Recently, new regulations on market value management for listed companies have been officially released, aiming to promote a reasonable reflection of the investment value of listed companies based on their quality. Over the past period, several listed companies have successively expressed on investor interaction platforms their intention to actively strengthen market value management and establish market value management systems. Industry insiders believe that the introduction of the new regulations will further guide the concept of value investment, and improve the A-share investment ecosystem, and long-undervalued central and state-owned enterprises are expected to become the leading force in this round of market value management.

Listed companies actively respond to the new regulations

Earlier on November 15th, to further guide listed companies to focus on their investment value and effectively improve investor returns, it was required that listed companies base their efforts on improving company quality, enhancing operational efficiency, and profitability, and legally and compliantly use mergers and acquisitions, equity incentives, employee stock ownership plans, cash dividends, investor relations management, information disclosure, share repurchase, and other methods to promote a reasonable reflection of the investment value of listed companies based on their quality. The responsibilities of relevant parties such as the board of directors, directors, and senior management of listed companies were clarified, and special requirements were made for major index constituent companies to establish market value management systems and for long-term net-breaking companies to disclose valuation enhancement plans. At the same time, it is explicitly prohibited for listed companies to carry out illegal and non-compliant activities in the name of market value management.

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Market value management refers to the strategic management actions taken by listed companies to improve company quality, and enhance company investment value, and shareholder return capabilities. The reporter found that since the "Guidelines" were announced, many listed companies have expressed that they attach great importance to market value management and will actively and legally carry out related work.

For example, Longsoft Technology announced that the company has always attached great importance to quality improvement and market value management work. On the one hand, it will continue to expand and strengthen its main business to improve the company's operational efficiency; on the other hand, it will strengthen communication in the capital market and gradually convey the company's value through performance explanation meetings, research reception, and other means, to protect the interests of investors.

Nanwang Energy Storage responded to investors on the investor relations platform, stating that the company strengthens market value management from both the basic and capital aspects. First, it continuously strengthens operation and management, accelerates business development, enhances the company's value creation ability, and continuously optimizes the company's basic aspects; second, it actively carries out investor relations management, uses capital market tools promptly, and promotes the realization of company value.

Baike Biology recently announced the company's market value management system, proposing that the board of directors should pay attention to the improvement of company quality, set long-term goals for the company's investment value based on current performance and future strategic planning, fully consider the interests and returns of investors in major decision-making on corporate governance, daily operations, mergers and acquisitions, and financing, adhere to prudent operations, avoid blind expansion, and continuously improve the company's investment value. T

he chief economist of Qianhai Open Source Fund said that the essence of market value management is to improve the investment value of listed companies by improving company quality, enhancing operational efficiency and profitability, and legally and compliantly using mergers and acquisitions, equity incentives, employee stock ownership plans, cash dividends, investor relations management, information disclosure, share repurchase, and other methods, to reasonably reflect the quality of listed companies.

The chief economist of Chuanchai Securities said that it will further guide the concept of value investment, promote the market to gradually transform towards value investment, and at the same time enhance market stability to strengthen investors' confidence in the capital market. For listed companies with high efficiency and strong profitability, further optimization of allocation can be made to promote the overall quality improvement of listed companies, and the capital market investment ecosystem will also better reflect the attributes of survival of the fittest. The guidelines also encourage listed companies to carry out more mergers and acquisitions and transformation upgrades, boosting investor confidence.

New regulations improve the A-share investment ecosystem

Investors are the foundation of the market, and listed companies are the basis of the market. In recent years, the China Securities Regulatory Commission (CSRC) has continued to promote the improvement of listed company quality, support and guide listed companies to continuously improve operational efficiency and profitability, improve the quality and transparency of information disclosure, enhance communication and interaction with investors, and comprehensively use dividends, repurchases, and major shareholder increases to enhance investment value. The chairman of the CSRC recently revealed that as of the end of October, A-share listed companies have announced an interim cash dividend of 644.1 billion yuan, and an additional 1,360 repurchase plans have been disclosed, with both the number and amount reaching historical highs.

The new "Nine National Articles" released in April this year clearly stated the promotion of listed companies to enhance investment value. Formulate guidelines for listed company market value management. Study the inclusion of listed company market value management in the internal and external assessment and evaluation system of enterprises. The guide listed companies to legally cancel shares after the repurchase. Encourage listed companies to focus on their main business and comprehensively use mergers and acquisitions, equity incentives, and other methods to improve development quality. Strictly crack down on market manipulation, insider trading, and other illegal and non-compliant behaviors in the name of market value management according to the law. The main index constituent companies that should formulate listed company market value management systems include the China Securities A500, Shanghai and Shenzhen 300, Science and Technology Innovation 50, Science and Technology Innovation 100, ChiNext Index, ChiNext Mid-Cap 200, and Beijing Stock Exchange 50, etc. Huaxin Securities Research pointed out that the above-mentioned main index constituent stocks include a total of 952 listed companies, accounting for 70% of the total market value of A-shares and 64% of the free-floating market value of A-shares, including the core assets of the main broad-based indices of A-shares.

