Half a month to marry three A-share listed companies, Middle East Capital opened a new round of sweeping in the Chinese market
Since 2023, the number of Middle East capital investment in Chinese enterprises has exceeded 10, and the amount of investment and financing events involved has exceeded 20 billion yuan.
In just half a month, three listed companies officially announced their "marriage" with Middle East capital. Middle Eastern bigwigs have set off a new round of "sweeping tide" in China.
Since the beginning of this year, Middle East capital has repeatedly allocated Chinese assets in a large manner. In March, Saudi oil giant Saudi Aramco bought Rongsheng Petrochemical (002493. SZ) 10% shares; In June, NIO signed a share subscription agreement with Abu Dhabi investor CYVN Holdings, which made a strategic investment totaling approximately US$1.1 billion. In August, Fengxiang shares (09977. HK) issued an announcement saying that on August 26, the Abu Dhabi Investment Authority, a Middle Eastern sovereign wealth fund, bought nearly 157 million shares of Fengxiang, with an average of HK$1.5132 per share.
According to surging news statistics, as of October 14, the Middle East sovereign wealth fund, represented by the Abu Dhabi Investment Authority and the Kuwait Investment Authority, had invested in 62 A-share listed companies.
Middle East capital frantically "sweeps" in the A-share market
On the evening of October 11, Xiling Power (300733. SZ) disclosed an announcement of the Announcement on the Signing of the Memorandum of Understanding on the Strategic Cooperation Framework.
Xiling Power announced that it signed a Memorandum of Understanding on Strategic Cooperation Framework with Benomir Holding Group Co., Ltd. (hereinafter referred to as "Benomier"), planning to establish a joint venture company to invest 700 million yuan to develop new energy vehicle parts - lightweight subframe and high-efficiency electric scroll compressor. After the successful development of the aforementioned project, the construction of related production lines will be carried out, and the annual output is expected to be 2 million sets of lightweight subframes and 500,000 sets of high-efficiency electric scroll compressors for automobiles. In the future, Benomir will cooperate in-depth with Xiling Power as a strategic investor, including but not limited to subscription of private placement shares, project cooperation, etc.
It is worth noting that Ben Omir is from the Middle East and was established in the Emirate of Abu Dhabi in 2002, with businesses in automotive, tourism, finance, real estate, engineering, services, high-tech, investment and other fields. Just two days before Xiling Power's announcement, that is, on October 9, BAIC Blue Valley (600733. SH) also announced its cooperation with Benomir on the investor relations platform, and the two sides plan to jointly develop the two major Middle Eastern new energy vehicle markets in the United Arab Emirates and Saudi Arabia. At present, Benomir Group has confirmed the purchase of 600 Extreme Foxes as the first order.
Recently, the Middle East institutions sweeping the A-share market include not only Ben Omir, but also Saudi Aramco (Saudi Arabian National Oil Company), which spent a huge amount of 24.6 billion yuan to buy 10% of Rongsheng Petrochemical in March this year, and once again invested in a number of large refining projects.
On the evening of September 27, the private refining and chemical enterprise Dongfang Shenghong (000301. SZ) announced that Saudi Aramco or its affiliates intend to become a strategic investor in Jiangsu Shenghong Petrochemical Industry Group Co., Ltd., a wholly-owned subsidiary of the company, and intends to hold a minority stake in Jiangsu Shenghong; The two parties intend to cooperate in the long-term procurement and supply of crude oil and other raw materials, the sales of chemical and fuel products, and the licensing of high value-added technologies.
In addition, Saudi Aramco disclosed on October 11 that it signed memorandums of understanding with Nanshan Group Co., Ltd., Shandong Energy Group Co., Ltd. and Shandong Yulong Petrochemical Co., Ltd. to facilitate discussions on Saudi Aramco's possible acquisition of a 10% strategic stake in Shandong Yulong Petrochemical Co., Ltd., subject to due diligence, negotiation of transaction documents and necessary regulatory approvals.
Industry insiders believe that Saudi Aramco's "sweeping" in China is not the end but the beginning. Guotai Junan wrote in April "After Saudi Aramco Invests in Prosperity, Where Will the Money in the Middle East Invest?" According to the analysis in the research report, Saudi Aramco's stake in Rongsheng Petrochemical has opened a new chapter in Arab investment in China, and the subsequent "Belt and Road" tenth anniversary will catalyze the further strengthening of Sino-Arab cooperation, and Arab countries will increase investment in China under the motive of industrial diversification and reducing dependence on the US dollar and the United States.
