"Market value management" has become one of the current focal points of investor attention. Since the China Securities Regulatory Commission (CSRC) publicly solicited opinions on the "Guidance for Listed Companies No. 10 - Market Value Management (Draft for Comments)" (hereinafter referred to as the "Guidance") on September 24th, a batch of stocks trading below their net asset value have seen a rapid increase in their stock prices.

Recently, during the semi-annual performance briefings and investor interaction platforms, many companies have responded to investors' concerns about the company's market value management, indicating that they will improve operational performance and increase dividend returns. Some companies that have been trading below their net asset value for a long time have also revealed that they are urgently studying and formulating market value management plans.

Listed companies take multiple measures to enhance investment value

China Power recently announced that, without affecting the normal operation of the company, the company plans to implement a special dividend using the after-tax investment income from Nanjing Huazhou Daguang Investment Center Partnership (Limited Partnership). The special dividend is proposed to be distributed in cash, with a cash dividend of 0.321 yuan (including tax) per 10 shares to all shareholders. Wind data shows that since its listing in July 2004, China Power has distributed dividends 14 times in total, and this is the company's first special dividend plan. China Power mentioned in the announcement that by implementing this special dividend, it will further boost investor confidence, achieve a positive interaction between the company's development and market value, and is an effective measure for carrying out market value management.

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At present, "market value management" has become a focal point of investor attention. Many listed companies have been asked about related measures during the semi-annual performance briefings held in recent days. Improving operational quality and enhancing dividend returns have become important "entry points" for many companies' market value management.

"The company attaches great importance to market value management work, and is committed to enhancing the company's long-term investment value by creating the company's inherent value, and repaying investors through cash dividends and other means." Foreign Service Holding said at the performance briefing held on October 8th. At the semi-annual performance briefing held at the end of September, Weishi Electronics also stated that the company has always paid great attention to market value management work. First, it consolidates the market value foundation, strives to achieve sustainable and resilient operational performance, and strengthens the confidence of investors to hold for a long time. Second, it does a good job in value transmission, does a good job in information disclosure and investor communication, and protects the legitimate rights and interests of small and medium investors. Third, it strengthens shareholder returns, maintains the continuity of dividend policies, and improves investors' satisfaction with the company's market value management work.

Solar energy was also asked about measures related to central state-owned enterprise market value management and multiple dividends at the semi-annual performance briefing. The company stated that it adheres to standardized operations and continuously improves governance levels; continuously promotes the development of its main business and continuously improves operational quality; strengthens innovation empowerment, and accelerates the cultivation of new quality production capacity; continuously improves the quality of information disclosure, strengthens investor communication, and legally and compliantly conveys the company's value. Subsequently, the company will actively study the feasibility of multiple dividends, enhance the sense of gain for investors, explore the use of various market value maintenance measures in accordance with laws and regulations, and further enhance market recognition.

"The company takes the improvement of operational performance as the foundation of the company's market value management." Fengle Seed Industry clearly stated that the company focuses on improving management levels around the development of the seed industry, including selecting high-quality seed production bases, refining production plans, strengthening process management, ensuring product quality; strengthening the management of parental and germplasm resources; improving seed vitality detection technology to improve detection quality, and other work to improve the company's profitability. It strives to promote the improvement of the company's inherent value with good performance, and create better investment returns for all shareholders.

In recent years, the regulatory authorities have continued to promote the improvement of the quality of listed companies, support and guide listed companies to continuously improve operational efficiency and profitability, enhance the quality and transparency of information disclosure, enhance communication and interaction with investors, and comprehensively use dividends, repurchases, major shareholder increases, and other means to repay investors.

CICC Research pointed out that with the strengthening of policy support for listed companies' market value management, the attention and practice of listed companies in market value management have increased. Listed companies have explored the path of market value management through dividends, repurchases, equity incentives, increases, mergers and acquisitions, and other means. Specifically, the return situation of listed companies in 2023 continued to improve, with the dividend scale of A-shares reaching 2.2 trillion yuan in 2023, and the proportion of dividend-paying companies increased from 64.9% in 2022 to 72.4%. The overall dividend ratio of A-shares increased from 41% in 2022 to 42% in 2023. From the beginning of the year to now (as of September 24th, the same below), the repurchase amount of listed companies reached 138.63 billion yuan, close to the full year of 152.67 billion yuan in 2023. According to the statistics of the announcement date of the plan, a total of 484 A-share listed companies have issued 538 equity incentive plans (excluding plans that have not passed) from the beginning of the year to now, and a total of 632 listed companies have issued 726 equity incentive plan proposals in 2023. From the beginning of the year to now, the scale of secondary market increases by listed company shareholders and executives reached 65.92 billion yuan, and the full-year scale in 2023 was 86.88 billion yuan. From the beginning of the year to now, the completion amount involving listed companies in mergers and acquisitions (bidders, transferors, and targets involving listed companies) reached 415.8 billion yuan, and the full-year scale in 2023 was 1,150.9 billion yuan.Some companies with broken net assets are brewing valuation enhancement plans.

