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just now, the first a-share company to announce the use of special loans to increase its shareholding was born!

this evening, bairen medical (688198) announced on the shanghai stock exchange that in response to the central bank's policy guidance, the company's controlling shareholder and actual controller jin lei plans to use special loan funds to increase its holdings of the company's a shares.

previously, on september 24, the principals of the central bank, the state administration of financial supervision, and the china securities regulatory commission jointly held a press conference to launch a series of favorable policy measures, including the creation of special re-lending for stock repurchases and holdings increase, and guiding banks to provide loans to listed companies and major shareholders. provide loans to support the repurchase and increase of stock holdings. the initial quota is 300 billion yuan, and the scale will be expanded in the future depending on the application situation.

it was also from september 24 that the a-share market launched a strong rise. within 5 trading days, the shanghai stock exchange index rose by more than 21% and stood at the 3,300-point mark, and the shenzhen component index rose by more than 30%. , the gem index rose by 42%.

so, how will the a-share market perform after the holiday?

the first case of a shares

on the evening of october 7, bairen medical disclosed the company’s controlling shareholder and actual controller’s shareholding plan on the shanghai stock exchange. according to the announcement, jin lei, the actual controller of bairen medical, plans to use special loan funds to increase its shareholding in the company from 100,000 shares to 2.13 million shares.

bairen medical said that the company’s controlling shareholder and actual controller jin lei is based on the company’s current stage of operation, product research and development progress, and the company’s rapid development strategy in the next year disclosed in the company’s “2023 annual report” and “2024 semi-annual report”. gradually implemented, in order to respond to the central bank's policy guidance, it is planned to use special loan funds to increase the company's circulating a shares without sales restrictions within 6 months from october 8, 2024.

bairen medical stated that jinlei’s increase in holdings does not set an upper or lower limit on the price of the increased shares, and the number of shares to be increased will be from 100,000 shares; in accordance with the "shanghai stock exchange science and technology innovation board stock listing rules", non-social the shares held by public shareholders shall not exceed 75% of the total number of shares of the company. currently, the holding increase entities and persons acting in concert control a total of 73.4242% of the company’s shares. other non-public shareholders hold 0.0200% of the company’s shares. this increase in holdings the upper limit is 1.5503% of the company's total share capital. based on this calculation, the number of shares planned to be increased this time will not exceed 2.13 million shares.

according to public information, bairen medical is the leading innovation platform for animal-derived implantable interventional medical devices in china. its products are mainly used in the fields of structural heart diseases such as heart valve disease and congenital heart disease, as well as soft tissue repair. the company has now been approved for 20 class iii medical device products, including 10 products including artificial biological heart valves - bovine pericardial valves, valvuloplasty rings, cardiac surgery biological patches, outflow tract single valve patches, and heart valve biological patches. it is the first domestically produced similar product approved for registration in china, filling a domestic gap.

financial report data shows that in 2023, bairen medical will achieve operating income of 371 million yuan, a year-on-year increase of 25.57%. the company's three major business segments all achieved year-on-year revenue growth: the heart valve replacement and repair segment increased by 21.14% year-on-year, of which revenue from artificial biological heart valves increased by 27.74% year-on-year; the congenital heart disease interventional treatment and surgical soft tissue repair segments increased by 26.49% and 26.49% year-on-year respectively. 29.74%. for the whole year of 2023, the company achieved a net profit of 115 million yuan attributable to shareholders of listed companies, a year-on-year increase of 21.11%.

in the first half of 2024, bairen medical achieved operating income of 191 million yuan, a year-on-year increase of 13.74%. the company's expectation for full-year operating income to increase by 30% to 40% year-on-year remains unchanged. in the first half of the year, the company's research and development expenses were 75.22 million yuan, a year-on-year increase of 110.75%, accounting for 39.45% of operating income. affected by the high level of r&d investment, the company's net profit attributable to shareholders of listed companies in the first half of the year was 35.19 million yuan, a year-on-year decrease of 20.42%.

bairen medical was listed on the shanghai stock exchange's science and technology innovation board in december 2019. after its listing, the stock price has been rising. at the end of september 2021, the company's market value once exceeded 30 billion yuan. after that, the company's stock price fluctuated and fell back. as of september 23, 2024, the company's market value shrank to 13.2 billion yuan. from september 24 to september 30, the company's stock price rebounded by 20% in line with the broader market, and its latest market value was 15.9 billion yuan.

the first phase quota is 300 billion yuan

on september 24, the principals in charge of the central bank, the state administration of financial supervision, and the china securities regulatory commission jointly held a press conference to launch a series of favorable policies and measures. these include the creation of special refinancing for stock repurchases and holdings increase, guiding banks to provide loans to listed companies and major shareholders, and supporting the repurchase and increase of stock holdings. the first phase of the quota is 300 billion yuan, and the scale will be expanded later depending on the utilization situation.

pan gongsheng, governor of the people's bank of china, said on the same day that in order to maintain the stability of my country's capital market and boost investor confidence, the people's bank of china, in consultation with the china securities regulatory commission and the state administration of financial supervision, created two structural monetary policy tools support the stable development of the capital market.

