Source: Wind

China's largest financial asset management company, Citic Securities Financial Asset Management Co., Ltd. (referred to as Citic Financial Asset Management, code$CITIC FAMC (02799.HK)$ ), announced on the evening of November 8 that it will further advance the investment allocation plan. The total amount of the new investment plan is as high as 50.3 billion yuan and is used to increase holdings in shares of three listed companies!

Citic Financial Asset Management stated that in recent years, the company has seized market opportunities and carried out a series of investment allocations, achieving positive results. In order to maximize shareholder interests, the company plans to further optimize the investment path on the basis of earlier investments and increase investment efforts.

Increasing holdings in shares of three companies

Citic Financial Asset Management stated in the announcement that the latest investment allocation targets are $CITIC (00267.HK)$ By signing a share transfer agreement, approximately 11.266 billion yuan was further used to purchase 4.88% of Citic's shares.

Citic officially introduced as China's largest comprehensive enterprise. Citic's main business covers finance, resource energy, manufacturing, real estate and infrastructure, engineering contracting, and many other business areas in various industries, operating extensively in domestic and international markets. The company, formerly known as Citic Taifu, completed the acquisition of the vast majority of Citic Group's assets in August 2014 and renamed the company to China Citic Limited.

In the announcement on November 15, 2023, Citic Financial Asset Management purchased 5.01% of Citic's shares for HK$13,626,897,177.3 yuan.

Citic Financial Asset Management also announced a further purchase of up to 26 billion yuan. $BANK OF CHINA (03988.HK)$ Citic Financial Asset Management announced a further purchase of up to 4 billion yuan. $CEB BANK (06818.HK)$ Citic announced a further purchase of up to 4 billion yuan.

Entrusting CSC Trust (as trustee), $CITIC SEC (06030.HK)$ (as advisor), $CSC (06066.HK)$ (as advisor), and $CITIC BANK (00998.HK)$ (as custodian) to establish a single asset service trust with not more than RMB 20 billion for investment.

CSC Financial Asset Management stated that the three transactions are planned to be implemented within 12 months from the date when the single asset service trust scheme is formally approved at the interim shareholders' meeting. If not completed within this period, the company will then perform additional corporate governance procedures as necessary.

Monetary policy and tax bureau policy support.

The '2024 Third Quarter China Monetary Policy Implementation Report' released by the central bank today stated that it is necessary to implement the existing special refinancing tools, promote the facilitation of securities, funds, and insurance companies for stock repurchases, shareholdings, and refinancing to take effect.

The central bank also stated a focus on major national scientific and technological tasks, technology-based small and medium-sized enterprises, and other key areas and weak links, continuously improving the ability, strength, and level of financial support for technological innovation, orderly promoting the implementation of the 'detailed work plan for making solid progress in the field of science and technology finance,' and steadily advancing the construction of the scientific and technological innovation financial reform pilot zone. Optimizing the policy arrangement of carbon emission reduction support tools, establishing and improving the mechanism for providing green financial services for the construction of beautiful China, and continuously promoting the high-quality development of the green bonds market.

According to data released by the State Administration of Taxation on November 9th, in the first three quarters of this year, the major policies supporting technological innovation and the development of the manufacturing industry, such as tax reductions, fee reductions, and tax refunds, have totaled 2086.8 billion yuan.

The State Administration of Taxation stated that policies supporting increased investment in science and technology, technology transfer, the introduction, and training of scientific and technological talents, including the additional tax deductions on R&D expenses, amounted to around 893.7 billion yuan in tax reductions, fee reductions, and tax refunds; policies supporting the high-quality development of the manufacturing industry, including the VAT incrementally deducted by advanced manufacturing enterprises and the retention and refund of VAT, amounted to around 810.7 billion yuan in tax reductions, fee reductions, and tax refunds; policies supporting the cultivation and development of high-tech enterprises and emerging industries, such as the 15% corporate income tax levied on high-tech enterprises and the exemption from vehicle purchase tax for new energy vehicles, amounted to around 302.5 billion yuan in tax reductions; policies supporting equipment upgrades and technological transformations, such as the one-time pre-tax deduction for purchasing equipment and tools below 5 million yuan, amounted to around 80 billion yuan in tax reductions.

Institutions: Bull market entering the second phase.

At the moment when many supportive policies are being introduced,$SSE Composite Index (000001.SH)$Approaching 3500 points. Institutions believe that the bull market has entered the second stage.

Futoshi Securities research report stated that the slow bull market has entered the second stage, the long road is also bright, emphasizing 'taking control of the situation.' Firm policy confidence, lowering slope expectations: the overall amount of policies is sufficient, but the approach to implementation is moderate and gradual. The most significant difference in this fiscal policy's effectiveness may lie in the 'rapid effectiveness' policy, making the consumption-oriented policies in this 'stabilizing growth' policy potentially the most significantly increased.

The institution mentioned that in the second stage of the bull market strategy review, high price-to-book ratios, high P/E ratios, high-priced stocks, and outstanding performance of outstanding stocks. In the second phase of the bull market: stock prices return to fundamentals, no need to fear excessive highs.

China Great Wall Securities research report stated that current external uncertainties are basically resolved. Increasing the local government debt ceiling by 6 trillion yuan, all allocated as debt ceiling, is expected to release local fiscal space, facilitate fund circulation, and enhance development momentum. In terms of allocation, it is recommended to focus primarily on the following three main points: first, fiscal stimuli directly benefit debt-to-equity conversions in real estate, cyclical industry chains, and industries mainly revolving around domestic demand. Second, further U.S. technology restrictions will accelerate breakthroughs in our country's key controllable areas. Third, geopolitical uncertainties may directly lead to valuation increases in military-related industries.

Editor/Rocky