The "Guidance" proposes that companies with long-term broken net assets should formulate and disclose a valuation enhancement plan for listed companies after board of directors review, including objectives, deadlines, and specific measures. The relevant content and measures should be clear, specific, and executable, and should not use expressions that are likely to cause ambiguity or mislead investors. Companies with long-term broken net assets should assess the implementation effect of the valuation enhancement plan at least once a year, and promptly improve it as needed, and disclose it after board of directors review. Companies with long-term broken net assets should provide a special explanation of the execution of the valuation enhancement plan at the annual performance explanation meeting.

Reporters have noticed that some companies with long-term broken net assets are brewing valuation enhancement plans.

"We have also noticed the release of this 'Guidance' and attach great importance to it. The company belongs to the long-term broken net stocks mentioned in the 'Guidance'." Jinko Technology said recently when accepting institutional research, "Usually, in the market, in addition to continuously doing a good job in business management to fulfill performance goals and value communication, there are also positive measures such as increasing holdings, repurchases, increasing dividends, and asset mergers and acquisitions. Specifically, for the company's valuation enhancement plan, we are in the process of studying and formulating it, and will disclose it externally after the board of directors review as stipulated." Jinko Technology further explained that the company has always attached great importance to various aspects of market value management. In the past period, due to market concerns about the long-term stability of green electricity value and green electricity operations, coupled with some objective reasons, the company's stock price was underestimated, deviating significantly from the company's net asset value per share, and did not reflect the company's good development expectations. In the first half of this year, policies supporting the development of new energy have been launched intensively, and it is clear to see the long-term and stable support of the country for the green electricity industry, which to some extent also enhances the market's expectations for the future development of the industry. For many years, the company has been in the leading echelon of private enterprises in the green electricity industry, and believes that with the gradual deepening of power market reform and energy transformation, the value of green electricity and related operating companies, as well as the valuation of the capital market, will usher in a rebound. "Of course, we have also been closely monitoring the current capital market and the company's stock price, and have fully studied and discussed various possible positive measures. We will also formulate and disclose specific plans according to relevant requirements in the future."

Beijing Lier also said on the investor interaction platform recently that the company will actively adopt various methods to carry out the company's market value management work, helping investors to enhance the discovery and recognition of the company's value. "The company will formulate and implement the plan according to relevant regulations."

On the evening of September 27, Beijing Lier announced that based on the confidence in the company's future development and the recognition of the company's value, considering the recent performance of the company's secondary stock market, combined with the company's operating conditions, financial status, and future profitability and development prospects, in order to protect the interests of investors and increase investor confidence, according to relevant regulations, the company plans to repurchase some of the company's shares with its own funds or self-raised funds for the implementation of employee stock ownership plans or equity incentives. The total amount of this repurchase is not less than RMB 100 million (inclusive) and not more than RMB 200 million (inclusive).

"The requirement for valuation enhancement planning of broken net stocks helps on the one hand to reprice undervalued high-quality assets, and on the other hand helps the market to accelerate the process of survival of the fittest." CITIC Construction Investment Research believes that as state-owned listed companies are expected to take the lead in building a complete market value management system, state-owned enterprises with a higher proportion of broken net assets but strong profitability may have room for value revaluation, thus bringing investment opportunities. Companies with long-term broken net assets and poor operations may be quickly cleared by investors after trading due to the increased disclosure requirements under the market value management system, thus achieving the survival of the fittest in the A-share market.

A-share market value management enters a new stage of standardized development.

CICC Research stated that the China Securities Regulatory Commission's release of the draft guidance for listed companies' market value management is the first time the capital market has issued a special system document for listed companies' market value management, marking the official entry of A-share market value management into a new stage of policy support and standardized development.Looking back at the background of the policy introduction, it is not difficult to find that since 2024, the regulatory authorities and market participants have significantly increased their focus on market value management. According to research by CITIC Construction Investment, at the press conference held by the State Council Information Office in January, it was proposed for the first time to include the effectiveness of state-owned enterprise (SOE) market value management in the assessment of responsible persons; in mid-March, the China Securities Regulatory Commission (CSRC) issued the "Opinions on Strengthening the Supervision of Listed Companies (Trial)", proposing to promote listed companies to strengthen market value management and enhance investment value; in April, the new "National Nine Articles" also specifically proposed to formulate guidelines for listed company market value management and study the inclusion of listed company market value management in the enterprise's internal and external assessment and evaluation system; starting in May, many SOE listed companies took the lead in disclosing the "improving quality and efficiency, focusing on returns" action plan; investors also significantly increased the frequency of mentioning "market value management" in investor relations activities. Overall, the release of this "Guidance" complies with regulatory requirements and the demands of various market participants, providing clear guidance for subsequent companies to carry out market value management work.

The institution also pointed out that this year, some listed companies have introduced their own market value management systems ahead of the "Guidance". Comparisons have found that the provisions of these systems on the main responsibilities and obligations are generally consistent with the "Guidance", and market value management has also been linked to assessments. However, none of them mentioned valuation monitoring and early warning mechanisms or measures to protect against significant stock price declines, and establishing such measures would help further restore market confidence. In addition, SOEs have been conducting market value management work the earliest, and index constituent stocks conducting market value management are more effective, so the intersection of the two, the index constituent stocks of SOEs, is expected to become a new benchmark for market value management work, and investors are advised to keep an eye on it.