banks, real estate, and steel have continued to rise sharply, and the value of high-quality central state-owned enterprises that have been negative for a long time is expected to be re-evaluated
2024-09-26
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"mandatory market value management" has been initiated for stocks with negative net assets for a long time, and funds have begun to rush into the market. sectors with concentrated negative net assets, such as steel, real estate, and infrastructure, have continued to rise sharply.
according to the rules, listed companies whose average closing price from october 26, 2023 to september 25, 2024 is lower than the audited net asset per share in 2023 are considered to have long-term negative net asset value. according to statistics from the first financial daily, the number of long-term negative net asset value stocks is about 682, of which 297 are central state-owned enterprises, 225 are local state-owned enterprises, and 72 are central state-owned enterprises.
since the policy was released two days ago, the willingness of funds to buy central soes that have been trading below net value for a long time has increased significantly. on september 26, against the backdrop of a sharp rise in the shanghai and shenzhen stock markets, many central soe stocks surged, including jianfa group (600153.sh), poly developments (600048.sh), china merchants shekou (001979.sz), huafa group (600325.sh), and oct group (000069.sz).
banks and real estate chains are the "base camps" for central state-owned enterprises to break even
according to statistics from the first financial daily, there are 297 central soes that meet the conditions for long-term net loss, accounting for 43.55% of the total number of stocks with long-term net loss, of which 133 stocks have a total market value of more than 10 billion yuan, accounting for nearly 45% of the total number of 297. this shows that among the stocks with long-term net loss, there are quite a few companies with medium to large market value.
banks and real estate chains are the "base camp" of central soe stocks with negative net value, with a total of 24 bank stocks with negative net value for a long time. in addition to the five major banks, postal savings bank of china (601658.sh), industrial bank (601166.sh), shanghai pudong development bank (600000.sh), bank of jiangsu (600919.sh) and others are also on the list.
in addition to banks, the number of central state-owned enterprises with negative net assets in real estate, transportation, basic chemicals, construction and decoration, and steel all exceeded 20, with real estate and transportation having 34 and 30 stocks respectively, ranking first and second; construction and decoration and steel, whose industry prosperity is closely related to real estate, have 22 and 21 stocks respectively.
judging from the difference between the stock price (closing price in the last 12 months, the same below) and the net asset per share (2023 annual report, the same below), among the bank stocks, industrial bank has the largest net asset value loss, with a difference of -16.45 yuan. the bank stocks with the second largest difference are shanghai pudong development bank and hua xia bank, which are -11.36 yuan and -10.55% respectively. among the city commercial banks, bank of shanghai has the largest net asset value loss, at -8.04 yuan.
cement, building materials, infrastructure and real estate-related industries have seen a large drop in net assets. conch cement (600585.sh) had a net asset per share of 34.97 yuan in 2023, and its closing price in the past year was about 21.51 yuan, a difference of more than 13 yuan. on september 26, conch cement surged 7.35%. china railway construction and china communications construction are in similar situations, with net assets per share exceeding 16 yuan in 2023, while their share prices in the past year were less than 10 yuan. in the automotive industry, saic ranks third in terms of the drop in net assets, with a difference of -11.95 yuan.
which regions have more state-owned enterprises with negative net assets? according to further statistics from china business network, beijing and shanghai have 37 and 30 stocks respectively, ranking first among all provinces and cities; guangdong, jiangsu and zhejiang have 29, 28 and 20 stocks respectively, and tianjin, shandong, hebei, fujian and anhui have between 10 and 20 stocks.
funds rush in, and the market hopes for specific measures
since 2024, regulatory authorities and market participants have significantly increased their attention to market value management. with the implementation of this new policy, long-term net-negative stocks have ushered in the "mandatory market value management era". recently, the china securities regulatory commission clearly required in the "guidelines for the supervision of listed companies no. 10 - market value management (draft for comments)" that long-term net-negative companies should disclose valuation improvement plans, including goals, deadlines and specific measures, and make special explanations on the implementation of valuation improvement plans in the annual performance briefing.
since the implementation of the new market value management policy two days ago, the market index has surged, with the market turnover exceeding one trillion yuan for two consecutive days. judging from the stock price performance, the central state-owned enterprises with negative net assets have received significantly more attention from funds. statistics show that from september 24 to 26, the above-mentioned central state-owned enterprises with negative net assets rose by an average of 13%. minmetals capital (600390.sh) led the central state-owned enterprises for three consecutive days, with a cumulative increase of 33.09%. china railway construction and china communications construction rose by 15.33% and 18.44% respectively; among steel stocks, angang steel co., ltd. (000898.sz) and new steel co., ltd. (600782.sh) both rose by more than 18%.
a senior investment banker who was interviewed by the first financial daily reporter believed that the new market value management policy would help to repricing undervalued high-quality assets, especially central state-owned enterprises that have a large net loss but stable profitability. there may be room for value reassessment, bringing investment opportunities.
"different industries' net-negative soes have different preferences for using market value management tools. net-negative stocks with a technology growth style may be mainly based on equity incentives and employee stock ownership; basic chemical companies with stable operations may further increase their dividend ratio; and established steel and transportation companies with large total share capital will have a stronger willingness to repurchase. in addition to the creation of a special re-loan for stock repurchase and increase holdings, it is expected that repurchase and increase holdings will be the main way for large-cap net-negative soes to manage their market value." the above-mentioned investment banker said: "the current rise in individual stocks is mainly based on sentiment and expected stock price performance. as time goes on, we will see specific market value management measures issued by long-term net-negative stocks."
citic securities analyzed that the csrc has successively issued documents such as market value management guidelines and opinions on mergers and acquisitions of listed companies, continuing the previous "1+n" policy thinking of capital market reform. on the one hand, the document focuses on making requirements for major index component companies and companies with long-term negative net assets. considering that the market value of companies with long-term negative net assets accounts for more than 20%, it is expected that the market value management actions of related companies may continue to accelerate; on the other hand, the document focuses on supporting new quality productivity and industrial integration, and emphasizes supporting policies such as optimizing payment and pricing inclusiveness.
the strategy team of guotai junan securities believes that the two structural monetary policy tools for the stock market created by the central bank are expected to drive down the risk assessment of the stock market. among them, the creation of a special re-loan for stock repurchase and increase holdings is of great significance to central state-owned enterprises with market value management requirements and private blue chips with stable roe, providing them with the ability to increase their holdings of stocks. however, considering the asset-liability ratio requirements, the stock price valuation elasticity of central state-owned enterprises with negative net assets and companies with small circulating market value may benefit more.
(this article comes from china business network)
