Several listed companies have recently announced project cooperation agreements with the Saudi region; Saudi ETF has risen for two consecutive days; many stocks cooperating with Saudi Arabia are heavyweights in public funds.
On July 17th, Caixin reported (by reporter Wu Yuqi) that after the whirlwind visit to China by the President of the Saudi Public Investment Fund, Rumeitin, Chinese listed companies are actively strengthening cooperation with Saudi Arabia and launching a series of close business contacts.
After the market closed yesterday, the two photovoltaic leading listed companies announced the latest progress of the projects situated in Saudi Arabia, both of which introduced fully-owned subsidiaries of the Saudi Public Investment Fund (PIF), such as Renewable Energy Localization Company (RELC) and Vision Industries Company (VI).
Moreover, many listed companies have announced project cooperation agreements with the Saudi region. The Middle East is gradually becoming a hot destination to attract Chinese companies to expand overseas.
Data shows that as a sovereign wealth fund of Saudi Arabia, the Public Investment Fund (PIF) is not only one of the country's most important institutional investors, but also plays a pivotal role in the global investment field. According to the latest data from the Global SWF, a global sovereign wealth fund research institution, the asset management scale of PIF has reached approximately USD 925 billion, about CNY 672.3 billion. As of March this year, PIF has ranked fifth on the "Global Top 100 Sovereign Wealth Fund" ranking in the Sovereign Fund Research Institute.
Listed companies are setting off a "Saudi craze".
On July 16th, JinkoSolar announced that its wholly-owned subsidiary Jinko ME had signed a shareholders' agreement with PIF's wholly-owned subsidiary RELC and VI, establishing a joint venture company in Saudi Arabia, with each party holding 40% and 20% respectively. The joint venture company will be included in the company's consolidated financial statements.
The announcement showed that in order to actively practice the global development strategy and deepen global customer service capabilities, Jinko ME, PIF's wholly-owned subsidiary RELC, and VI recently signed a shareholders' agreement, establishing a joint venture company in Saudi Arabia to construct a 10GW high-efficiency battery and component project. The total investment of the project is approximately SAR 3.693 billion (approximately USD 0.985 billion), and the joint venture company will be included in the company's consolidated financial statements.
On the same day, TCL Zhonghuan Renewable Energy Technology Co., Ltd. also announced that based on its own technology and advanced manufacturing advantages, it plans to sign a shareholder agreement with VI and RELC, a subsidiary of PIF, to establish a joint venture company and jointly build a 20GW annual production capacity photovoltaic crystal chip project in Saudi Arabia.
The three parties agreed to establish a joint venture company in Saudi Arabia to build an annual production capacity of 20GW photovoltaic crystal chips factory, with a total expected investment of about USD 2.08 billion. TCL Zhonghuan holds 40% of the joint venture company through its wholly-owned subsidiary LumeTech S.A.PTE.LTD. RELC holds 40% of the joint venture company, and VI holds 20%. The business of the joint venture company includes manufacturing, assembly and sales of solar photovoltaic crystals and chips.
In addition to photovoltaic companies, wind power companies are also accelerating their expansion overseas. On the same day, Far East Horizon Technology Group and PIF, VI jointly announced the establishment of a wind power equipment joint venture company in Saudi Arabia, which will localize production and manufacturing of fans and key components, and accelerate the development of new energy in the Middle East.
In addition, the sunshine power supply, a leader in solar power storage, announced on the 15th that it had successfully signed the world's largest energy storage project contract with ALGIHAZ in Saudi Arabia, with a capacity of up to 7.8GWh. The three stations of the project are located in Na.Mushait area in Saudi Arabia, and will be delivered in 2024 and fully capacity will be connected to the grid for operation in 2025, which will effectively improve the stability and reliability of the Saudi power grid and help achieve Saudi Arabia's "2030 Vision".
While new energy companies are speeding up their "going global" efforts, mining and Saudi Arabia are also in intensive cooperation. On July 16th, Hainan Mining announced that it had signed a memorandum of understanding with Agelar Mining to explore the feasibility of jointly building a lithium salt plant project in Saudi Arabia and setting up an industrial fund mainly for lithium resources and new energy metal minerals.
Junda Co and Arctech Solar Holding Co., Ltd. have disclosed their strategic plans to set up production bases in the Middle East. In mid-June, Junda announced that it had signed an "investment intention agreement" with the Oman Investment Agency to invest in building 10GW high-efficiency photovoltaic battery capacity in Oman, with a total investment of approximately USD 0.7 billion. In addition, in April, Arctech Solar entered into a land leasing agreement with Saudi Industrial Cities and Technology Zones Management Bureau to start construction of its second overseas production base, which is expected to have a comprehensive capacity of 3GW after completion and provide strong supply chain support for photovoltaic projects in the Middle East.
