GuShiio.com ① As the market continues to rise, a number of long-term net-breaking stocks are seeking valuation repairs;
② At least 16 companies have released valuation improvement plans this week;
③ The content involves hot spots of market attention such as cash dividends, mergers and acquisitions and reorganizations, sending a positive signal.
Cailian News, February 27 (Reporter Luo Yichen and Liang Xiangcai)As the market continues to rise, a number of long-term net-breaking stocks are seeking valuation repairs. Recently, the A-share market has set off a “valuation improvement craze”. This week alone, at least 16 companies have released valuation improvement plans, covering hot spots such as cash dividends, mergers and acquisitions and reorganizations, sending a positive signal.
February 25 – 27, Gehua Cable (600037.SH), Linggang Shares (600231.SH), Tiandi Yuan (600665.SH), GAC Group (601238.SH), Jinneng Technology (603113.SH), Lansail Medical (002382.SZ), Ningbo Huaxiang (002048.SZ), Huajin Shares (000059.SZ), Wushang Group 16 companies including (000501.SZ), Hegang (000709.SZ), Chuanhua Zhilian (002010.SZ), Rizhao Port (600017.SH), Poly Development (600048.SH), Kangxin New Materials (600076.SH), Yuyuan (600655.SH), China Merchants Port (001872.SZ) have successively disclosed valuation improvement plans.
Most of these companies have long-term stock prices that have been lower than net assets per share, triggering the relevant provisions of the “Guidelines for the Supervision of Listed Companies No. 10-Market Value Management” and need to formulate and disclose valuation improvement plans. If it fails to perform, the CSRC may take measures such as ordering corrections and supervisory interviews.
Despite the strong performance of the market this year, the share prices of net-breaking stocks are still generally depressed. Except for Ningbo Huaxiang, which has been out of a clean state due to the recent surge in share prices, the share prices of other companies are still at low levels. Most of these companies are concentrated in traditional industries such as real estate, steel, and chemicals. The industry’s cyclical nature and low market attention are the main reasons for their long-term low valuations.
Judging from the valuation improvement plan, each company mainly takes the following measures: focusing on its main business, improving quality and efficiency; improving incentive mechanisms; strengthening investor relations management; increasing cash dividends; seeking mergers and acquisitions opportunities; improving the quality of information disclosure, etc. Among them, cash dividends and mergers and acquisitions are the focus of investors ‘attention.
In terms of cash dividends, Linggang Co., Ltd. and Jinneng Technology made it clear: “The proportion of cash dividends has been further increased, and the profits distributed in cash will not be less than 30% of the net profit attributable to shareholders of the listed company in the consolidated statement of the year.” On this basis, Rizhao Port has put forward a higher goal. In 2025, the sum of the company’s planned profits distributed in cash and the company’s repurchase funds will in principle not be less than 35% of the net profit attributable to owners of the parent company achieved in that year.
In addition to increasing the intensity of dividends, increasing the frequency of dividends has also been adopted by some companies. Jinneng Technology stated that it plans to increase the frequency of cash dividends, that is, implement at least one interim dividend on the premise that the distributable profits achieved in the semi-annual or first three quarters are positive. Wushang Group also stated that it will increase the frequency of dividends. If the semi-annual distributable profits and cumulative distributable profits in 2025 are both positive, an interim dividend will be issued.
In addition to increasing shareholder returns, these traditional companies are also seeking restructuring and merger opportunities in order to transform and improve valuations. Shaanxi real estate company Tiandiyuan said that it will focus on the areas of new productivity and consumption upgrading, and expand development space through investment and mergers. In January this year, Tiandi Yuan signed a strategic cooperation agreement with Xi’an High-tech Financial Holding Group, whose assets are involved in “hard technology” industries such as communications, semiconductors, and pharmaceuticals. Ningbo Huaxiang plans to focus on its main business of auto parts and find joint ventures or mergers and acquisitions to acquire key technologies and markets, while divesting assets that drag down performance and enhancing investment value.
According to statistics from Tonghuashun, among the listed companies with a price-to-book ratio of less than 1, listed companies from real estate, steel and other industries account for a relatively high proportion. Among them, 44 of the 95 companies in the real estate industry are in a state of bankruptcy.
