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The concept of "market capitalization management" has been mentioned many times in the National Nine articles released last week.

Article 3 "strict continuous supervision of listed companies" is mentioned.

"promote listed companies to enhance their investment value. Formulate guidelines for the management of market capitalization of listed companies. Study the market capitalization management of listed companies into the internal and external assessment and evaluation system.

Strictly crack down on market manipulation, insider trading and other illegal acts in the name of market value management in accordance with the law. "

At the beginning of this year, SASAC of the State Council first proposed to further study the inclusion of market value management in the business assessment of the heads of central enterprises. Subsequently, SASAC clearly proposed once again to promote the full implementation of the "one enterprise, one policy" assessment and comprehensively promote the market value management assessment of listed companies.

Because the central state-owned enterprises account for a high proportion in the industries related to national security and the lifeline of the national economy, the market value management of the central state-owned enterprises has undoubtedly become the focus of the market after the "Nine articles of the State".

Market capitalization Management and value revaluation of Central State-owned Enterprises

The implementation of market capitalization management is often accompanied by the improvement of corporate governance structure, which helps to build a more healthy and sustainable enterprise growth model. Through market capitalization management, central state-owned enterprises can pay more attention to their intrinsic value and market performance, and enhance their core competitiveness and market value by improving operational efficiency, enhancing profitability, strengthening scientific and technological innovation and other measures.

Market capitalization management requires enterprises to establish positive interaction with investors, reduce information asymmetry and enhance investors' trust and confidence in enterprises through timely and transparent information disclosure, so as to attract more long-term investment.

By increasing the dividend ratio and implementing stock buybacks to convey confidence, stabilize market expectations, reduce stock price fluctuations, and provide a more stable investment environment for investors.

With the deepening of market capitalization management, the market awareness of central state-owned enterprises is expected to improve, which will help to realize the re-evaluation of enterprise value, especially in state-owned enterprises with earlier and deeper strategic emerging industry layouts. Its valuation may have more potential room for improvement.

The theme Investment value of Central Enterprises under the background of "China Special valuation"

From the perspective of value attribute, the "special valuation" is mainly composed of central enterprises, state-owned enterprises and listed companies with special backgrounds in some industries. The business operation of the central government has higher security and stability, and the characteristics of "sustainable management" are more prominent than those of private and other enterprises.

Central state-owned enterprises account for a high proportion of industries related to national security and the lifeline of the national economy, and many of them are necessary to meet domestic demand, such as energy, upstream industrial products, aerospace, finance and other national security industries. Central state-owned enterprises should take more responsibility for national security and should be paid more attention.

SASAC of the State Council said that state-owned enterprises should continue to deepen the transformation of traditional industries, including technological transformation and excellent supply, carrying out action plans for digital transformation of state-owned enterprises, and vigorously promoting the green transformation of traditional industries.

Combined with the development assessment index of the new era, SASAC has been adjusted from "two benefits and four rates" to "one benefit and five rates". The change of this assessment index will help to continuously promote the operation and management ability of state-owned enterprises.

What are the options for investing in central state-owned enterprises?

Central-enterprise win-win ETF (517090), central-enterprise win-win ETF connection (category A: 019259 category C: 019269), tracking FTSE China SOE open win-win index, the index component stocks cover both Shanghai and Shenzhen A-shares and Hong Kong stocks of SOEs listed companies, is the first comprehensive reflection of the overall performance of SOEs in Shanghai, Shenzhen and Hong Kong.

The index selects stocks through indicators such as total operating income, and selects leaders of high-quality state-owned enterprises. Using factor weighting, the share of overseas income and green income are introduced on the basis of stock selection indicators, which fully reflects the degree of opening up, international development and sustainable and high-quality development of central state-owned enterprises.

Hong Kong stock ETF (159519) and Cathay Pacific ETF connection (A: 021044, C: 021045) are Hong Kong stock perspective investment tools under the valuation system with Chinese characteristics. The construction of "valuation system with Chinese characteristics" is expected to make the value reconstruction of high-quality state-owned enterprises become the long-term main line of the market. The new round of state-owned enterprise reform plan is expected to become a catalyst for the repricing of Hong Kong stocks. With the continuous progress of RMB internationalization, Hong Kong stocks are expected to usher in the incremental allocation of offshore RMB funds, which deserves the continuous attention of investors.

Cathay Pacific Central Enterprise Reform Stock Fund (001626) mainly invests in stocks benefiting from the reform of central enterprises, ranking in the top 10% of the same kind in the past year.