"The sovereign wealth funds of Arab countries are huge in scale, performing investment functions on behalf of the national will, and their investment direction represents the policy orientation of the country to a certain extent." Guotai Junan emphasized, "Arab sovereign investment funds are actively expanding into active management, industrial diversification and emerging markets, and its investment orientation shows that Arab countries mainly focus on industries in energy, advanced manufacturing and finance, especially China-Arab new energy cooperation space is broad and flexible." ”
Middle East Capital has a heavy position in 62 listed companies
More than a decade ago, Middle Eastern capital began to enter the Chinese market. Among them, the Abu Dhabi Investment Authority (ADIA), the world's third largest sovereign wealth fund, obtained QFII qualification in 2009 and began to enter the A-share market, while the world's fourth largest sovereign wealth fund, Kuwait Government Investment Authority (KIA), obtained QFII qualification at the end of 2011. The Paper noted that at present, among the top ten shareholders of A-share listed companies, Middle East capital represented by the Abu Dhabi Investment Authority and the Kuwait Investment Authority frequently appears.
According to Wind data, the 2023 half-year report of listed companies shows that as of the end of the second quarter, Abu Dhabi Investment Authority appeared in the list of the top ten outstanding shareholders of 26 A-share listed companies, with a total holding of 479.62 million shares and a total market value of 7.404 billion yuan; the 10 A-share listed companies with the highest market value were Zijin Mining (601899.SH) and Oriental Yuhong (002271. SZ), Haida Group (002311. SZ), Hengli Hydraulics (601100. SH), Yun Aluminum Co., Ltd. (000807. SZ), Tonghua Dongbao (600867. SH), Beijian New Materials (000786. SZ), Daqo Energy (688303. SH), Yutong Bus (600066. SH), China Jushi (600176. SH）。
Among them, the new stocks purchased by Abu Dhabi Investment Authority in the second quarter of 2023 include 10 A-share companies including Qianhe Weiye, Zijin Mining, Health Yuan, Zhongtian Technology, Shandong Pharmaceutical Glass, Shengxing Shares, Minfa Aluminum, Yun Aluminum Shares, Tongling Nonferrous Metals, and Lens Technology.
At the end of the second quarter, Kuwait Investment Authority appeared in the list of the top ten outstanding shareholders of 36 A-share listed companies, with a total holding of 311.71 million shares and a total market value of 5.618 billion yuan; the 10 A-share listed companies with the highest market value were Sanhua Intelligent Control (002050.SZ) and Hengli Hydraulics (601100. SH), Satellite Chemistry (002648. SZ), Chenguang (603899. SH), Bethany (300957. SZ), Maiwei (300751. SZ), Angel yeast (600298. SH), medium grain flow (603565. SH), Kaiying Network (002517. SZ), CICC Gold (600489. SH）。
Among them, the new stocks purchased by the Kuwait Investment Bureau in the second quarter of this year include Dingtong Technology, Tike Rail, Bethany Shares, China Grain Flow, Chenguang Shares, Tianrun Dairy, CICC Gold, Huajian Group, Kaiying Network, Hisense Home Appliances, and Shengtian Network.
The capital asset allocation in the Middle East is tilted towards China
Not only stocks in the secondary market, The Paper understands that the asset allocation of Middle Eastern sovereign wealth funds in China also includes private equity, bonds and infrastructure construction of "unicorn" companies.
IT Orange data shows that since 2023, the number of Middle East capital investment in Chinese enterprises has exceeded 10, and the amount of investment and financing events involved has exceeded 20 billion yuan.
In addition, in January this year, Shenzhen announced the first introduction of the Middle East sovereign fund Saudi Arabia Fund, and the establishment of Blue Ocean Taiku (Shenzhen) Private Equity Investment Fund Co., Ltd. in China, with the first fund size of more than 1 billion US dollars, will officially enter Shenzhen Xiangmi Lake International Venture Capital Venture Capital District. In February, Yida Capital, a Saudi public investment fund and Alibaba-backed venture capital fund, announced it would raise $1 billion.
However, some insiders believe that the allocation of Middle Eastern sovereign wealth funds to China is "not high enough". Ethan Chan, chairman of ARTE Capital Group, a Hong Kong-based asset manager, previously told mainstream media that a sovereign wealth fund they work with now invests about 7 percent of its entire portfolio in Chinese assets, one-fifth of its investment in the United States. "However, the fund is willing to double its investment in China or even go further." Nicolas Aguzin, head of the Hong Kong Stock Exchange, said large sovereign wealth funds currently invest only 1 to 2 percent of their assets in China, a figure he believes will grow 10-fold.
"In order to seek industrial diversification and relatively get rid of dependence on the US dollar and the United States, Arab countries have a strong incentive to invest abroad, and there is a high probability that they will further increase foreign investment in the future." Under the China-Arab Summit and the Belt and Road Initiative, China will become an important destination for Arab countries' investment, and its marginal elasticity is strong due to the low initial investment base. Guotai Junan said.
CITIC Securities analyzed in an August research report that with the advancement of the industrial upgrading strategy of major economies in the Middle East, it is expected to increase the layout of China's advantageous industries such as new energy and advanced manufacturing, echoing its national development strategy.
According to CITIC Securities, the imagination of "petro RMB" brought about by diplomatic breakthroughs and monetary cooperation is expected to gradually return to China's capital market, or gradually bring about 20 billion yuan of funds per year to A shares and H shares, and is expected to gradually expand in the future.