The State-owned Assets Supervision and Administration Commission of the State Council has announced plans to assess market value management as part of the performance evaluation of central state-owned enterprises (SOEs). According to a recent research report by Huatai Securities, the commission’s head stated at a press conference on January 24, 2024, that the inclusion of market value management will guide the heads of central SOEs to focus more on the market performance of the listed companies they control.
The report also highlights the commission’s intention to encourage the use of market-oriented means such as increasing holdings and buybacks to convey confidence, stabilize expectations, and increase cash dividends. This move is seen as a way to improve profitability and investor returns, particularly within the telecom operator sector.
Huatai Securities noted that since 2022, telecom operators have not only increased dividend rates but have also implemented plans for major shareholders to increase their holdings, as well as to launch buybacks and equity incentives. These initiatives are aimed at boosting market confidence in the long-term business development of telecom operators.
The report further suggests that telecom operators, being benchmarks for state-owned enterprises in the technology industry, are expected to benefit from the development of new technologies such as Digital China and AIGC in the long term. As a result, the report recommends paying attention to investment opportunities within the telecom operator sector.
Overall, the assessment of market value management in the performance evaluation of central SOEs is expected to have a significant impact on the market performance of listed companies and the long-term business development of state-owned enterprises.
(Source: Financial Associated Press)