(source: Haitong Securities, data as of 2024-3-31. The same kind refers to the open type of active stocks, which is ranked as 89Compact 814. China's funds have been operating for a relatively short time, and past performance does not represent future performance)

Fund manager Zhang Ronghe, who has many years of experience in macro strategy analysis, is an investment manager with a top-down macro perspective. He expects economic growth in the first half of the year to be more than 5%. There is a huge room for repair between this judgment and market expectations. Continue to be optimistic about the performance of the wide-base index represented by the Shanghai and Shenzhen 300, and focus on sectors and leading targets that are strongly related to the economy and interest rates.

When the economic cycle is under pressure, central state-owned enterprises are often able to achieve excess returns because of their strong financing capacity, good cash flow and better competition pattern. In recent years, with the continuous deepening of SASAC's assessment indicators of central state-owned enterprises, more and more emphasis has been placed on assessing the profitability and management quality of central enterprises, and the financial indicators of enterprises have been further improved. With the proposal of the valuation system with Chinese characteristics, the value of central state-owned enterprises is expected to be revalued in the future, and the valuation has room for improvement. On the whole, the central state-owned enterprises have high long-term investment value because of their sound operation and high dividend rate.

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Win-win ETF for Central Enterprises (517090)

Win-win ETF connection between central enterprises (category A: 019259, category C: 019269)

Hong Kong stock state-owned enterprise ETF (159519)

Cathay Pacific Hong Kong shares ETF connection (category A: 02104 category C: 021045)

Cathay Pacific Central Enterprise Reform Stock Fund (001626)

Revaluation embraces the era

Risk Tip: the views of this article are for reference only and do not constitute any investment advice or commitment. The central-enterprise win-win ETF is a stock fund, and its expected return and expected risk level is higher than that of mixed funds, bond funds and money market funds. This fund is an index fund, which mainly adopts a complete replication strategy, and its risk-return characteristics are similar to those of the market portfolio characterized by the underlying index. When the fund invests in Hong Kong stocks, it will face the unique risks caused by the differences in investment environment, investment targets, market system and trading rules under the Hong Kong stock link mechanism. The central-enterprise win-win ETF link is the ETF linked fund, and the target ETF is the stock index fund. Its expected return and expected risk level are theoretically higher than those of mixed funds, bond funds and money market funds. The fund tracks the performance of the underlying index mainly by investing in the target ETF, and has similar risk-return characteristics to the underlying index and the securities market represented by the underlying index. The fund can invest in Hong Kong stocks, which will face unique risks caused by differences in investment environment, investment targets, market systems and trading rules under the Hong Kong stock link mechanism. The win-win ETF of central enterprises and the win-win ETF connection of central enterprises are entirely developed by Cathay Pacific Fund Management Co., Ltd., and are not associated with the London Stock Exchange Group and its subsidiaries (collectively referred to as "LSE Group"), nor are they initiated, endorsed, sold or promoted. FTSE Russell is one of the trademark names of a particular LSE Group company. LSE Group assumes no responsibility for the use of the Fund or basic data by anyone. Hong Kong stock state-owned enterprise ETF belongs to stock fund, and its expected return and risk level are higher than those of mixed fund, bond fund and money market fund in theory. The fund is an index fund, which mainly adopts a complete replication strategy to track the underlying index, and its risk-return characteristics are similar to those of the market portfolio characterized by the underlying index. The fund can invest in Hong Kong stocks, which will face unique risks caused by differences in investment environment, investment targets, market systems and trading rules under the Hong Kong stock link mechanism. The fund can invest in overseas securities markets, exceptSegaarcadegamesIn addition to the general investment risks such as market fluctuation risks similar to those of domestic securities investment funds, the fund is also faced with special investment risks such as exchange rate risks in overseas securities markets. The ETF of Cathay Pacific's state-owned enterprises in Hong Kong is linked to ETF funds, and the target ETF is stock index funds. Its expected return and expected risk level are theoretically higher than those of mixed funds, bond funds and money market funds. The fund tracks the performance of the underlying index mainly by investing in the target ETF, and has similar risk-return characteristics to the underlying index and the securities market represented by the underlying index. The fund can invest in Hong Kong stocks, which will face unique risks caused by differences in investment environment, investment targets, market systems and trading rules under the Hong Kong stock link mechanism. The fund can invest in overseas securities markets, exceptSegaarcadegamesIn addition to the general investment risks such as market fluctuation risks similar to those of domestic securities investment funds, the fund is also faced with special investment risks such as exchange rate risks in overseas securities markets. Cathay Pacific central enterprises are reformed into stock funds, which belong to securities investment funds with higher expected risks and expected returns, and their expected risks and expected returns are higher than those of mixed funds, bond funds and money market funds. If you need to buy relevant fund products, please read the fund legal documents, pay attention to the relevant regulations on investor appropriateness management, do the risk assessment in advance, and buy the fund products that match the risk level according to your own risk tolerance. The fund has risks and needs to be invested with caution.