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In the turbulent capital market, equity pledge, as a flexible and efficient means of financing, is gradually becoming an important tool for many companies to solve liquidity problems, promote business expansion and optimize financial structure.

Simply put, "equity pledge" is a financing method in which a shareholder of a company uses the company's equity as collateral to apply for a loan from a financial institution. In the process, the shareholder retains all equity and temporarily transfers part or all of the corresponding income rights and disposal rights to the pledgee as a guarantee for obtaining funds.

According to data from 10JQ, there are currently 5,353 A-share listed companies, of which 2,344 have pledged equity, accounting for approximately 43.7%. The total number of pledged shares is approximately 346.7 billion shares, of which approximately 317.5 billion shares are pledged without restrictions.

The total number of pledged shares on the main board is approximately 310.6 billion shares

According to past data, in 2023, the total number of A-share equity pledge companies exceeded 2,400. Overall this year, it is expected that the number of equity pledge companies will exceed that in 2023.

Looking at the sectors, according to data from 10Jinhuashun, there are 1,624 companies pledging equity on the main board, with a total number of pledged shares of approximately 310.6 billion shares; there are 625 companies pledging equity on the ChiNext board, with a total number of pledged shares of approximately 34.5 billion shares; there are 95 companies pledging equity on the Science and Technology Innovation Board, with a total number of pledged shares of approximately 1.5 billion shares.

In terms of industry distribution, according to the first-level industry data of 10JQ, the pharmaceutical and biological, mechanical equipment, electronics, power equipment, and basic chemical industries have the largest number of companies with equity pledges, ranking in the top five.

Among them, there are 244 companies in the pharmaceutical and biological industry with equity pledges, and the total number of pledged shares is approximately 28.3 billion shares, ranking first; there are 200 companies in the machinery and equipment industry with equity pledges, and the total number of pledged shares is approximately 17.3 billion shares, ranking second; there are 195 companies in the electronics industry with equity pledges, and the total number of pledged shares is approximately 15.6 billion shares, ranking third; there are 186 companies in the power equipment industry with equity pledges, and the total number of pledged shares is approximately 18.2 billion shares, ranking fourth; there are 179 companies in the basic chemical industry with equity pledges, and the total number of pledged shares is approximately 21.7 billion shares, ranking fifth.

It is worth noting that in terms of the number of companies, the pharmaceutical and biological industry has the largest number, and in terms of the number of pledged shares, the basic chemical industry is not inferior. In addition, the number of companies in the automotive industry that have pledged equity is only 110, but the total number of pledged shares is about 16.7 billion shares.

Industry insiders believe that due to the long industrial chain, large investment scale and long payback period of the automotive industry, companies often face great financial pressure. At the same time, in order to expand market share, enhance competitiveness and enter new markets, automotive companies need a lot of funds for mergers and acquisitions, construction of production lines or research and development of new products. Equity pledge can provide companies with the necessary financial support to promote the realization of these strategic goals.

HNA Holdings has pledged the most unrestricted shares

According to data from 10JQ, the total number of pledged shares of A-share listed companies is currently approximately 346.7 billion shares, of which the number of pledged unrestricted shares is approximately 317.5 billion shares.

Unrestricted shares refer to shares that are not restricted in circulation and transfer. The number of pledged unrestricted shares reflects the company's financial status and funding needs to a certain extent. A large number of pledged shares may mean that the company is currently facing greater funding pressure or investment needs.

According to data from 10JQ, HNA Holdings, China Minsheng Bank, Yongtai Energy and Greenland Holdings have the largest number of pledged unrestricted shares, which are also 8.871 billion shares, 7.351 billion shares, 4.3 billion shares and 3.610 billion shares, respectively.

Among them, the pledge ratio of HNA's controlling shareholders accounted for 20.71% of the total share capital, with a total pledged market value of 9.847 billion yuan. The pledged shareholders include Grand China Air Co., Ltd., Hainan Nanfang Da Aviation Development Co., Ltd., Hainan Hanwei Investment Co., Ltd., and HNA Group Co., Ltd.

The pledge ratio of China Minsheng Bank shareholders accounts for 20.73% of the total share capital, with a total pledged market value of 25.288 billion yuan; the pledge ratio of China Guanghui Auto shareholders accounts for 42.43% of the total share capital, with a total pledged market value of 2.746 billion yuan.

According to data from Tonghuashun, there are 112 ST companies with equity pledges. Among them, ST Yiguo has the highest number of pledged shares, with 1.719 billion shares, followed by ST Xudian, with 1.094 billion shares, and 849 million shares of unrestricted shares.

More than 40% of listed companies in Zhejiang pledge their equity

Focusing on local areas, there are 310 listed companies in Zhejiang Province with equity pledges, accounting for 43.85% of the total number of listed companies in the province. Among them, 226 are listed on the main board, 76 on the Growth Enterprise Market, and 8 on the Science and Technology Innovation Board.

According to the data, Xinhu Zhongbao has the largest number of pledged shares, which is 2.421 billion shares, with a pledge ratio of 28.46%; China Zheshang Bank ranks second, with 2.388 billion shares and a pledge ratio of 11.09%; and Century Huatong ranks third, with 1.129 billion shares pledged and a pledge ratio of 15.15%. All three have unrestricted shares.

In terms of industry, the top five industries with the most companies pledging equity in Zhejiang are machinery and equipment, pharmaceuticals and biology, automobiles, basic chemicals and electronics, with 40, 33, 26, 23 and 22 companies respectively, which is basically similar to the overall A-share industry.

In terms of company nature, private enterprises are the largest, with 253, accounting for 81.6%; there are 35 local state-owned and central enterprises, accounting for 11.2%; there are 11 Sino-foreign joint ventures, accounting for 3.5%; there are 3 groups, accounting for 0.9%; and there are 8 others, accounting for 2.5%.

It is worth noting that in the overall A-share market, there are 530 local state-owned and central enterprises, accounting for only 9.8%.

In this regard, the above-mentioned industry insider said that unlike private enterprises, the proportion of listed company stocks held by state-owned enterprises that can be pledged to others is strictly limited, and the specific pledge ratio will be formulated according to the "Notice on Promoting the Transfer of State-owned Property Rights of Enterprises" (State Assets Development and Property Rights [2014] No. 95) and other documents. This restriction is intended to prevent state-owned enterprises from losing control of the company due to equity pledges, thereby maintaining their political and economic stability.