Supply and Marketing Fair Attracts Second Round of Financial Investors to Boost Business
Recently, the China Securities Regulatory Commission (CSRC) issued the "Opinions on Deepening the Reform of the Mergers and Acquisitions (M&A) and Restructuring Market for Listed Companies," supporting listed companies to transform and upgrade towards strategic emerging industries and future industries. The policy encourages industrial integration, enhances regulatory tolerance, and improves market transaction efficiency. The release of the policy instantly ignited the enthusiasm of the capital market. As of now, the Shanghai Composite Index and the Shenzhen Component Index have continued to rise. The Shanghai Composite Index closed at 3,336.50 points as of September 30, and today (October 8) opened high, successfully standing above 3,500 points.
Against this backdrop, the M&A and restructuring sector has once again been placed at the center of market attention. Several M&A and restructuring concept targets, including Benxi Iron & Steel Plates (000761.SZ), Sunnovo (300765.SZ), China Shipbuilding (600150.SH), Sailing Medical (603716.SH), and Supply and Marketing Corporation (000564.SZ), have shown active market performance. Among them, Supply and Marketing Corporation, which has attracted market attention this year and successfully introduced strategic investors, announced new progress in the introduction of strategic investors. On September 30, Supply and Marketing Corporation announced that it officially introduced the second batch of financial investors, planning to invest about 608 million yuan, continuously supporting the company's subsequent operation and development.
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The market style tends towards long-term investment. The announcement shows that this time Supply and Marketing Corporation introduced the second batch of financial investors, including Tibet Born Asset Management Co., Ltd., Tianjin Hongsheng Jiaming Management Consulting Partnership (Limited Partnership), and New Cooperative Business Chain Group Co., Ltd. They will subscribe to 400 million shares, 34.85 million shares, and 32.9187 million shares of bonus shares at a price of 1.3 yuan per share, totaling 467.7687 million shares, with an investment amount exceeding 608 million yuan. The 450 million bonus shares that were not subscribed this time will be introduced to investors before December 31, 2024, with a subscription price not lower than 1.30 yuan per share. Market analysts believe that since Supply and Marketing Corporation has been a focus of the market and institutions since its bankruptcy restructuring and has been expected by the market, the introduction of the second batch of financial investors by the company this time, in terms of both quantity and scale, is slightly weaker than the previous market expectations.
In fact, since the second half of last year, affected by complex domestic and international market factors, the resource allocation, value discovery, wealth management, and investment functions of the A-share market have been difficult to fully exert. Looking at the entire incremental market environment, taking the listing financing of IPO companies as an example, since the IPO review policy was released on August 27, 2023, a total of 128 companies have been issued and listed in the A-share market in the past year, a decrease of 294 companies year-on-year; in terms of fundraising, the total amount of funds raised reached 93.844 billion yuan, a year-on-year decrease of 80.03%, and the average fundraising amount per IPO stock was about 1.5 billion yuan less, and the investment confidence in the IPO market dropped to an all-time low.
In addition to the reduction in fundraising by IPO companies, the fundraising amount of listed companies through private placements has also been significantly affected by the overall environment. For example, the well-known power transmission and distribution industry leader, China Green Power (000537.SZ), significantly reduced its private placement fundraising amount from the originally planned 5 billion yuan to 1.8 billion yuan; the leading new energy lithium battery company, Contemporary Amperex Technology Co., Limited (CATL) (300750.SZ), reduced its private placement amount from 58.2 billion yuan to 45 billion yuan.
The reporter noticed that the capital market investment environment is also not as expected. Data shows that this year, the number of public funds participating in private placements has decreased by 27 compared to the same period last year, and the total investment by public funds in private placements has been reduced by about 40.641 billion yuan, a year-on-year decline of 67.46%.
Therefore, the phenomenon of not meeting the fundraising expectations when Supply and Marketing Corporation introduced the second batch of financial investors this time is greatly influenced by the current overall investment environment. From the performance of multiple data points, it can be seen that this year's market investment style is no longer biased towards short-term and fast investment, but tends to be more long-term and patient capital investment, especially in the recent layout for revitalizing the stock market.
M&A and restructuring have become the focus. Recently, the development of the capital market has once again received a series of policy supports. On September 24, CSRC Chairman Wu Qing said at a press conference held by the State Council Information Office that the CSRC will focus on "three highlights," that is, highlighting the enhancement of the inherent stability of the capital market, highlighting the service to the recovery and improvement of the real economy and high-quality economic development, and highlighting the protection of the legitimate rights and interests of small and medium investors. Accelerate investment-side reforms, promote the construction of a "long money for long investment" policy system, focus on serving key areas such as new quality production forces, take multiple measures to activate the M&A and restructuring market, and encourage listed companies to integrate their main businesses to grow stronger.Listed companies are the foundation of the market, and state-owned enterprise (SOE) listed companies are particularly the source of market investment value. Enhancing the quality of SOE listed companies and increasing their investment value is an important aspect of capital market reform. For the newly emerged state-owned conglomerate, Supply and Marketing Da Ji, the company has introduced strategic investors, integrated internal resources, divested non-performing assets, and actively expanded into new business areas. Announcements show that in the first half of 2024, the company achieved a revenue of 735 million yuan. Although the net profit attributable to the parent company is still negative, the loss has significantly decreased by 78.15% compared to the same period last year, indicating a clear sign of performance improvement.
With the abundance of cash flow, Supply and Marketing Da Ji is expected to continue to increase investment in business expansion. If the company can successfully achieve synergistic growth in its three main business segments, continuously optimize the existing business structure, and actively explore new growth points, the goal of turning the company's overall performance from loss to profit, which investors are looking forward to, is expected to be achieved in the near future.
In addition to the potential development space of various businesses, the introduction of the second batch of financial investors, including the New Cooperative Business Chain Group Co., Ltd., has also caught my attention. It is already an important subsidiary of the Supply and Marketing system, and this cash injection again reflects the controlling shareholders' firm optimism about the company's future development, even providing more room for imagination. It is understood that New Cooperative Business Chain Group mainly invests in county-level assets, and one of the main development directions of Supply and Marketing Da Ji is to break through the circulation barriers between urban and rural counties. After this financial investment, the two parties may carry out deeper cooperation in circulation channels and business scope, jointly providing support for the economic development and prosperity of county-level areas and rural revitalization.
Furthermore, with the support of policies for corporate mergers and acquisitions as well as industrial integration, Supply and Marketing Da Ji also has the potential expectation of asset injection, which is expected to be released in the second half of the year. At that time, the fundamental improvement of Supply and Marketing Da Ji may usher in a new cycle, and the company is expected to become one of the most potential and investment value listed companies in the capital market.
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