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reporter xiao ruidong, editor zhao yun

in the past trading week (9.18~9.20), there were only three trading days, and the a-share market as a whole rebounded slightly. for example, the shanghai composite index rose by 1.21% in three consecutive days, and the wind all a index also rose by 1.27% in the past three days.

this is naturally closely related to the implementation of the federal reserve's interest rate cut, which is closely watched by the world.

after the market closed on friday, a piece of news from the a-share market also constituted good news - kweichow moutai, which has been listed for 23 years, will repurchase its shares through cancellation for the first time, with the amount not less than 3 billion yuan and not more than 6 billion yuan.

this news is undoubtedly good news for moutai and the liquor sector. on thursday and friday, the sector as a whole has recorded two consecutive gains.

as the stock with the largest weight ratio in the shanghai stock index (4.132%),can the strength of kweichow moutai and the liquor sector further drive the broader market upward?

today we will focus on analyzing this issue from several aspects.

(1) how significant is kweichow moutai’s repurchase this time?

as mentioned above, this is the first time that maowang has issued a cancellation-style repurchase plan since its listing, with the maximum repurchase amount reaching 6 billion yuan.this sets a new record for the highest amount that an a-share company plans to repurchase this year.

a write-off repurchase can optimize a company's capital structure and improve financial indicators such as earnings per share and return on equity per share, thereby increasing investor returns.

in addition, cancellation-style repurchases can also prevent companies from reducing their holdings for arbitrage after future stock price increases, which helps stabilize market expectations and boost investor confidence.

it should be pointed out thatmoutai is not "short of money".the financial report shows that as of june 30, 2024, kweichow moutai’s total assets were 279.207 billion yuan, the net assets attributable to shareholders of listed companies were 218.576 billion yuan, and cash and cash equivalents were 145.267 billion yuan.

assuming that the upper limit of rmb 6 billion for the repurchase of shares is fully used, the repurchase funds will account for approximately 2.15% of the company's total assets as of june 30, 2024, 2.75% of the net assets attributable to shareholders of listed companies, and 4.13% of cash and cash equivalents.

moutai’s related announcement also mentioned that the company’s major shareholder is currentlyno plans to reduce holdingsif there is a plan to increase holdings in the future, the company will fulfill its information disclosure obligations in a timely manner in accordance with relevant regulations.

(2) how much “weight” does kweichow moutai have in the a-share market?

in addition to its 4.132% weighting in the shanghai composite index, kweichow moutai's current total market value is nearly 1.6 trillion yuan, still ranking among the top 5 of all a-shares.

as of the close of september 20, the wind liquor index had 19 constituent stocks with a total market value of approximately 2.74 trillion yuan, of which moutai accounted for more than half.

however, moutai is more widely known for its“fund heavily held stocks”。

wind data shows that the peak shareholding ratio of public funds in kweichow moutai was 7.84% at the end of the second quarter of 2022. at most, 2,065 funds held the stock that year, and then slowly declined quarter by quarter.

as of the end of the second quarter of this year, catl replaced kweichow moutai as the number one holding stock of public funds, but moutai is still heavily held by 1,265 funds, which hold a total of 80.75 million shares, accounting for 6.43% of the shares.

in other words, if moutai's stock price recovers, the institutions that still hold on to it will undoubtedly be very happy.

(3) what was the background of the initial repurchase proposal?

on the one hand, moutai has recentlythe situation is slightly embarrassing。

since may this year, the share price of moutai has shown a clear downward trend. on wednesday this week (september 18), it fell below the 1,300 yuan mark, falling to a two-year low. from the beginning of the year to this friday, the market value has evaporated by more than 580 billion yuan.

there have also been recent media reports that many scalpers have said they no longer repurchase the year of the dragon maotai, saying that its wholesale price has fallen below the issue price (2,499 yuan per bottle), and that wine merchants are worried about the subsequent price trend of maotai.

on the other hand, this yeara-share repurchase boom continues, moutai is one of the new entrants.

according to media analysis, excluding the impact of targeted repurchases, more than 1,300 a-share listed companies have announced repurchase plans this year, more than three times the number of the same period last year, and a record high.

experts said that timely stock repurchases by listed companies are conducive to optimizing capital structure, stabilizing or increasing stock prices, enhancing shareholders' control over the company, and promoting the long-term and healthy development of listed companies.

