On December 20, the Financial Association reported (Reporter Zou Juntao) that last night, Shanghai Pudong Development Bank announced that its largest shareholder, Shanghai International Group Co., Ltd. (hereinafter referred to as "Shanghai International Group"), through its wholly-owned subsidiary, Shanghai State-owned Assets Management Co., Ltd. (hereinafter referred to as "State Asset Management Company"), increased its ordinary shares of the company by 7,575,474 shares through the Shanghai Stock Exchange system's centralized bidding method on December 19, 2024, accounting for 0.03% of the total share capital.

After this Shareholding, the proportion of ordinary shares held by Shanghai International Group and its concerted actors increased from 29.67% to 29.70%.

In addition, Shanghai Pudong Development Bank announced that based on confidence in the company’s future Operation prospects, the State Asset Management Company plans to increase its ordinary shares by no less than 47 million shares and no more than 94 million shares within 6 months starting from December 19, 2024. The increase in quantity includes the shares from the first Shareholding. The State Asset Management Company promises not to reduce its holdings during the implementation period of this Shareholding plan and for 5 years after its completion.

On the evening of December 19, a reporter from Caixin News, based on East Money Information Statistics, discovered that Shanghai International Group had previously increased its Shareholding in Shanghai Pudong Development Bank through the acquisition of shares held by Shanghai Shansi (Group) Co., Ltd. and through private placement, and that the increase through centralized bidding appears to be the first.

On the morning of the 20th, a responsible person from Shanghai Pudong Development Bank confirmed to Financial Association reporters that the largest shareholder International Group is making its first historical Shareholding from the secondary market for the bank.

In addition, the reporter from Caixin News noted that there is currently vigorous discussion in the market regarding the background of Shanghai International Group's active Shareholding in Shanghai Pudong Development Bank. One perspective believes that the current PB of Shanghai Pudong Development Bank is only 0.44, lower than the industry average, indicating that Shanghai Pudong Development Bank clearly has investment value in the market; another perspective argues that it may be to address the issue of Convertible Bonds. It is understood that the 50 billion yuan size of the Shanghai Pudong Development Bank's Convertible Bonds has less than a year until maturity, and as of the end of September this year, the non-converted ratio of this bond reached 99.9972%.

With a PB of only 0.44, officials have stated that they will implement Market Cap management.

In mid-November of this year, the China Securities Regulatory Commission released the "Guidance No. 10 on the Regulation of Listed Companies - Market Value Management" (hereinafter referred to as the "Guidance"). The Guidance clarifies the definition and methods of market value management, defines the responsibilities of related entities (Board of Directors; Chairman and Directors, Senior Management; Board Secretary; Controlling Shareholders, Actual Controllers), and lists a negative list and punitive measures from a legal compliance perspective, specifically proposing concrete requirements for two types of listed companies (main index constituent companies, long-term non-performing companies).

Since the release of the Guidance, some listed banks that have been long-term "non-performing" have begun a new round of Shareholding by shareholders and Directors, including the Bank Of Suzhou, Bank Of Chengdu, and MINSHENG BANK.

The reporter from Financial Associated Press noted that investors had been repeatedly questioning Shanghai Pudong Development Bank on the e-Interaction platform about measures to boost its PB, pointing out that the current PB of Shanghai Pudong Development Bank has dropped to 0.44, far below the banking industry's PB of 0.6.

On December 6 and December 10, Shanghai Pudong Development Bank responded to previous investor inquiries, stating that the company highly values Market Cap management and will actively implement the requirements of the 'Guidelines for Regulating Listed Companies No. 10 - Market Cap Management.' It also mentioned that efforts to enhance Market Cap management continuously to improve the company's investment value and shareholder return capability are underway.

A senior industry insider in Shanghai who wished to remain anonymous told CaiLianShe that their judgment on the logic behind the actions of the international group this time should be similar to the recent efforts made by shareholders and directors of various banks to increase Shareholding, mainly to "maintain market value" and fulfill their responsibilities.

According to data from East Money Information's Choice platform, as of the market close on December 19, the PB of Shanghai Pudong Development Bank was 0.4371, ranking 5th from the bottom among 42 listed banks, slightly higher than Bank Of Zhengzhou, Hua Xia Bank, Bank Of Guiyang, and MINSHENG BANK.

The conversion ratio of Convertible Bonds that have not converted to shares exceeds 99%, and it will face maturity points next year.

Additionally, according to data from East Money Information's Choice platform, Shanghai Pudong Development Bank previously issued 50 billion yuan of Convertible Bonds that began trading on the Shanghai Stock Exchange from November 15, 2019, with the bond's abbreviation being 'Pudong Convertible Bonds' and the bond code '110059.' The maturity date for these bonds is October 28, 2025, and there are currently 312 days remaining until the maturity date (calculated as of December 20).

On October 8, Shanghai Pudong Development Bank released the latest "Announcement on the Results of Convertible Bonds Conversion and Changes in Shares", stating that as of September 30, 2024, a total of 1,422,000 yuan of Shanghai Pudong convertible bonds have been converted into the company's ordinary shares, with a cumulative conversion of 97,210 shares, accounting for 0.0003% of the total number of ordinary shares already issued by the company before the conversion of Shanghai Pudong convertible bonds. The amount of Shanghai Pudong convertible bonds that have not yet been converted is 49,998,578,000 yuan, accounting for 99.9972% of the total issuance of Shanghai Pudong convertible bonds.

Market data shows that as of December 19, the closing price of Shanghai Pudong Development Bank's Convertible Bonds was 108.651 yuan, with a conversion price set at 12.92 yuan, and the current stock price at 9.53 yuan, resulting in a conversion premium of 47.30%. Industry insiders believe that such a high conversion premium may lead to low enthusiasm among bondholders to convert their bonds into shares.

According to the third quarter report data, as of the end of September this year, the core tier one capital adequacy ratio, tier one capital adequacy ratio, and total capital adequacy ratio of Shanghai Pudong Development Bank were 8.42%, 9.60%, and 12.21%, respectively. To enhance the capital adequacy ratio, Shanghai Pudong Development Bank issued two phases of subordinate capital bonds on August 14 and August 16 of this year in the national interbank bond market, "24 Shanghai Pudong Development Bank Subordinated Capital Bond 01A" and "24 Shanghai Pudong Development Bank Subordinated Capital Bond 01B", with a total issuance scale of 40 billion yuan, aimed at supplementing the company's subordinated capital, enhancing the company's operational strength and risk resistance capability, and supporting the steady and healthy development of the Business.