A-share market closes | Chinext drops more than 2%, market capitalization management triggers explosion! Stocks trading below book value soar

Today, the market fluctuated and fell, with the Growth Enterprise Market Index plummeting significantly. As of the close, the ChiNext Index fell by more than 2%, while the Shanghai Composite Index fell slightly. Weighted stocks such as banks and real estate were surprisingly active. Looking at the market, stocks trading below their net asset value surged, with banks, steel, and insurance leading the gains. Low-altitude economy concepts saw unusual movements, with Sichuan Jiuzhou directly hitting the limit. Real estate stocks surged and then fell back, with multiple stocks like Financial Street Holdings hitting the limit. Graphite electrode concepts were active, with leading stock Ningbo Shanshan hitting the limit. The AI industry chain underwent significant adjustments, with AI applications and AI language data leading the declines, and companies like Doushen(Beijing) Education & Technology Inc. and Guangdong Insight Brand Marketing Group experiencing significant drops. Huawei concepts continued to decline in the afternoon. Overall, the market saw a slight decrease in trading volume, with over 4100 companies falling in both markets. Specifically, low-altitude economy concepts saw unusual movements, with Sichuan Jiuzhou directly hitting the limit. On the news front, Sun Weiguo, director of the General Aviation Business Department of the China Air Transport Association and chairman of the UAV Working Committee, revealed at the 2024 International Electric Aviation (Kunshan) Forum that the Central Air Traffic Management Commission will soon carry out eVTOL trials in six cities. Interviews with industry insiders revealed that the six pilot cities were preliminarily determined to be Hefei, Hangzhou, Shenzhen, Suzhou, Chengdu, and Chongqing. The trial documents have relevant plans for routes and regions, authorizing some local governments below 600 meters of airspace, meaning that these local governments would have to take on more management responsibilities. Stocks trading below their net asset value collectively surged, with banks, steel, and other sectors leading the gains. On the news front, the China Securities Regulatory Commission recently released the "Listed Company Supervision Guidelines No. 10 Market Value Management". Companies trading below their net asset value for the long term must formulate a plan to improve the valuation of listed companies and disclose it after approval by the board of directors. CITIC Securities believes that the disclosure of the "guidelines" will support dividend stocks, and the coal sector is expected to benefit. In addition, some undervalued and net asset value companies are also worth paying attention to. In terms of individual stocks, there were 1165 gainers, 4120 losers, and 81 stocks remained flat in the two markets. There were a total of 96 stocks hitting the limit up and 106 hitting the limit down. As of the close, the Shanghai Composite Index fell by 0.21% to 3323.85 points, with a turnover of 755.8 billion yuan; the Shenzhen Component Index fell by 1.91% to 10544.02 points, with a turnover of 100.19 billion yuan. The ChiNext Index fell by 2.35% to 2190.95 points. Fund flow Main funds focused on grabbing shares of joint-stock banks, state-owned large banks, and coal mining sectors. The top net inflow stocks for main funds included Wintime Energy, SAIC Motor Corporation, and Industrial and Commercial Bank of China. Highlights review 1. Wu Qing: Accelerate the push for a new round of comprehensive capital market reform and open-up and introduce more pragmatic measures China Securities Regulatory Commission Chairman Wu Qing said at the HKEX Stock Connect 10th Anniversary Summit that the Commission is accelerating the push for a new round of comprehensive capital market reform and opening-up, and will introduce more pragmatic measures in terms of market opening, cross-border investment and financing facilitation, etc. 2. Central Air Traffic Management Commission to conduct eVTOL trials in six cities At the 2024 International Electric Aviation (Kunshan) Forum on November 18, Sun Weiguo, director of the General Aviation Business Department of the China Air Transport Association and chairman of the UAV Working Committee, revealed that the Central Air Traffic Management Commission will conduct eVTOL trials in six cities. Interviews with industry insiders revealed that the six pilot cities were preliminarily determined to be Hefei, Hangzhou, Shenzhen, Suzhou, Chengdu, and Chongqing. The trial documents have relevant plans for routes and regions, authorizing some local governments below 600 meters of airspace, meaning that these local governments would have to take on more management responsibilities. 3. Listed companies in Shanghai and Shenzhen collectively repurchase and increase holdings with the total amount surpassing 34 billion yuan The first phase of the 300 billion yuan repurchase and increased holdings program has exceeded 10%. The latest data shows that listed companies in Shanghai and Shenzhen collectively repurchased and increased their holdings with a total amount exceeding 34 billion yuan. Specifically, Li Jizun, general manager of Shenzhen Stock Exchange, revealed at the HKEX Stock Connect 10th Anniversary Summit today that 69 companies in Shenzhen have already obtained special loans for stock repurchase, totaling 17.8 billion yuan; in Shanghai, as of November 16, a total of 78 announcements were made for stock repurchase using special loans, with 53 repurchase announcements totaling 7.869 billion yuan, and 25 increase holdings announcements totaling 8.405 billion yuan. Future market analysis 1. China Galaxy Securities: Short-term market healthy fluctuations, but sentiment still present China Galaxy Securities pointed out that the A-share market valuation is at a historically moderate level. On one hand, as existing policies are implemented faster and a comprehensive set of new policies are launched, the economic fundamentals are showing signs of improvement. On the other hand, there is significant uncertainty in U.S. policy towards China following the election of President Trump. A-share market is expected to fluctuate upwards in the future, focusing on technology innovation themes based on self-controllable logic and the need for new quality production, as well as the "two new" themes involving large-scale equipment upgrades and old-for-new consumer goods, and continue to favor the dividend sectors with strong hedging properties. 2. Minsheng Securities: Style switch may occur Minsheng Securities pointed out that the A-share market is shifting from speculative trading style to normalization, with the domestic economic recovery weakening the market's speculation on policy expectations and helping the market return to fundamental realities. Physical assets are still preferred, and positive outlook is on energy (crude oil, coal), nonferrous metals (copper, aluminum, gold), and shipping (bulk carriers, oil transportation). Under the debt-to-equity main line, attention is advised on the financial sector (banks, insurance), construction; focus on the return of dividend assets, such as highways, railways, ports, power; trading conditions have room for maneuver and are benefiting from capital goods for Chinese companies going global worth focusing on (machinery, general equipment, specialized equipment, transport equipment). 3. Guotai Junan Securities: Focus on "hard technology" and state-owned enterprise integration Guotai Junan Securities pointed out that with the continuous refinement and implementation of the above policies since 2024, listed companies are on a path of innovation.M&A restructuring enthusiasm is starting to rebound. In this round of M&A restructuring, the institutional arrangements are becoming more friendly, but there is a significant bias in the direction of M&A, with a stronger emphasis on integrating the industrial chain upstream and downstream. Capital market services for "hard technology" innovation and the development of new productive forces are the inherent logic. The high-quality restructuring of state-owned assets in strategic emerging industries is optimistic about enhancing the resilience of the industrial chain and supply chain and the self-reliance of technology in semiconductor and information technology, aerospace and defense, high-end equipment, pharmaceuticals, and other strategic emerging industries. Professional integration in the energy and resources and public services sectors is expected to enhance the country's resource and energy security capabilities, and enhance the core competitiveness of key industries and areas such as new and old energy, backbone networks, and logistics ports.This article is reproduced from "Tencent Self-selected Stocks", edited by GMTEight: Liu Jiayin.