Buybacks, Increased Holdings, and Mergers Spark Enthusiasm: the SSE-listed Companies Forge New Paths to Value Enhancement

Recently, with a series of policies being introduced and implemented, many companies listed on the Shanghai Stock Exchange have strengthened their quality through cash dividends, increased holdings, buybacks, and M&A. This aims to enhance their attractiveness to medium and long-term capital.

As the cornerstone of the capital market, how listed companies can enhance quality and increase investment value is a crucial factor in attracting medium to long-term capital. Starting in February this year, the SSE has seen a wave of enthusiasm for "corporate value and return enhancement", with shareholder increases and company buybacks on the rise. Following the release of the State Council’s Guideline on Strengthening Supervision, Forestalling Risks, and Promoting High-Quality Development of the Capital Market, the SSE has issued a series of guidelines to guide listed companies in fulfilling their market value management responsibilities. It is noted that currently on interactive platforms, investors' inquiries about market value management and how to boost stock prices have significantly increased.

In 2024, the first complete year of increased dividend payouts for A-share listed companies, there has been a positive shift in mid-term dividends. As of now, the SSE has disclosed that 481 companies distributed mid-term dividends for 2024, representing a year-on-year increase of 354%. The total amount of dividends was 574.9 billion yuan, a year-on-year growth of 184%. Meanwhile, buybacks and increased holdings are showing a strong trend. As of December 20, the SSE has disclosed buyback plans of 697 companies this year, with a total upper limit exceeding 111.7 billion yuan, and major shareholders and directors, supervisors, and senior management members of 444 companies have disclosed plans to increase holdings, with an upper limit exceeding 54.5 billion yuan. The total buyback transactions across the SSE amount to nearly 75 billion yuan.

Listed companies are applying M&A to seek external growth, and their execution capacity for enhancing new quality productive forces is also strengthening. It is understood that SSE recently held an "M&A Special Reception Day", receiving on-site consultations from over 20 companies in a day and phone consultations from nearly 200 companies. Since the release of the Opinions on Deepening Market Reform in Mergers and Acquisitions on September 24 (up to December 22), the SSE has introduced 281 new asset acquisition plans, with 34 forming significant asset restructurings, over 80% involving major shareholder investments or industrial mergers, and over 70% with targets in industries like semiconductors, new energy, and high-end equipment manufacturing, which contribute to elevating the quality of listed companies.

From Shanghai Securities News—www.cnstock.com on December 23, 2024

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The above information is provided for reference purposes only and does not constitute investment advice.