(4) can you refer to historical market conditions to estimate the effect of this repurchase?

historically, moutai group and its subsidiaries have increased their holdings of their own stocks four times. the first three times occurred in 2010, 2012 and 2013, but we will not mention the ones that are too far away.

the most recent increase in holdings occurred in 2023, during which time moutai group co., ltd. increased its holdings by 919,600 shares and moutai technology development co., ltd. increased its holdings by 37,600 shares. the two increased their holdings by a total of approximately 1.745 billion yuan.

from the first announcement of the increase in holdings to the announcement of the completion of the increase in holdings (february 10 to june 26 of that year), the stock price of moutai fell by 6% in total, and the range trend is as follows↓

during the same period, the shanghai composite index fell 3.66%, but the degree of overlap between its trend and that of moutai was not particularly high.

after all, it is well known that the strongest theme of a-shares in the first half of last year was "ai", while liquor was slightly lonely.

since the beginning of this year, the similarities between the trends of moutai and baijiu and the overall market have increased significantly, which are roughly:

the rebound started in early february, peaked in mid-to-late may, and has continued to fall back ever since.

however, both moutai and the entire liquor sector are currently trading much lower than at the beginning of february.

some analysts pointed out that moutai's valuation has fallen to a low level in recent years, with its ttm price-to-earnings ratio falling below 20 times. the company's stock repurchase affirms the current value of the company. on the other hand, moutai has more than 100 billion yuan in cash and cash equivalents, so repurchasing the company's stock at this time is more cost-effective.

since the valuation is cheaper and the repurchase of funds is stronger,there is still great hope for an "oversold rebound" in the short term.

however, in terms of "driving the market", the "voice" of moutai and even the liquor sector is objectively weaker than that of banks, insurance and other larger companies.the dividend sector is more favored by market protection funds.

wind data shows that among the "trillion-dollar club", kweichow moutai is the only stock that has fallen significantly this year.

(5) what other news events are worth paying attention to over the weekend?

ministry of foreign affairs: the consensus document reached between china and japan does not mean that china will immediately resume full import of japanese aquatic products

citic securities: it is expected that the probability of the rmb exchange rate breaking through 7.0 this year is not high

many csi 300 etfs hit record trading volume since july on friday, and non-commodity etfs have attracted 33 billion yuan in september

three people fabricated and published rumors about transfer and financing and were punished by the public security organs

from january to august, the stamp duty on securities transactions decreased by 55.5% year-on-year

qualcomm is reportedly planning to acquire intel in full, intel: no comment

it is reported that nvidia has stopped accepting h20 chip orders since last month, but there is no explicit notice

（6）what major events are coming up next week?

market price changes of important means of production in the circulation sector are released

on september 24, the national bureau of statistics will release changes in market prices of important means of production in the circulation sector.

previous data showed that according to the monitoring of market prices of 50 important means of production in nine categories in the national circulation field, compared with late august 2024, prices of 18 products rose, 30 fell, and 2 remained unchanged.

monthly report on industrial economic benefits released

on september 27, the national bureau of statistics will release the monthly report on industrial economic benefits.

previous data showed that from january to july this year, industrial enterprises above designated size nationwide achieved operating revenue of 75.93 trillion yuan, a year-on-year increase of 2.9%; industrial enterprises above designated size achieved a total profit of 409.917 billion yuan, a year-on-year increase of 3.6%.

market:

wind data shows that next week, a total of 75 a-share companies will gradually release restricted shares, with a total of 2.686 billion shares released, and the total market value of the release is 31.862 billion yuan. the top three companies in terms of market value of the release are: qi'anxin-u (3.754 billion yuan), kaisheng new materials (2.855 billion yuan), and power diamond (2.841 billion yuan). the top three companies in terms of the number of shares released are: sujiaoke (291 million shares), zhongyida (260 million shares), and kaisheng new materials (252 million shares).

it is worth noting that next week the people's bank of china will have open market1802.4 billion yuan of reverse repurchase maturesfrom monday to friday, 138.7 billion yuan, 0 yuan, 568.2 billion yuan, 523.6 billion yuan and 571.9 billion yuan will mature respectively.

(7) what else is worth watching in this week’s market?

index weekly

weekly leading gainers and losers

industry index

concept index

number of stocks that rise or fall, number of stocks with price limits, market volume

weekly gain and loss ratio 3375:1854

weekly gain and loss list of stocks

continuous board situation

cover image source: daily economic news data map