Reducing holdings to cool down, more than 70 listed companies in Shenzhen market announced "no reduction"

After Huijin increased its shareholding, A-share listed companies issued relevant announcements such as "early termination of the shareholding reduction plan", "voluntary commitment not to reduce its shareholding" or "extension of the lock-up period" and "repurchase" to send positive signals to the market.

In addition to the Shanghai Main Board and the Science and Technology Innovation Board companies increasing their holdings, more than 70 listed companies in the Shenzhen market also issued relevant announcements last night.

In this regard, some insiders pointed out that the intensive disclosure of relevant announcements by listed companies on voluntary commitments by controlling shareholders, actual controllers, directors, supervisors and senior personnel not to reduce their holdings and extend the lock-up period fully demonstrates the confidence of the "key minority" in the company's development prospects and the recognition of long-term investment value.

Centralized announcements and confidence-building

According to Wind data, at least 71 listed companies in Shenzhen disclosed announcements on shareholders' early termination of their shareholding reduction plans, voluntary commitments not to reduce their holdings and extension of the lock-up period.

Among them, 28 companies announced the early termination of their shareholding reduction plans.

For example, Zhongke Haixun announced that it received the "Notification Letter on the Early Termination of the Share Reduction Plan" issued by Pingdingshan Acoustic, a shareholder holding more than 5% of the shares, and Pingdingshan Acoustics did not reduce its shares in the company by any means during the reduction plan, and its shareholding situation has not changed, and Pingdingshan Acoustics decided to terminate the plan to reduce the company's shares in advance.

Yuanfang Information announced that the company recently received the "Notification Letter on Early Termination of the Share Reduction Plan" issued by Meng Zheng, one of the actual controllers, and Guo Zhijun, a director, respectively, and Meng Zheng and Guo Zhijun both decided to terminate the share reduction plan early.

Maipu Medical announced that the company received the "Notification Letter on Early Termination of the Shareholding Reduction Plan" from Shenzhen Kaiying, a shareholder holding more than 5% of the shares, and Shenzhen Kaiying decided to terminate the shareholding reduction plan in advance.

In addition, 43 companies voluntarily committed to shareholders not to reduce or extend the lock-up period of restricted shares.

For example, Hongda Electronic announced that based on confidence and value judgment in the company's future development, in order to maintain the stability of the capital market, promote the sustainable, stable and healthy development of the company, and safeguard the interests of the majority of investors, the company's controlling shareholder and actual controller promised not to reduce their holdings of the company's shares within six months.

Genesis announced that based on the long-term optimism of the industry and the company's development, the controlling shareholders and their concerted actors promised not to reduce their direct holdings of the company's shares in any form in the next six months.

Xingrong Environment announced that based on confidence in the company's future development prospects and recognition of the long-term investment value, the company's controlling shareholders promised not to reduce their holdings of the company's shares in any way within six months.

CTI announced that based on confidence and value judgment in the company's future development, in order to promote the sustainable, stable and healthy development of the company and safeguard the interests of the majority of investors, the controlling shareholder and actual controller voluntarily promised not to reduce their holdings of the company's shares in any way within six months.

Zhenxin Technology announced that the company recently received a notification letter issued by the company's supervisors, and the company's supervisors decided to terminate the shareholding reduction plan early.

The amount of the reduction is higher than the amount of the increase for a long time

In this regard, some insiders pointed out that the intensive disclosure of relevant announcements by listed companies on voluntary commitments by controlling shareholders, actual controllers, directors, supervisors and senior personnel not to reduce their holdings and extend the lock-up period fully demonstrates the confidence of the "key minority" in the company's development prospects and the recognition of long-term investment value.

Fei Xiaoping, an analyst at Dongguan Securities, pointed out that in recent years, the irrational reduction of holdings by the controlling shareholders and actual controllers of listed companies has not only affected market supply and demand, but also hit investor confidence, which is not conducive to the activity of the capital market. Under normal circumstances, the reduction of holdings by major shareholders of listed companies will be regarded as bearish. This will not only increase the pressure on the company's shares to be sold off, but may also trigger market concerns about the company's performance and operating conditions, which in turn will affect investor confidence and amplify the selling pressure, resulting in a decline in stock prices.

