The State Council Information Office held a press conference on October 12, 2024. Minister of Finance Lan Foan stated that by the end of 2023, the hidden debts included in the national government debt information platform had decreased by 50% from the baseline in 2018. It is planned to significantly increase the debt ceiling at once, swap local governments' existing hidden debts, and increase support to help localities resolve debt risks. This upcoming policy is the most substantial measure of support for debt-to-equity efforts in recent years.

Citic Securities' Chief Economist Ming Ming stated that from the perspective of local debt management, debt-to-equity will be the focus of this round of fiscal policy. At the press conference, the Ministry of Finance plans to significantly increase the debt ceiling at once, and swap local governments' existing hidden debts. This measure will significantly reduce the debt pressure on local governments, which is beneficial for local economic development and to support the "three guarantees."

Related component stock information:

1) Everbright Jiabao

Reason for selection: The company's controlling shareholder is China Everbright Group, with its subsidiary, Everbright Ji'ou Asset Management Company, focusing on non-performing asset business in Zhejiang province.

2) M-Grass Ecology

Reason for selection: Holding 17.2% stake in Inner Mongolia Qingyuan Green Finance Asset Management Co., the main business is acquiring and managing non-performing assets of financial institutions, as well as investment and disposal of non-performing assets.

yusys technologies

Selected reason: On December 20, 2023, the company signed a strategic cooperation agreement with Xiamen Asset Management Co., Ltd., establishing a strategic partnership in the field of personal loan non-performing asset disposal business, creating a benchmark combination of 'finance + technology'.

shanghai jianke

Selected reason: The company's controlling shareholder, Shanghai Guosheng Group's Shanghai Shengrong Industrial Co., Ltd., is engaged in engineering project management, real estate-related non-performing asset disposal, and asset management.

cinda real estate

Selected reason: The company's controlling shareholder, Cinda Investment, is a subsidiary of China Cinda Asset Management Company. Cinda Asset Management's main businesses include non-performing asset operation, investment and asset management business, and financial services, with non-performing asset operation being the company's core business.

dongxing

Selected reason: The company is one of the major listed companies under China's four major state-owned financial asset management companies, Dongfang Asset.

7) Changshu Fengfan Power Equipment

Reason for Selection: The company's controlling subsidiary Fengfan Assets carries out asset mergers and acquisitions and non-performing asset disposal business in related industries

8) Shenzhen Silver Basis Technology

Reason for Selection: The actual controller of the company is China Oriental Asset Management Co., Ltd. China Oriental Asset Management Co., Ltd. has cumulatively managed and disposed various types of non-performing assets of over two trillion yuan, making positive contributions to the stability of the national financial system

9) Zhejiang Orient Financial Holdings Group

Reason for Selection: As a state-owned listed financial holding platform in Zhejiang Province, the company mainly operates various financial and quasi-financial businesses. Zeshang Asset, a local AMC, is a controlling shareholder's holding subsidiary

10) Guangzhou Yuexiu Capital Holdings Group

Reason for Selection: Subsidiary Guangzhou Asset focuses on the core business of non-performing asset management

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