Recently, the State-owned Assets Supervision and Administration Commission of the State Council and the National Development and Reform Commission jointly introduced policy measures to promote the high-quality development of central enterprises' venture capital funds, support central enterprises in initiating the establishment of venture capital funds, focusing on investing early, small, long-term, and in hard technology. It mentioned the need to improve the evaluation and due diligence exemption mechanism that fits the characteristics of state-owned enterprises for issues such as state-owned venture capital investments being too cautious or unwilling.

Establish a venture capital fund assessment mechanism focusing on functional roles throughout the entire lifecycle, not only to 'do the books' and conduct long-term evaluation of the overall investment portfolio.

It also needs to 'look at the bigger picture', with evaluation focusing on the functional role played, considering elements such as benefits and returns, rather than solely aiming for financial returns.

Galaxy Securities stated that it values the investment value of central SOEs in the process of China's modernization.

Firstly, this round of state-owned enterprise reform aims to enhance core competitiveness and strengthen core functions. The process of central SOEs restructuring and resource integration may accelerate.MergerThe process of restructuring and integrating resources may have accelerated.

Secondly, the market-oriented operation mechanism of centrally-owned state enterprises continues to improve, and by 2025, the universal implementation of bottom performers adjustment and incompetent exit system, the operating level and profit capability are expected to be further enhanced.

Thirdly, under the background of boosting the capital market, the requirement of "market value management" for centrally-owned state enterprises may be strengthened. Centrally-owned state enterprises will pay more attention to the market performance of listed entities, and behaviors such as increasing dividends, timely launching shareholding or repurchase to boost confidence will become more common.

Fourthly, against the backdrop of overseas uncertainties and the transformation of old and new economic drivers domestically, centrally-owned state enterprises will play a leading role in stabilizing growth and expanding investment, providing certainty amidst uncertainty.

Central SOE-related Hong Kong stocks:

Three oil companies: PetroChina, Sinopec, CNOOC;

Three major telecom operators: China Mobile, China Telecom, China Unicom;

Banking sector: ICBC, Agricultural Bank, Construction Bank, Bank of China, etc.;

Brokerage sector: Citic Securities, China Securities Co.,Ltd., etc.;

Transportation sector: CRRC Corporation (01766), China Railway Signal & Communication Corporation (03969), etc.;

Aviation sector: COSCO Shipping Holdings (01919), COSCO Ship Engy (01138), etc.;

Coal sector: China Shenhua Energy (01088)

Aviation sector: Avichina (02357)

Ship sector: CSSC Offshore & Marine Engineering (00317), etc.