Hong Kong Stock Market Concept Tracking | Market Value Management Guide officially released! Long-term undervalued stocks are expected to usher in investment opportunities (with concept stocks)

On the evening of November 15th, the China Securities Regulatory Commission (CSRC) released the official version of the "Listed Company Regulation Guidelines No. 10 - Market Value Management", which will be implemented from the date of its announcement. This is an important document specifically focusing on market value management, following the first time market value management was included in the top-level design of the capital market in 2014. The guidelines require long-term companies trading below book value to disclose their valuation improvement plans. Companies with a price-to-book ratio lower than the industry average should provide special explanations on the execution of their valuation improvement plans during their annual performance briefings. Industry insiders pointed out that if these companies utilize the above measures for market value management, it will help boost market confidence, thereby increasing stock prices and shareholder returns. With these requirements in place, long-term undervalued stocks are expected to see a valuation recovery, providing investment opportunities for investors. If these stocks disclose medium to long-term dividend plans, increase dividend frequency, optimize dividend timing, and reasonably increase dividend yields, investors can expect higher cash returns and increased market attention and investment attractiveness for the companies, leading to a valuation recovery and stock price increase. By conducting proper financial planning and reserves, and managing market value through share repurchases, undervalued stocks have the potential to increase earnings per share and push stock prices higher. Industry insiders also advise to pay attention to asset quality, profitability, industry prospects, and avoid blind investment solely based on long-term undervalued status when investing in these stocks. CITIC Securities pointed out that with the implementation of guidelines for market value management and opinions on mergers and acquisitions of listed companies by the CSRC, the policy idea of capital market reform of "1+N" continues. On one hand, the guidelines focus on major index component companies and long-term undervalued companies, considering that the proportion of market value of long-term undervalued companies currently exceeds 20%, it is expected that related companies will accelerate their market value management activities. On the other hand, the guidelines emphasize supporting new quality productivity, industrial integration, and optimizing payment, pricing inclusiveness, and other supporting policies. In combination with the State-owned Assets Supervision and Administration Commission's optimization of the layout of state-owned capital requirements, it is suggested to focus on merger opportunities of central enterprises in new industries. Guotai Junan's strategy team believes that the People's Bank of China's creation of two structural monetary policy tools for the stock market is expected to lower risk assessments for the stock market. The establishment of a special rediscounaimassage for share buyback holdings is of great significance for central enterprises with market value management requirements and stable ROE private blue-chip companies, allowing them to increase their stock holdings. However, considering the requirements on asset-liability ratios, the valuation elasticity of central enterprises trading below book value with small market capitalization may benefit even more. China Securities Co., Ltd. stated that the release of the CSRC's "Listed Company Regulation Guidelines No. 10 - Market Value Management" has made certain optimizations in terms of institutional disclosure, scope of long-term undervalued companies, index selection, regulatory measures, etc. The release and implementation of the market value management guidelines will play a positive role for construction and decoration industry companies with long-term undervalued status, prompting them to use market value management tools to increase their own value and return to a PB ratio of 1. It is recommended to pay attention to construction central enterprises that belong to major index components and long-term undervalued companies. Related concept stocks: China United Network Communications (00762): In the first three quarters of 2024, the group's operating income reached RMB 290.12 billion, an increase of 3.0% year-on-year; EBITDA reached RMB 80.40 billion, an increase of 2.0% year-on-year; pre-tax profit reached RMB 23.55 billion, and earnings attributable to equity holders reached RMB 19.03 billion, an increase of 10.3% year-on-year, maintaining double-digit growth. The communication business has remained stable. The number of mobile users reached 345 million households, with a net increase of 11.23 million households throughout the year, reaching a new high for the same period in nearly 6 years; of which, 286 million households are 5G plan users, with a 5G plan penetration rate reaching 83%, and the user structure continues to improve. The number of IoT connections reached 594 million, with a net increase of nearly 100 million; the number of fixed broadband users reached 121 million households, with a net increase of 7.12 million households throughout the year, maintaining a good development trend. CHINA STATE CON (03311): The unaudited financial data for the nine months ended September 30, 2024, was released. The data shows that the group's revenue was approximately HKD 89.291 billion, and the operating profit was approximately HKD 13.036 billion. In addition, as of September 30, 2024, the group's newly signed contract amount was approximately HKD 167.99 billion, and the uncompleted contract amount was approximately HKD 418.26 billion. CHINA COMM CONS (01800): The performance of new contracts in urban construction and emerging businesses is outstanding, with fast growth in overseas business. In the first nine months of 2024, the company signed new contracts worth 1.280.456 billion yuan, an increase of 9.28% year-on-year. Among them, the new contracts in infrastructure construction, infrastructure design, dredging, and other businesses were 1.149.450 billion yuan, 38.716 billion yuan, 84.209 billion yuan, and 8.081 billion yuan, respectively, a year-on-year increase of +10.04%/+6.74%/+9.28%/ -41.77%. The company has increased its efforts in market development for emerging businesses, achieving new contract amounts of 390 billion yuan in the first three quarters, a year-on-year increase of 27%. New contracts in urban construction within infrastructure construction totaled 612.786 billion yuan, a year-on-year increase of 20.1%. New contracts in overseas areas amounted to 265.162 billion yuan, a year-on-year increase of 24.66%, accounting for approximately 21% of the company's new contract amount. The new contracts in infrastructure construction, infrastructure design, dredging, and other businesses were 258.979 billion yuan, 1.785 billion yuan, 3.5 billion yuan, and 0.898 billion yuan, respectively. AVICHINA (02357):Hong KongThe only aviation high-tech industrial group in the stock market. The company is backed by Aviation Industry Corporation, with the ultimate controlling shareholder being the State-owned Assets Supervision and Administration Commission. Its important subsidiaries include AVICOPTER PLC, Jiangxi Hongdu Aviation Industry, AVIC Airborne Systems, AVIC Jonhon Optronic Technology, among others. In 2022-2023, the company continues to push forward with major asset restructurings, with subsidiary AVIC Electronics planning for a stock swap absorption merger with AVIC Mechatronics; subsidiary AVICOPTER PLC intends to acquire 100% equity of HAIG and Changfei.Je suis dsol, je ne parle pas franais. (I'm sorry, I don't speak French.)