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Shanghai encourages listed companies to conduct market value management in compliance with regulations, and the relationship between stock prices and listed companies will become closer. In addition to doing a good job in business, listed companies must also pay more attention to the rise and fall of stock prices, and when and how to conduct market value management, and it must be legal and compliant. This is also a test of the management wisdom of listed companies.

Compliant market value management can continuously increase the company's stock price through cash dividends, share repurchases, and major shareholders' increased holdings, which can avoid the company's stock price being wrongly killed as much as possible. Such market value management can achieve a win-win situation for investors and listed companies.

Encouraging compliant market value management means encouraging listed companies to maintain stock prices through cash dividends, share repurchases by listed companies, and major shareholders increasing their holdings. This is actually guiding listed companies to adapt to new market rules as soon as possible. Recently, some companies have clearly stated that they are not mentally prepared for new delisting rules such as par value delisting and market value delisting. Some listed companies have been deeply harmed by the frequent high dividends and transfers, triggering a par value delisting crisis for listed companies. The primary goal of compliant market value management is to avoid the risk of par value delisting and market value delisting for excellent listed companies through compliant means.

For listed companies, it is challenging to do a good job of market value management. The first prerequisite is to be legal and compliant, and not to cross the red line. For example, there is a kind of market value management that adopts cooperation between listed companies and third-party institutions. Listed companies leak favorable information that has not been released to third parties in advance, or cooperate with third-party institutions to release potential favorable information, answer investors' interactive questions, and even embellish financial statements according to the needs of the institutions. In return, the institutions help listed companies push up stock prices, help major shareholders complete high-priced reductions or pledges of shares, and help listed companies complete high-priced refinancing and other demands. This kind of illegal market value management involves illegal and irregular behaviors such as insider trading and stock price manipulation, which seriously violates the three principles of market fairness and infringes on the interests of investors.

Secondly, under the premise of legality and compliance, choosing the right market value management method at the right time is also a test. In terms of timing, when a company's stock price is undervalued for a period of time, it needs to attract the attention of listed companies. At this time, it is possible to strengthen communication with investors through the interactive platform, or through voluntary disclosure announcements, to promptly inform investors of important information such as the company's operating conditions within the scope of disclosure, so that the market can better understand the company's investment value.

When the investment value of a company continues to decline on the basis of being undervalued, listed companies and their management need to be highly vigilant. At this time, some market value management actions may be needed.

On the premise of complying with relevant dividend requirements and not affecting continued operations, the amount of cash dividends can be appropriately increased, or the frequency of cash dividends can be increased. By strengthening cash dividends, investors can have a greater sense of gain, thereby enhancing market confidence and "cheer up" the company's stock price.

At the same time, if funds are sufficient, a stock repurchase plan can be launched at an appropriate time. On the one hand, buying stocks can stabilize the company's stock price, and on the other hand, it can greatly enhance the company's intrinsic value. Especially for those blue chip stocks whose stock prices fall below net assets, large-scale repurchases can be a priority for market value management. It is worth noting that the optimal solution for the purpose of repurchasing shares is to repurchase shares and cancel them, which can greatly increase the market's recognition of the company's repurchase behavior.

In addition, when necessary, the actual controller and major shareholders can directly choose to increase their holdings of stocks with real money, which is also a common market value management method. If there are difficulties in increasing funds, major shareholders can also choose to issue a commitment not to reduce holdings. Although the effect is not as good as increasing holdings, it also has a positive effect in stabilizing market confidence.

Beijing Business Daily commentator Zhou Kejing