On November 29, the Shanghai Stock Exchange and China Securities Index Co., Ltd. announced the regular adjustment results of the CSI 300, SSE 50, SSE 180, CSI A500 index samples. Chongqing Sokon Industry Group Stock (601127.SH) was included in the four major indices in this round of adjustment, and officially took effect after the market closed on December 13 (Friday).

It is understood that this is the first time Chongqing Sokon Industry Group Stock has been included in the SSE 50 index, making it the only Chongqing company in the current SSE 50 index.

What does this mean for Chongqing Sokon Industry Group Stock?

1. A new important milestone

Being officially included in the CSI 300 and other four major indices is undoubtedly another milestone for Chongqing Sokon Industry Group Stock in the capital markets.

It should be noted that as one of the most representative broad-based indexes in the A-share market, the CSI 300 Index covers approximately 60% of the market cap of the A-share market, providing a good reflection of the overall performance of the A-share market in China. It is not only an important tool for measuring market performance, but also an important reference for asset allocation and investment decisions. At the same time, it serves as the foundation for many financial products such as index funds, futures contracts, etc., and is of great significance for investors' asset allocation and risk management.

Therefore, during the semi-annual regular adjustments, various aspects such as market cap, trading volume, profitability, and business performance of A-share listed companies need to be evaluated, all of which need to meet certain criteria.

The SSE 50 Index selects the top 50 stocks with large market capitalization, good liquidity, and strong representativeness in the Shanghai market as samples, comprehensively reflecting the price performance of a group of high market value companies in the Shanghai market. Its components cover many industry leaders, and its performance to a certain extent also reflects the development trend of the Chinese economy. Therefore, this index holds a pivotal position in the A-share market.

According to this determination, Chongqing Sokon Industry Group Stock meets the requirements in terms of stock stability, liquidity, etc., and its successful inclusion in the CSI 300 index and other four major indices is not unexpected. This undoubtedly represents the market's high recognition of its own business capabilities, performance growth potential, and comprehensive qualifications.

From an investment logic perspective, whether from a short-term or long-term view, it will help enhance its investment value.

In the short term, after being included in indices like the CSI 300 index, passive funds tracking these indices will purchase shares in Chongqing Sokon Industry Group Stock to replicate the index performance, bringing a large amount of passive funds to Chongqing Sokon Industry Group Stock in the short term. At the same time, as a listed company included in the SSE 180 index sample, according to the rules of the Shanghai-Hong Kong Stock Connect, it automatically becomes the target of the Stock Connect. This helps Chongqing Sokon Industry Group Stock directly unlock the inflow channel of northbound funds, making it easier to attract overseas funds and positively impacting its performance in the capital markets.

From a long-term perspective, as a target of the four major indices mentioned above, Chongqing Sokon Industry Group Stock will not only attract more attention and tracking from investors but also have positive effects on the company's business development, financing, and other aspects, enhancing its long-term value.

Second, the performance continues to improve.

Continued strong performance is also a key factor in Chongqing Sokon Industry Group Stock being included in the CSI 300 index and other four major indices.

The growing delivery volume provides Chongqing Sokon Industry Group Stock with continuous room to optimize profitability. In the first three quarters of this year, Chongqing Sokon Industry Group Stock achieved revenue of 106.627 billion yuan, a year-on-year increase of 539.24%. Net income attributable to shareholders of the listed company was 4.038 billion yuan.

In the just concluded mid-November, Chongqing Sokon Industry Group Stock's performance remains impressive. Data shows that Chongqing Sokon Industry Group Stock's new energy autos sales in November reached 0.0368 million units, an increase of 54.58% year-on-year; cumulative sales were 0.3896 million units, a 255.26% year-on-year increase. Among them, Chongqing Sokon Industry Group Stock's auto sales in November were 0.0324 million units, a 59.23% year-on-year increase; cumulative sales were 0.3592 million units, a 377.62% year-on-year increase.

The impressive performance is inseparable from the continuous high research and development investment laid down by chongqing sokon industry group stock's core competitive advantage.

Chongqing Sokon Industry Group Stock's annual research and development investment accounts for over 10% of revenue, with last year's total research and development investment of 4.438 billion yuan, accounting for 12.38% of revenue, a year-on-year growth of 42.90%.

Currently, Chongqing Sokon Industry Group Stock has established a leading position in areas such as three-electric technology, extended-range technology, electronic and electrical architecture, and complete vehicle platform. For instance, at the Guangzhou Auto Show, the next generation Chongqing Sokon Industry Group Stock's super extended-range system was officially launched, which is built on the "Challenger (C2E) Extended Range Architecture" and "RoboREX Smart Control Technology", achieving three industry-leading advantages of quietness, high integration, and high efficiency.

This system, based on the "Challenger (C2E) Extended Range Architecture" and "RoboREX Smart Control Technology", enables intelligent active energy management, with a comprehensive reduction of fuel consumption by 15%, a 90% reduction in extender noise perception, and an actual efficiency of over 3.6 kWh/L, equivalent to over 3.6 degrees of electricity generated per liter of gasoline, reaching the highest level of extender production in the industry.

Leading technology has created Chongqing Sokon Industry Group Stock's strong product strength, driving the Wenjie series to become China's intelligent luxury new energy auto brand, establishing its strong brand power advantage in the high-end vehicle market.

A West Securities research report states that according to Gelanlu Public Account's research, in the first half of 2024, in the Chinese market luxury brand NPS list, AITO Wenjie held the top position, surpassing brands like BBA, Ideal, NIO, etc., with a far-leading 83.7% NPS (Net Promoter Score) recommendation value, far ahead of numerous other luxury brands.

III. Conclusion

Overall, Chongqing Sokon Industry Group Stock has demonstrated a healthy fundamental aspect and a growth trajectory validated by the market, which is not only attractive to short-term funds, but also expected to draw attention and allocation from long-term funds.

In fact, the capital markets had already given positive feedback on the growth potential of Chongqing Sokon Industry Group Stock. Data shows that as of the close of December 2nd, the stock has surged by 75.52% year-to-date, leading the industry. Furthermore, with a string of positive news, in the past six months, Chongqing Sokon Industry Group Stock has received 'hold' ratings from four brokerages and 'buy' recommendations from 23 brokerages, earning favor from investors.

In my opinion, with the official implementation of the regular adjustment plan after the market close on December 13th, Chongqing Sokon Industry Group Stock's liquidity in the A-share market is expected to further improve, which will benefit its subsequent valuation increase. Therefore, we have more reasons to continue to pay attention to Chongqing Sokon Industry Group Stock.