CITIC Construction Investment believes that the release of the market value management regulatory guidelines aims to further implement the requirements of the new "Nine National Articles" to promote the enhancement of investment value by listed companies, and to continue to promote listed companies to enhance communication and interaction with investors, and comprehensively use dividends, repurchases, and major shareholder increases to enhance investment value. It helps to improve the overall quality of listed companies, providing investors with a healthier and more transparent market environment and helps to increase market liquidity and promote the improvement of market activity.

Guotai Junan Research pointed out that with the implementation of the new market value management regulations, the market value management plans of the main constituent stock companies and the valuation enhancement plans of long-term net-breaking companies will also be on the agenda, which will strengthen investors' expectations for listed companies to increase share repurchases. At the same time, the scope of the main constituent stock companies has been further expanded, which will also expand the scope of listed companies taking repurchase measures.

Central and state-owned enterprise valuations become a focus of attention

With the official implementation of the new market value management regulations, central and state-owned enterprises that have long had low valuations have become the focus of market attention. Galaxy Securities Research shows that as of November 15th, among the 5,366 listed companies in A-shares, there are a total of 1,428 state-owned enterprises, accounting for 26.6%; the total market value is about 51 trillion yuan, accounting for 51.8%. In terms of valuation levels, the PE (TTM) valuation of the entire A-share market is 18.49 times, at the 59% percentile level since 2010, and the PB (LF) is 1.57 times, at the 14.11% percentile level since 2010. There is a structural problem of relatively low valuation of state-owned enterprises in the A-share market valuation, with the current PE (TTM) of central enterprises being 11.19 times, and that of state-owned enterprises being 13.23 times.

The institution pointed out that the deepening and upgrading of central and state-owned enterprise reforms, and market value management bring new investment opportunities for central and state-owned enterprises. China's five rounds of central and state-owned enterprise reforms have gradually evolved from delegating power and profit and establishing modern enterprise systems to focusing on improving core competitiveness, optimizing the layout of the state-owned economy, and emphasizing value orientation. Market value management has become an important tool in this round of reforms, aiming to achieve the preservation and appreciation of state-owned assets, improve the valuation and shareholder returns of central and state-owned enterprises, optimize resource allocation, promote the optimization and strengthening of central and state-owned enterprises, and serve the reform and high-quality development needs of the capital market.

Zhongtai Securities also believes that central and state-owned enterprises are the leading force in this round of market value management. The regulatory authorities attach great importance to market value management, on the one hand, to stabilize market valuation, and on the other hand, it is an inevitable requirement for the financial market to "embrace the development of new quality productive forces." In the medium term, central and state-owned enterprises with stable and high dividends and local state-owned enterprises with "net-breaking" market value are the most benefited directions under this round of market value management and merger and acquisition policies.

In fact, since 2024, the market value management assessment expectations involving central and state-owned enterprises have been continuously strengthening. On January 24, the State-owned Assets Supervision and Administration Commission (SASAC) stated that it would "further study the inclusion of market value management in the performance assessment of central enterprise leaders"; on January 26, the CSRC proposed to "promote the inclusion of market value in the assessment and evaluation system of central and state-owned enterprises"; on January 29, SASAC proposed to "fully implement the market value management assessment of listed companies." CITIC Securities stated that under the promotion of multiple policies, SASAC has encouraged listed central and state-owned enterprises to include indicators such as "one profit and five rates" in the performance evaluation system, and with the official release of the market value management guidelines by the CSRC this time, it is expected that the performance, corporate governance, and shareholder returns of listed central and state-owned enterprises will reach a new level.

Huaxin Securities believes that companies with long-term net-breaking have a stronger demand for market value management. According to the new market value management regulations, companies with long-term net breaking should formulate a listed company valuation enhancement plan. Long-term net-breaking refers to the situation where the closing price of a stock is lower than its most recent audited net asset value per share for every trading day for 12 consecutive months. According to statistics, as of November 15th, there are 212 companies with long-term net-breaking in A-shares, accounting for 15% of the total market value of A-shares. In terms of enterprise nature, central state-owned enterprises account for more than 60% of the long-term net-breaking companies; in terms of industry, long-term net-breaking companies are mainly concentrated in banking, real estate, construction decoration, transportation, steel, and other industries.