Can the market value management of central enterprises start to reshape the valuation? Who is more cost-effective?
"Zhongzitou" set off a tide of price limits.
On January 24, the State-owned Assets Supervision and Administration Commission of the State Council said that it would further study the inclusion of market value management in the performance appraisal of the heads of central enterprises, and guide the heads of central enterprises to pay more attention to the market performance of the listed companies they control. In this context, on January 25, the "Zhongzitou" stocks set off a rising tide, which also helped the Shanghai Composite Index close up 3.03% on the same day, successfully recovering 2,900 points.
Who is buying under the collective blowout performance of "Zhongzitou"? Is there a chance next?
Market participants believe that the valuation of the listed companies of the "Zhongzitou" central enterprises is expected to usher in a new round of reshaping under the premise of increasing the supply of the system, but after the sharp rise, we should also beware of the risk of stepping back.
Behind PetroChina's daily limit, northbound funds sold 420 million yuan
According to Great Wisdom VIP data, as of the close of trading on January 25, the Shanghai Composite Index rose 3.03% to 2,906.11 points, the Science and Technology Innovation 50 Index rose 2.07% to 765.79 points, the Shenzhen Component Index rose 2% to 8,856.22 points, and the ChiNext Index rose 1.45% to 1,720.78 points.
From the perspective of the disk, the first stocks broke out across the board, and the Wind Zhongzitou Central Enterprise Concept Index (884992) rose 6.82% throughout the day, and all 130 constituent stocks closed in the red, of which 123 rose by more than 3% and 50 rose by more than 7%.
In terms of individual stocks, nearly 30 stocks such as China Railway Assembly (300374), CITIC Publishing (300788), China Shipbuilding Hanguang (300847), Zhongke Information (300678), and China Aluminum International (601068) rose by more than 10%, and PetroChina (601857) rose again after 8 and a half years.
However, northbound funds have been net outflows from PetroChina for two consecutive days, with a net sale of 420 million yuan on Thursday, ranking first among the top ten traded stocks, and a net sale of 147 million yuan on Wednesday.
For the soaring stocks of "Zhongzitou" central enterprises, the chief investment consultant of a brokerage company in Shanghai told the surging news reporter that it was mainly caused by the combined effect of two factors. The first is the capital side, from the perspective of the disk, the prefix and some central state-owned enterprises are the objects of incremental funds. The second is the news side, requiring central state-owned enterprises to pursue more market value management, and it can be seen that most of the varieties that rose in the market on Wednesday are some central state-owned enterprises.
On January 24, the person in charge of the Property Rights Administration of the State-owned Assets Supervision and Administration Commission of the State Council said at the press conference of the State Council Information Office that he would further study the inclusion of market value management in the performance appraisal of the heads of central enterprises.
"If the plan is finally implemented, it may promote some central enterprises with poor stock prices and low valuations to optimize their capital structure, increase dividends and share buybacks, or increase market value through capital operation. Affected by this, the central enterprise sector has risen sharply in the past two days. Invesco Great Wall Fund said.
The chief investment adviser of the above-mentioned brokerage further pointed out that the market value of A-share central state-owned enterprises accounts for nearly one-third, and if these companies can do a good job in market value management, the stock market will perform well at least in the index of heavyweight stocks.
In addition to the impact of capital and news, the interviewee also pointed out that the current central state-owned enterprises are very cost-effective in terms of valuation, and there are not a few that break the net, but on the other hand, the dividend yield is at a relatively high point, so it has a strong valuation attractiveness.
Among them, in terms of price-to-book ratio, after a round of skyrocketing, nearly 30 constituent stocks in the Wind Zhongzitou Central Enterprise Concept Index are still in a broken state, including China Communications Construction (601800), AVIC Industry and Finance (600705) and COFCO Capital (002423), which rose on Thursday.
