce the burden on enterprises and promote the institutional high-level opening of the capital market to the outside world. We believe that the release of the new regulations on overseas listing adheres to the firm attitude of opening to the outside world, the policy transparency and predictability are significantly improved, and the vie structure enterprises that express their legal compliance can be listed overseas after filing. It is expected that the worries of the overseas market will improve. The new regulations emphasize strict compliance with national security regulations. The filing materials need to include security assessment and review opinions (if applicable), and follow-up attention will be paid to the implementation of new regulations and system connection of network security review of the Internet information office.
This week, Tencent’s distribution of JD shares triggered a slight fluctuation in the market. We believe that the financial impact of this physical distribution of medium-term special dividend is limited, which is conducive to the improvement of Tencent’s portfolio valuation. There is some pressure on JD’s short-term transaction. We focus on the renewal of the cooperation agreement in 2022, which is likely to continue the business mutually beneficial relationship. We expect Tencent to strengthen its investment in tob and cutting-edge technology, and do not rule out the contraction of equity investment in non core consumer Internet. Considering that Tencent has laid a solid foundation for social traffic / content matrix, the win-win business of partner enterprises tends to be stable, or is limited by the impact of potential equity changes. It is expected that Tencent’s ecology will remain relatively stable, and the suppression of short-term trading sentiment of its partner enterprises will gradually ease.
We believe that under the normalization of Internet regulatory policies and cross-border regulation, market concerns will return to enterprise fundamentals. It is expected that with the steady growth of China’s economy and the stabilization of the marginal impact of regulatory policies, Chinese science and technology Internet enterprises are expected to gradually usher in a revaluation. China’s technology companies are advised to focus on Tencent, the US group, many spells, Alibaba, NetEase, Jingdong, fast hand, beep Kwai, health and graffiti. Foreign technology enterprises continue to pay attention to the progress of sea, roblox, meta (renamed by Facebook), unity, square (renamed by block) and confirm.
Risk tips: 1. Overseas epidemic control is less than expected; 2. Sino US trade friction; 3. Risk of tightening Internet supervision; 4. The tightening of liquidity environment exceeded expectations; 5. Competition in overseas markets has intensified.