the first tool is the swap facility for securities, funds, and insurance companies. the participating securities, funds, and insurance companies will be determined by the china securities regulatory commission and the state administration of financial supervision in accordance with certain rules, and their bonds, stock etfs, csi 300 constituent stocks, etc. will be used. assets are used as collateral to exchange highly liquid assets such as government bonds and central bank bills from the central bank. this policy will greatly enhance their ability to obtain funds and their ability to increase stock holdings. pan gongsheng said that the initial operation scale of the securities, fund and insurance company swap facility is 500 billion yuan, and the scale will be expanded in the future depending on the situation. at the press conference, pan gongsheng said, "as long as this thing is done well, the first phase of 500 billion can be followed by another 500 billion, or even the third 500 billion. the funds he obtained through this tool can only be used for investment. stock market.”

the second tool is a special refinance for stock repurchases and holdings increase, which will guide commercial banks to provide such a loan to listed companies and their major shareholders for the purpose of repurchasing and increasing stock holdings of listed companies. pan gongsheng said, “such an operation, in which shareholders and listed companies repurchase or increase their holdings of shares of listed companies, is a very frequent transaction in the international capital market. the central bank will issue re-loans to commercial banks and provide a proportion of financial support. it is 100%, and the refinancing interest rate is 1.75%. when a commercial bank provides a loan to a customer, the interest rate will be around 2.25%, with an additional 0.5 percentage point allowed. this interest rate level is also very low, and the first installment amount is 300 billion. if this tool is used well, it can be used for another 300 billion, or even a third 300 billion. it depends on the market conditions and some evaluation. this tool can be used for state-owned enterprises, private enterprises, and a mixture of them. ownership enterprises and other listed companies with different ownerships.”

what to do after the a-share holiday?

although a-shares have already accumulated considerable gains before the holiday, most institutions are still optimistic about the trend of a-shares after the holiday.

guotai junan said that the decline in risk-free interest rates and the boost in risk appetite have driven incremental funds into the market, and the stock index is expected to continue to rise. before the market started, the stock market had been adjusted and short-selling for years, and the trading structure was completely cleared. the driving force of this round of stock market conditions comes from the decline in risk-free interest rates, which promotes the entry of incremental funds into the market, and the change in investors' expectations for risk prospects, which boosts risk appetite. optimistic expectations will continue to push up the stock market, and the shanghai composite index is expected to reach the 2021- 2022 operating area. the rhythm first increased and then fluctuated, and the decision came at the end of the year. heavyweight stocks are rapidly filling the valuation depression, and excess returns are optimistic about growth.

citic securities also pointed out that monetary instrument innovation and the politburo meeting’s stance on real estate at the end of september both significantly exceeded market expectations. on the monetary policy front, this round of widespread interest rate cuts is very rare in history. at the same time, the collateral swap facilities and stock repurchases and special re-lending for holdings launched by the central bank clearly exceeded market expectations and were widely understood by investors as providing the central bank with a put option protection for the stock market has made investors more firm in their expectations of a market bottom. in addition, it is extremely rare for the politburo meeting to analyze and study the economic situation in september, reflecting the importance that decision-makers attach to increasing macro-control and strengthening counter-cyclical adjustments. among them, the meeting proposed for the first time to promote the real estate market to "stop falling and stabilize". this is the first time that policy objectives have been clarified since the politburo meeting in july last year adjusted the positioning of real estate. it also made it clear for the first time that reducing supply should also be used as one of the control measures.

citic securities stated that there have been major changes in policy signals and market expectations have experienced a major reversal. in the future, domestic demand policies will continue to increase or push price signals to arrive earlier, and the market will usher in a major turning point; after the expected major reversal, incremental funds, mainly retail investors, will be concentrated. characterized by entry, the pulse-like rise will continue in the short term; it is currently in the transition stage from an expected major reversal to a major turning point in the market, with low p/b and domestic demand recovery as the core. after the price signal is confirmed and a major turning point in the market is ushered in , will start an annual bull market with the credit cycle as its core feature, and institutional investors will have a better time to enter. by then, the two major sectors of high-quality growth and domestic demand are expected to continue to dominate.

avic securities pointed out that the 924 financial combination boxing and the 926 politburo meeting jointly pointed to macro policies that will be significantly tilted towards stabilizing growth. the rapid implementation of supporting policies for the two important conferences further confirms that this round of policy shifts is more urgent. after the policy shift, market sentiment recovered rapidly, a-share trading volume hit a record high, and the policy bottom has been confirmed. at the end of this policy, the policy has changed significantly, and foreign capital is expected to return as a trend. therefore, a-shares are expected to achieve greater gains than the previous northward inflow range. it is recommended to follow the direction of policies to boost domestic demand, focusing on the large consumer sector, and it is recommended to focus on non-bank finance, real estate chain and other sectors. with the changing attitude of foreign investors towards a-shares, the focus on core assets may usher in a revaluation market.

morgan stanley also believes that if retail investor sentiment remains high, there is room for further gains in the chinese stock market. morgan stanley's chiyao huang analyst team pointed out that if retail investors continue to maintain optimism, up to 2 trillion to 3 trillion yuan in chinese household financial assets will be reallocated to the stock market, and brokerage stocks are expected to benefit from this. in addition, the current relatively low margin financing balance also shows that there is room for future growth.