In terms of dividend yield, the constituent stocks of Wind Zhongzitou Central Enterprise Concept Index performed outstandingly, among which the dividend yield of COSCO Shipping Holdings (601919) (in the past 12 months, the same below) was as high as 18.97%, and the dividend yields of COFCO Technology, China Shenhua (601088) and COFCO Sugar (600737) reached 9.09%, 7.26% and 6.08% respectively.
In addition, Ping An of China (601318), Sinopec (600028), Bank of China (601988), China CITIC Bank (601998), China Jushi (600176), CNOOC (600938), PetroChina, CITIC Special Steel (000708), China Salt Chemical (600328) and other constituent stocks have dividend yields of more than 5%.
It is reported that high-dividend assets refer to equity assets with high dividend yields, which have the characteristics of stable cash flow, high dividends, low valuation, and mature enterprises, so they are often regarded as "defensive assets" or "quasi-fixed income assets", and often generate excess returns during the market adjustment period.
Although the "Zhongzitou" stocks have collectively soared in the past two trading days, in the past one year, the "Zhongzitou" central enterprise stocks have not only risen by more than 50% of the bull stocks, but also many stocks have fallen prominently.
For example, China Duty Free (601888) has fallen by more than 60% in the past year, and China Software (600765) has fallen by more than 50%. AVIC Heavy Machinery (600765) and CCCC Real Estate (000736) fell by more than 40%. China Rare Earth (000831), China Jushi, Air China (601111), etc., also fell by more than 30%.
The hype of the Dragon and Tiger List is high
In the soaring stocks of central enterprises, which funds are the "main force" to buy?
On the whole, among the top few central enterprise constituents in the Dragon and Tiger list, the top buying seats frequently appear in the floating capital seats.
For example, CITIC Publishing, which had a daily limit on Thursday, traded 91.4859 million yuan in the sales department of the list throughout the day, accounting for 36.75% of the total turnover on the day. Among them, the purchase amount was 53.9933 million yuan, and the selling amount was 37.4925 million yuan, with a total net purchase of 16.5008 million yuan.
Specifically, institutions bought 3.0076 million yuan and sold 19.983 million yuan, with a total net sale of 16.9754 million yuan. In addition, the Beijing branch of Maigao Securities and the Shenzhen branch of Huaxin Securities bought 20.5948 million yuan and 8.8896 million yuan respectively, and the Shenzhen branch of Shenzhen-Hong Kong Stock Connect and Huaxin Securities Shenzhen Branch sold 17.4807 million yuan and 28,900 yuan respectively. The Shenzhen branch of Huaxin Securities is speculated by the market to be a well-known business department of tour capital.
Source: Wind
Another Thursday's "Zhongzitou" stock - Chinalco International's Dragon and Tiger List, the top five trading are dominated by brokerage seats, among which the headquarters of Huatai Securities, which is suspected of being a quantitative private placement trading seat, bought a net of 3.6924 million yuan on the same day, and the special seat for Shanghai-Hong Kong Stock Connect was a net sale of 19.444 billion yuan.
Source: Wind
In addition, China Railway Assembly, China Television Media, China Machine Inspection, China Enterprises, AVIC Industry and Finance, etc., also have well-known tourist capital seats in the top five seats in the purchase amount, and there are institutions in the top five seats in the amount of sales.
Source: Wind
In this regard, some market analysts pointed out that the sense of smell of the investment wind has always been more sensitive, and the investment decision is faster, so the enthusiasm to participate in the speculation is higher. However, while paying attention to individual stocks, investors should carefully read the information of stocks and do not blindly follow the trend of speculation.
The allocation value is still high
After two consecutive days of sharp rises, how sustainable is the market of "Zhongzitou" central enterprise stocks?
Luo Guoqing, fund manager of GF CSI Guoxin Central Enterprises Shareholder Return ETF, believes that the market value management assessment of central enterprises has always been a topic of much concern in the market. From a fundamental point of view, after 2021, the overall profitability of central enterprises has gradually improved, and the current ROE center has been significantly higher than the overall level of all A-shares. In terms of valuation, with the promotion of reform and the improvement of fundamentals, the stocks related to central enterprises are expected to further open up the valuation space.
