Recently, the CSRC, the SASAC and the all China Federation of industry and Commerce jointly issued a notice on further supporting the healthy development of listed companies (hereinafter referred to as the “notice”), taking many measures to support the development of listed companies and maintain the stability of the capital market. Since the beginning of this year, multi-channel funds, including industrial capital and institutional investors, have also taken active actions, with frequent repurchase and increase of holdings. Insiders said that the multiple measures for the capital market issued by the three ministries and commissions have effectively stabilized market confidence from creating a good development environment, stabilizing enterprise expectations, enhancing value return and stabilizing investor expectations. It is expected that the steady growth policy will continue to work in the future, and the valuation advantage of the A-share market will appear day by day.
industrial capital and long-term capital move frequently
In terms of content, the notice is clear that it is necessary to create a good development environment and stabilize enterprise expectations. Improve the system and mechanism conducive to the participation of long-term institutional investors in the capital market, encourage and support social security, pension, trust, insurance and financial institutions to allocate more funds to equity assets, and increase capital market investment, especially the stock investment of high-quality listed companies. We should promote the return of value and stabilize investors’ expectations. Encourage listed companies to repurchase shares for equity incentive and employee stock ownership plans.
In fact, since this year, multi-channel funds, including industrial capital and institutional investors, have been actively taking action. On the one hand, industrial capital entered the market quickly and frequently took measures such as increasing holdings and repurchasing shares of the company, so as to convey market confidence; On the other hand, institutional investors such as social security fund, insurance capital and QFII are also accelerating the layout of A-share listed companies.
On the evening of April 11, Luxshare Precision Industry Co.Ltd(002475) announced that Wang Laisheng, one of the actual controllers and vice chairman of the company, plans to increase his shareholding by 200 million to 400 million yuan in the next six months.
Similarly, 9 listed companies including He Bei Cheng De Lolo Company Limited(000848) , Zwsoft Co.Ltd(Guangzhou)(688083) etc. issued repurchase plans one after another after trading on the 11th He Bei Cheng De Lolo Company Limited(000848) announcement shows that the company plans to use its own funds to buy back some A-share social public shares in the form of centralized bidding transaction for cancellation and reduction of registered capital. The capital amount of this repurchase shall not be less than 200 million yuan and not more than 400 million yuan Gongniu Group Co.Ltd(603195) also said in the announcement that it plans to use its own funds to repurchase the company’s shares in the form of centralized bidding transaction, and all of them will be used to implement equity incentive at an appropriate time in the future.
According to the data, as of the press release on April 12, more than 400 listed companies had implemented repurchase plans during the year, with a total repurchase amount of more than 2.3 billion shares and a total repurchase amount of 26.6 billion yuan. In terms of amount, 60 listed companies repurchased more than 100 million yuan in total during the year; In terms of quantity, many listed companies have repurchased more than five times this year. Among them, the total amount of five repurchases in Hengli Petrochemical Co.Ltd(600346) year was 1.714 billion yuan, the total amount of five repurchases in S.F.Holding Co.Ltd(002352) year was 1.287 billion yuan, and the total amount of repurchases in Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) year reached 999 million yuan.
The recently intensively disclosed annual report also reflects the layout of institutional investors. According to the statistics of the reporter of the economic information daily, as of the press release on April 12, among the 1552 listed companies that have disclosed the annual report, the three long-term funds of social security fund, insurance capital and QFII have appeared in 554 listed companies, accounting for nearly 36%, with a total number of 113571 billion shares and a total market value of 1.41 trillion yuan. In terms of industry, many new economy and new kinetic energy fields, including new materials, information technology and medical care, have won the favor of long-term funds.
It is worth noting that on April 12, the A-share market rebounded strongly. As of the closing of the day, the Shanghai Composite Index closed at 321333 points, up 1.46%; Shenzhen composite index closed at 1175638 points, up 2.05%; The gem index returned above 2500 points and closed at 252369 points, up 2.50%. Brokerage, catering and tourism, Baijiu, aviation, and home appliance sectors are leading all sectors.
a-share valuation advantage
Although the A-share market continued to fluctuate and adjust during the year, industry insiders said that the policy level frequently released positive signals, all kinds of funds were also accelerating the entry, and the market confidence was strongly stabilized. On the whole, the steady growth policy will continue to work, and the valuation advantage of the A-share market is becoming more and more obvious.
Chen Li, chief economist of Chuancai securities and director of the Research Institute, said that at present, the A-share market has been greatly adjusted, and many targets have been callback below the historical valuation center. The peg (price earnings ratio relative to profit growth ratio) of many growth stocks is less than 1. The market investment opportunities appear, which is a good opportunity for the layout of long-term funds. Therefore, there will be more and more shareholder increase and share repurchase schemes of listed companies. At present, only A-Shares are affected by market sentiment, resulting in poor performance of the index. In the future, as the epidemic situation improves, the market panic subsides and the effect of China’s policies appears, A-Shares will return to the upward shock trend.
At present, the market development also faces many positive factors. Yang Delong, chief economist of Qianhai Kaiyuan, also said that recently, the management of the capital market has released many positive signals, showing that the attention to the capital market has increased. The release of the opinions of the CPC Central Committee and the State Council on accelerating the construction of a national unified market is an important measure to improve market efficiency, break monopoly and local protection, and is conducive to promoting the sustainable development of China’s economy. Recently, the three ministries and commissions jointly issued a number of measures to support the development of listed companies, which will boost market confidence from creating a good development environment, stabilizing enterprise expectations, enhancing value return, stabilizing investor expectations and other aspects. It points out the direction for sustainable economic development and improving the quality of listed companies. Chen Li also said that the documents issued by the three ministries and commissions cover from performance to market value, from entities to finance. In the short term, they help boost market confidence. In the medium term, there is still the possibility of bottom shocks in the market, which is conducive to the healthy development of the capital market in the long term.
Looking ahead to the future, China International Capital Corporation Limited(601995) said that from a comprehensive point of view, some factors causing market adjustment have been actively resolved at the policy level, the fundamental signal is still weak, the potential inflection point may still need to wait for the effectiveness of the policy to achieve fundamental improvement, the short-term market may still be repeated, but the stage similar to the sharp decline in the early stage may have ended, and the subsequent market may gradually enter the bottom grinding stage. Combined with the adjusted range, valuation and possible digestion of negative factors, the market opportunities in the medium-term dimension are greater than the risks. Bohai Securities also believes that based on the judgment of performance and valuation, the overall downward space of the current market is small. Subject to uncertain factors, the market is still characterized by volatility. Once the uncertain factors are alleviated or the micro main body is improved, the upward space of the market is large. Caixin Securities believes that at present, the price earnings ratio valuation of the A-share market is at a historical low, and the medium and long-term funds usher in a better layout time point
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