On the contrary, the increase in holdings by shareholders of listed companies is seen as positive news. First, shareholders' overweights convey their optimistic view of the company's prospects, often stimulating market interest in buying and driving stock prices higher. Second, the positive impact of overweighting is not only reflected in the rise in stock prices, but also helps to increase the confidence of external investors in the company and attract more investors to the market. Finally, shareholders' overweighting indicates their willingness to hold the company's shares for a long time relative to short-term speculation, helping to reduce market volatility and improve the company's long-term market acceptance.

According to iFinD data, from January 2007 to August 2023, out of a total of 200 months, only 32 months saw an increase in holdings that exceeded the amount of reduction. Most months show that the overall reduction amount is higher than the increase amount, which may indicate that the major shareholders of listed companies generally prefer to reduce their holdings of stocks rather than increase their holdings.

"In the history of review, the introduction of relevant policies on increasing and reducing holdings occurs more when there is a correction in the market, and the policies are more concentrated in the aspect of increasing holdings, and less ink is paid to reducing holdings. However, from the practical effect, these policies seem to be difficult to change the trend that major shareholders of listed companies generally prefer to reduce their holdings rather than increase their holdings. Fei Xiaoping pointed out.

The reduction of industrial capital has cooled significantly

On the evening of August 27, the CSRC issued new requirements on further regulating the reduction of holdings by relevant parties, clarifying that if a listed company has a broken or net break, or has not paid cash dividends in the past three years, and the cumulative cash dividend amount is less than 30% of the average annual net profit in the past three years, the controlling shareholder and actual controller shall not reduce their holdings of the company's shares through the secondary market, and guide other listed companies to reasonably arrange the pace of reduction according to the market situation; Encourage controlling shareholders, actual controllers and other shareholders to undertake not to reduce their holdings or extend the lock-up period of shares.

On September 26, the two exchanges simultaneously issued the Notice on Further Regulating Matters Related to the Reduction of Shares, clarifying the criteria for breakdown, netting and non-compliance with dividends, clarifying the scope of secondary market reductions, and increasing pre-disclosures for block transactions.

According to incomplete statistics from First Finance and Economics, since August 28, nearly 100 companies in the Shenzhen market have issued announcements related to the early termination of the shareholding reduction plan, nearly 150 companies have voluntarily promised not to reduce their shareholding commitments, and nearly 20 companies have issued announcements that shareholders have extended the lock-up period. For example, Zhifei Biotechnology, Mango Super Media, Sanhuan Group, Shiyuan Shares, Shenhuo Shares, Huafon Chemical, etc.

Wu Kaida, an analyst at Deppon Securities, pointed out that recently, the industrial capital reduction behavior that the market is concerned about has cooled down significantly, and the average daily net reduction scale of industrial capital trading in August was 515 million yuan, which was significantly lower than the 2.096 billion yuan in July, and the net reduction scale in September was significantly lower than the rest of this year. Equity financing has shown a downward trend, and the two financing funds have turned from outflow to inflow in the past month, which to a certain extent hedges the recent continuous outflow from the north.

In addition, as far as the whole year is concerned, according to incomplete statistics from First Finance and Economics, since the beginning of this year, nearly 200 companies in the Shenzhen market have issued announcements related to the early termination of the reduction plan, more than 200 companies have voluntarily promised not to reduce their shareholding commitments, and more than 60 companies have issued announcements that shareholders have extended the lock-up period.

Fei Xiaoping believes that in the short term, the new rules for reducing holdings have positive significance for stabilizing market expectations, improving market liquidity, and alleviating market pressure. In the medium and long term, the new regulations provide important development opportunities for the A-share market, and by standardizing and improving the shareholding reduction system, stakeholders will be more closely connected, a good ecological atmosphere will be created, and the stable development of the capital market will be promoted.