"On the whole, the valuation of central state-owned enterprises, infrastructure, and state-owned enterprise reform-related sectors is at a low level, and dividends continue to maintain a relatively high level. In the context of economic recovery, the value of central enterprises with high dividends and high cash flow is highlighted, and the cost-effectiveness of allocation is improved. Luo Guoqing said.
The latest report of Shenwan Hongyuan Securities on January 25 pointed out that on November 21, 2022, when Yi Huiman, chairman of the China Securities Regulatory Commission, first proposed the "special valuation", the PE and PB of A-share central enterprises were 9.01 and 0.93 respectively, and as of the latest, the overall PE and PB of central enterprises were 9.80 and 0.95, which were basically the same as at the beginning, and their cost performance was still prominent.
"In addition, since the beginning of 2023, after the State-owned Assets Supervision and Administration Commission updated the assessment system to 'one profit and five rates', it has been clearly stated for the first time that 'the study will include market value management in the performance appraisal of the heads of central enterprises', and use this as a baton to guide listed companies to 'timely convey confidence, stabilize expectations, and increase cash dividends through the application of market-oriented holdings, repurchases and other means. Extremely high margin of safety + expectation of continuous improvement of ROE + policy catalyst of market value, a new round of value revaluation of central enterprises is expected. Shenwan Hongyuan Securities further pointed out.
In terms of allocation, Shenwan Hongyuan Securities recommends that investors pay attention to two types of targets: one is a high-dividend central enterprise, and the other is an absolutely low-valued central enterprise.
"Driven by policy logic + market logic, high-dividend central enterprises are still the best choice for both offense and defense. On the one hand, focusing on value creation and assessing ROE and cash flow, central enterprises have the ability to continue to pay high dividends, and on the other hand, in the process of economic transformation, they need to diversify their financial sources, and the motivation for high dividends of central enterprises is also unprecedentedly high. As a result, the potential level of return for holding high-dividend central enterprises is quite substantial. Shenwan Hongyuan Securities said.
Shenwan Hongyuan Securities further pointed out that on the other hand, there is room for repair of absolutely low valuation of central enterprises. The internal valuation of A-share central enterprises is also differentiated, and the valuation of some central enterprises represented by large buildings is extremely low, with large room for repair. In addition, if the follow-up policy of "incorporating market value management into the assessment" is implemented, such listed companies will be deeply broken, which is also the direction with the strongest market value management momentum and the greatest marginal improvement.
For how to allocate state-owned enterprise stocks under the market value management assessment, Zhongtai Securities Research Report said that the deepening of the reform of state-owned enterprises, the release of the performance of central enterprises, and the superposition of active market value management, may give rise to the dual catalysis of "valuation + performance" of the central state-owned enterprise sector.
Zhongtai Securities further pointed out that in terms of central enterprises, the State-owned Assets Supervision and Administration Commission of the State Council has selected 16 central enterprises as chain length enterprises in two batches, which is not only necessary for the country to maintain the security of the supply chain, but also to reshape the profit pattern of the supply chain, improve the upstream and downstream voice of the central enterprise industrial chain, and achieve high profit growth.
In the future, the owners of the 16 industrial chains of central enterprises will accelerate strategic restructuring and professional integration around the future development plan. Among them, there are three typical representative models worth paying attention to.
The first model is similar to the reform of the pricing mechanism of military products in the military industry. In the future, high-end manufacturing fields such as electronics, computers, and communications may replicate this model.
The second model refers to the increase in market share and profit margin of leading central enterprises due to the strengthening of real estate supervision. This model may be reflected in the pharmaceutical and some public utilities sectors.
The third mode is the telecom operator model. This model can focus on the new energy industry, which is also dominated by private enterprises, and the development of central enterprises such as power in the upstream and downstream of its industrial chain may receive more support in the future.