After the previous adjustment, the A-share market has rebounded sharply recently. This turning point is that the State Council Financial Committee meeting stabilized market confidence, and then the China Securities Regulatory Commission mentioned “encouraging listed companies to increase their holdings and repurchase, and guiding fund companies to purchase their own shares.”
The “Daily Economic News” reporter found that more than 40 listed companies have recently announced to repurchase company shares, and many listed companies have subscribed for private equity fund products to buy bottoms.
In this regard, some insiders pointed out that the more repurchase behaviors of listed companies at the bottom of the market, the more they can reflect the demands of listed companies for the current market value management, and the greater the probability of the market bottom.
Industrial capital subscribes for private equity products
The “Daily Economic News” reporter found that more than 40 listed companies have recently announced to repurchase company shares, and many listed companies have subscribed for private equity fund products to buy bottoms.
On the evening of March 21, the Three Gorges Water Conservancy announced that its wholly-owned subsidiary Power Investment Company, as a limited partner, signed the “CICC Qichen II Phase II (Wuxi) Emerging Industry Equity Investment Fund Partnership (Limited Partnership) Limited Partnership Agreement”. The paid-in capital contribution is 150 million yuan, accounting for 11.05% of the current total subscribed capital contribution as of the date of this announcement. The target fund will focus on investing in national strategic emerging industries, with big technology and big medical fields as the key investee industries, and regularly sort out and adjust the key investee sub-sectors to achieve top-down research and layout.
On March 16, Yushun Electronics announced that the company, as a limited partner, invested RMB 27.135 million to subscribe for some new shares of Suzhou Yuanhe Hope Changxin II Venture Capital Partnership (Limited Partnership), and subscribed after accounting for the new shares. 7.80% of the total investment share.
On March 15, Sanmu Group announced that its holding subsidiary Qingdao Yingke Huijin Investment Management Co., Ltd. intends to use its own funds to subscribe for Hangzhou Taifu Yingrui Venture Capital Partnership (Limited Partnership) managed by Yingke Innovation Asset Management Co., Ltd. with no more than 50 million yuan. dollar share.
In fact, more and more listed companies have purchased private equity products in the past two years. The main reasons for purchasing private equity products are to obtain wealth management income and industrial layout. In the structural market in the past few years, some private equity products have achieved very high returns, and the performance of some listed companies has even improved significantly. At the same time, due to the relatively flexible mechanism of private equity funds, some listed companies also conduct business expansion and expansion through private equity products.
For example, on March 15, Lingyi Zhizao announced that Shenzhen Dongfang Liangcai Precision Technology, a wholly-owned subsidiary of the company, signed a partnership agreement with Shanghai Chaoxi Private Equity Fund, etc., and jointly invested in Jiaxing Chaoxi and Hou Equity Investment Partnership. , of which Dongfang Liangcai subscribed for a capital of 31 million as a limited partner, with a capital contribution ratio of 42.4599%.
Now that there is a repurchase trend, will the market have a big bottom?
As the main force of industrial capital, listed companies repurchase shares when the market is sluggish. In 2018, the A-share market also fell endlessly. After the management released good news, there was also a wave of repurchase of listed companies in the A-share market, and the market saw a historical bottom. The recent market is also the same. The policy side has ushered in great benefits. Many listed companies have repurchased their shares. Will the market come out of a big bottom?
In this regard, Hao Xinming, manager of Fangxin Wealth Investment Fund, told reporters, “The repurchase of shares by listed companies shows that industrial capital recognizes the company’s current valuation and future prospects, conveys clear confidence to the market, and plays a certain role in supporting the company’s stock price. There are currently nearly 5,000 listed companies in the A-share market. The more companies that participate in the repurchase, the stronger the positive signal. The stock market has its own operating rules. judge.”
“The decline of the market in the early stage was somewhat irrational, reflecting the lack of market confidence. China’s economy is still relatively resilient. After the impact of geopolitical conflicts and the epidemic subsides, concerns about the economy will gradually ease. The repurchase of shares by listed companies reflects the I am optimistic about the company’s long-term development. The current market position has reached a time when long-term holdings can achieve good returns.” Zhou Yi, a researcher at Banyan Investments, said.
Xia Fengguang, manager of Rongzhi Investment Fund, a subsidiary of private equity Pai Pai.com, believes that “listed companies can repurchase shares with one stone. On the one hand, it responds to policies and enhances investors’ confidence. On the other hand, it helps to optimize market value management. Whether the purchased stock is cancelled or used as stock for future implementation of equity incentives, it will help to improve future performance and enhance the gold content of the listed company’s stock. However, we should also pay attention to the source of funds for the listed company’s repurchase arrangement and the scale of the repurchase. Size. Generally speaking, the repurchase behavior of listed companies at the bottom of the market will increase, and the more repurchase behaviors, the more the listed companies’ demands for the current market value management will be reflected, and the greater the probability of the market bottoming will be.”
Source of cover image: Photo Network_500541179
