SASAC: continue to increase the injection of high-quality assets into listed companies
On May 18, Weng Jieming, member of the Party committee and deputy director of the state owned assets supervision and Administration Commission of the State Council, said at the special promotion meeting of deepening the reform of state-owned holding listed companies and striving to be a three-year action model for the reform of state-owned enterprises that it is necessary to continue to strengthen the injection of high-quality assets into listed companies. The group company should systematically sort out the unlisted and listed resources, and gradually inject the existing unlisted high-quality assets into listed companies in a planned way in combination with the actual situation. If necessary, it can also be listed separately. We should steadily explore the spin off and listing of qualified multi sector listed companies, and support the spin off and listing of subsidiary enterprises that are conducive to straightening out the business structure, highlighting the advantages of the main business, optimizing the industrial layout and promoting the realization of value. We should revitalize or exit the inefficient and invalid listing platform.
We believe that the current state-owned enterprise reform has entered the deep water area. 2022 is the end of three years of state-owned enterprise reform action. State owned enterprises will continue to make continuous efforts in strengthening the connection of high-quality assets with the capital market, revitalizing potential development assets, exiting inefficient and ineffective listing platforms, and comprehensively optimizing the layout of listing platforms. The securitization of military assets may accelerate.
Integration of state-owned assets and equity incentives or major reform programs
Integration of state-owned assets: during the national two sessions this year, Tan Ruisong, chairman of the aviation industry, submitted a proposal on the establishment of an asset adjustment platform for central military enterprises, calling for solving the problems of military asset market, capacity and asset liquidity from the perspective of industry management and policy mechanism, so as to enable central military enterprises to release the market value of more stock assets and optimize the asset structure. On April 29, the leading platform of main engine Avic Shenyang Aircraft Company Limited(600760) announced that it planned to acquire 60% equity of Geely Airlines maintenance company and increase capital, so as to complete the construction of manufacturing maintenance life cycle support system platform. On April 21, aviation industry airborne: accelerate the professional integration and transformation and upgrading to system suppliers.
Equity incentive: on May 30, 2020, the SASAC issued the guidelines for the implementation of equity incentive by listed companies controlled by central enterprises, which provides specific implementation rules for equity incentive by listed companies controlled by central enterprises. In 2019 and 2020, a total of 9 central military enterprises carried out equity incentive, exceeding the sum of the previous six years, and carried out long-term incentive measures based on equity incentive, which promoted or became the trend of the reform of central military enterprises. According to our statistics, after the implementation of equity incentive for more than 36 months, 93.33% of the company’s share price rose, and 66.67% of the companies with an increase of more than 50%. As a long-term incentive mechanism, equity incentive has an obvious effect on the performance and stock price of military enterprises.
Investment suggestion: focus on reform enterprises with strong fundamentals and at the excellent valuation level (peg1x): such as China Avionics Systems Co.Ltd(600372) , Avic Electromechanical Systems Co.Ltd(002013) , Avic Shenyang Aircraft Company Limited(600760) , Guizhou Space Appliance Co.Ltd(002025) , Avic Xi’An Aircraft Industry Group Company Ltd(000768) , Avic Aviation High-Technology Co.Ltd(600862) , etc.
And aerospace and electric technology enterprises that pay attention to small market value and complete equity incentive: Aerosun Corporation(600501) , Chengdu Spaceon Electronics Co.Ltd(002935) , Gci Science & Technology Co.Ltd(002544) , Sun Create Electronics Co.Ltd(600990) , etc.
Risk tip: the risk that the promotion of state-owned enterprise reform is lower than expected, the risk of changes in the international situation, the risk of fluctuations in the price of raw materials, etc.
