Surging Increase in Share Repurchases, Searching for the Anchor of Value in CHINA RISUN GP (01907)

Since the fourth quarter, along with the improvement in macroeconomic expectations and continuous tightening of supply, as well as the rush to complete projects before the end of the year, which stimulated the demand for steel mills, the atmosphere of coking coal price increases has become increasingly prominent. The coking coal spot market has warmed up, and at the same time, related concept stocks in the capital market have frequently released positive news. Taking CHINA RISUN GP (01907) as an observation object, it is noted that the company has been continuously buying back shares recently, and the major shareholder of the company is also actively increasing its shareholding. All signs may point to the fact that the current stock price of Shun Yang Group is severely undervalued by the market. The "golden bottom" of increase in holdings and stock buybacks As 2023 is approaching, the price trend of the black sector has experienced ups and downs due to various internal and external factors. Take coking coal as an example, affected by weak downstream demand and compressed steel mill profits, there has been negative feedback on the price of raw materials, and coking coal prices have experienced multiple rounds of increases and decreases this year. During the industry adjustment period, the performance and stock prices of related companies have faced certain challenges. Taking Shun Yang Group as an example, based on the monthly K-line chart, the company's stock price has been in a downward trend for several months, and has already given back most of its gains for the year. However, as the saying goes, "spring river water warms ducks first". Although investors in the secondary market remain cautious and wait-and-see, Shun Yang Group has been vigorously buying back shares against the trend. As of the close of November 14th, Shun Yang Group has been buying back shares continuously for five trading days. According to statistics, from November 8th to 14th, Shun Yang Group spent over HKD 13 million to repurchase approximately 4.21 million shares. Similarly, since September of this year, major shareholders of Shun Yang Group have started to increase their holdings on a large scale, which is also a positive signal to the outside world. According to statistics, from September to now, Texson Limited, the controlling shareholder of Shun Yang Group, and Yang Xuegang, the chairman and CEO of the company, have cumulatively increased their holdings of 8.211 million shares in 13 trading days. The firm attitude of major shareholders in increasing their holdings of their own company's shares is nothing more than their full confidence in the future development of the company. Currently, as the macroeconomic situation is still in the process of recovery, the performance of the stock market, which is regarded as an economic "barometer," will inevitably fluctuate. The trend of the black sector, as a cyclical industry, is mainly characterized by consolidation, which also indicates that market sentiment is still heavy with caution. In contrast, the major shareholders of Shun Yang Group and the "key figures" of the company, as insiders, have more intuitive and profound understanding of the price trend of products and the industry's current cycle. Therefore, their grasp of the company's value will be more accurate than that of external investors. Based on this, when major shareholders continue to increase their holdings, it often means that the company's stock price is significantly undervalued, and investors may need to pay full attention to relevant investment opportunities. In addition, looking at the movement of Southbound funds, it is also evidence that active funds in the market are actively increasing their holdings of Shun Yang Group at lows. Public data shows that in the past 60 trading days, the proportion of Shun Yang Group's shares held by the Hong Kong Stock Connect has increased from 6.28% to 7.01% after the close on November 13th, showing a significant upward trend and signs of further acceleration. Improved fundamentals for coking coal's price increase In just a few months, Shun Yang Group has continuously received increased holdings from major shareholders, and the company itself has been continuously buying back shares. So how is the prosperity of the coking coal industry behind this? First of all, looking at the macro environment, positive policies have been frequently announced in the past period, leading to a generally improved market expectation. Earlier, the central government announced that it will issue an additional CNY 1 trillion 2023 national debt in the fourth quarter of this year as a special national debt management measure. At the same time, the national fiscal deficit has increased from CNY 3.88 trillion to CNY 4.88 trillion, and the expected deficit ratio has increased from 3% to 3.8%. On the other hand, the "early issuance" of new special bonds also indicates a signal of increased investment. According to the decision of the Standing Committee of the 14th National People's Congress, the State Council is authorized to distribute the new local government debt limits for the next year in advance. This further indicates that fiscal policy has significantly loosened, and it can be expected that the tight funding situation for infrastructure projects will be alleviated, which will in turn benefit the recovery of demand for black commodites. As for the coking coal industry specifically, positive news has been reported recently on both the supply and demand sides. On the supply side, as of October 20th, Shanxi Province had shut down 7.8 million tons of 4.3-meter coke oven capacity. The overall capacity utilization rate of coking enterprises has declined. According to an emergency notice issued by Shanxi Province in late September, it requires the complete shutdown of 4.3-meter coke ovens by the end of October. With Shanxi Province comprehensively phasing out 4.3-meter coke ovens, the trend of coking coal supply reduction will be further strengthened. As for the demand side, on the one hand, nearing the end of the year, the rush to complete projects exists, which is expected to boost short-term demand for coking coal; on the other hand, given the continuous policy efforts, the medium-term outlook for infrastructure spending will improve marginally, providing strong support for the demand for coking coal. In summary, against the backdrop of favorable policies, there are positive signs on both the supply and demand sides of the coking coal industry, which also means that the turning point in the performance of coking coal companies, represented by Shun Yang Group, may occur within this year. In addition, it is worth mentioning that Shun Yang Group's own endogenous growth logic is constantly strengthening. Domestically, Shunyang Zhongran's newly built annual output of 3.6 million tons of coking project has been fully put into operation in June of this year, and the Pingxiang production base is also expected to be completed by the end of next year or early 2025. At that time, the base will have the capacity to produce 1.8 million tons of coking coal annually. Internationally, the initial 1.6 million tons of coking coal production capacity in the Indonesian Sulawesi Park's annual capacity of 4.8 million tons of coking project has been put into operation. In addition to the continuous expansion of traditional core business capacity, at the same time, Shun Yang Group is also vigorously developing the imaginative hydrogen energy business in five aspects: production, storage, transportation, hydrogenation, and high-purity hydrogen gas applications, expanding the industrial "moat". Perhaps it is precisely because the market's expectation of the stability and recovery of Shun Yang Group's fundamentals continues to strengthen and the growth potential is being realized orderly that the wave of increased holdings and buybacks keep emerging. With Shun Yang Group and its major shareholders as representatives, the coking coal industry may see a turning point in performance within this year.The "reverse" operation of shareholders serves as a reference point, and at this stage, ordinary investors may be able to appropriately increase risk preference.Please provide the text that you would like to be translated into English.