Sinolink Securities believes that with the continuous introduction of large-scale projects by governments in the Middle East and the economic benefits brought about by the decline in component prices, it is expected that the demand for photovoltaics in the Middle East will grow rapidly by 2024.
Soochow Securities stated that the addition of production capacity for photovoltaics in multiple links has slowed down, and high-cost backward production capacity has begun to enter the phase of clearing. It is expected that the profits in the 2024Q2 off-season will bottom out, and the head companies will be more resilient. The inverter has shown a turning point in the first half of the year, and the cost advantage of head companies in film and glass has become prominent. It is recommended to pay attention to the head companies of new inverter, component, battery technology, and stable grid of film, glass and auxiliary materials.
Saudi ETF is being favored.
Chinese companies have "entered Saudi Arabia", and Saudi assets have also set off an investment frenzy in China.
On July 16th, the first batch of Saudi ETFs - Huatai Bairui Southern Dongying Saudi ETF and Southern Fund Southern Dongying Saudi ETF were listed in the country and well received. Wind data shows that both ETFs opened high on the first day of listing and closed with a daily limit. The premium rates exceeded 6%, with a total "suction" of 489.6 million yuan on that day. The turnover rate of Southern Fund Southern Dongying Saudi Arabia ETF surpassed 400%, ranking first in the ETF market, and the turnover rate of Huatai Bairui Southern Dongying Saudi Arabia ETF also exceeded 300%.
Today, the enthusiasm for allocation of the two Saudi ETFs surged, and a large amount of funds poured in, continuing the previous day's rise. The turnover rate of Southern Fund Southern Dongying Saudi Arabia ETF reached 91.77% on the same day, and the turnover rate of Huatai Bairui Southern Dongying Saudi Arabia ETF reached 200.63%.
These two Saudi ETFs mainly closely track the FTSE Saudi Arabia Index through the ETF cross-hanging mechanism. As the first batch of Saudi ETFs listed in the country, they not only provide a convenient channel for domestic investors to pay attention to and invest in the Saudi economy, but also become a powerful tool for observing Saudi economic growth.
Industry insiders also pointed out that as the largest economy in the Middle East, Saudi Arabia has attracted widespread attention from Chinese investors since it launched the "2030 Vision" in 2016. Under the guidance of this grand blueprint, Saudi Arabia is actively promoting economic transformation, gradually reducing its dependence on fossil fuels, and committed to building a more diversified and sustainable economic system.
Sungrow Power Supply, JinkoSolar and others are heavyweight stocks in public funds.
Cailian Press reporters found that the aforementioned stocks are also heavyweight stocks in public funds.
As of the end of the second quarter disclosed by the fund, Sungrow Power Supply was held by 47 public funds with a total shareholding of 62.5111 million shares. Yifangda Growth Enterprise ETF held the most, with 29.0294 million shares, and E-Fund Star50 ETF, GF Growth Enterprise ETF, Huaxia Securities Science and Technology Creativity 50 ETF, and Huaxia Growth Enterprise Motion Growth ETF held 5.3685 million shares, 3.825 million shares, 3.3665 million shares, and 2.8041 million shares respectively. In terms of active equity funds, the well-known fund manager Li Yan's Huaxia Blue-chip Core A holds the stock with a holding of 2.1742 million shares.
JinkoSolar currently has only 6 public fund heavyweight holdings. At the end of the second quarter, Huaxia SSE Science and Technology Innovation Board 50 ETF held 247.8428 million shares of JinkoSolar, and other ETFs tracking the SSE Science and Technology Innovation Board 50 index such as E Fund Shanghai Science and Technology Innovation Board 50 ETF, ICBC Credit Suisse Shanghai Science and Technology Innovation Board 50 ETF, and GF Shanghai Science and Technology innovation board 50 ETF all have holdings.
At the end of the first quarter, a total of 44 public funds held heavy positions in JinkoSolar, among which the well-known fund manager Zheng Chengran's GF High-end Manufacturing; Liu Gesong's GF Technology Vanguard, GF Industry Selection Three-Year Holding A, GF Double Engine Upgrade A, GF Innovation Upgrade, and other heavy holdings, with 96.3127 million shares, 76.7804 million shares, 70.5858 million shares, 65.8549 million shares and 34.1614 million shares respectively.
TCL Zhonghuan was also held by 48 public funds at the end of the first quarter, with a total of 101.6801 million shares held, of which Huatai Bairui CSI Photovoltaic Industry ETF, Tianhong CSI Photovoltaic Industry A, Tianhong CSI Photovoltaic Industry ETF, and GF CSI Photovoltaic Industry A and other funds tracking the CSI Photovoltaic Index held more, with 33.2285 million shares, 29.2772 million shares, 6.8686 million shares, and 3.3548 million shares respectively.