Investing in stocks means looking at the insightful analyst reports from Jin Qilin, known for their authority, professionalism, timeliness, and comprehensiveness, helping you uncover potential thematic opportunities!
Benefiting from the strong resilience of the Chinese economy, sustained macroeconomic policies, and a stabilization and recovery in the consumer market, the Chinese stock market has seen significant gains this year, with the Shanghai Composite Index rising over 12% and the Shenzhen Component Index increasing nearly 30% in the third quarter. Against this backdrop, overseas funds have intensified their allocation to Chinese assets.
On the evening of October 22, Jiangsu Fasten Company Limited (000890) announced that it has signed a Memorandum of Understanding with BEKAERT STEEL CORD PRODUCTS HONG KONG LIMITED ("Hong Kong BeKaert") to transfer 10% equity stake in China BeKaert Steel Cord Company Limited ("BeKaert Steel Cord") to Hong Kong BeKaert for cash.
Upon completion of this transaction, Jiangsu Fasten will no longer hold any equity interest in BeKaert Steel Cord. Before the transaction, Hong Kong BeKaert held 90% of the target company's equity, and after the completion, the counterparty will hold 100%.
According to disclosures, BeKaert Steel Cord’s revenue target for 2024 is expected to be 1.588 billion yuan, while Jiangsu Fasten's revenue target stands at 312 million yuan, making the revenue target for the 10% stake represent 50.85% of Jiangsu Fasten's total. Jiangsu Fasten stated that this transaction constitutes a major asset restructuring.
QFII New Positions in 18 Stocks Data from Securities Times and Data Treasure shows that as of October 22, QFII appeared in the top ten shareholders list of 37 stocks in their third quarter reports, with a total holding market value of 6.271 billion yuan, among which 13 stocks including Sihuan Electric, China Western Power, and Haida Group have holding values exceeding 100 million yuan.
The report for Sihuan Electric indicated that Morgan Stanley increased its holdings in the third quarter, becoming the company's fifth-largest circulating shareholder, with a holding value of 1.267 billion yuan at period-end. The company recently mentioned in investor surveys that overseas EPC projects are mainly concentrated in Southeast Asia and Africa, and due to local energy construction demands, the order volume has increased this year.
From the perspective of changes in shareholding, QFII established new positions in 18 stocks and increased holdings in 11 while reducing positions in 8 during the third quarter. Among the newly established positions, the end-of-period holding values for PLK Material, China National Materials Technology, and Zhongce Rubber ranked high at 607 million yuan, 499 million yuan, and 462 million yuan, respectively.
This year, QFII has continuously favored technology stocks; among the newly added or increased positions, key stocks in lithium batteries, commercial aerospace, and chip-related sectors have been noted, such as China National Materials Technology and Beidou Technology in the lithium battery sector, Tianyin Electromechanical and Xingwang Yuda in the commercial aerospace sector, and Link-Media Technology and PLK Material in the chip sector.
Recently, several foreign institutions have released reports maintaining optimism about the Chinese stock market. On October 22, Goldman Sachs' equity strategy analysis team stated in a research report that the Chinese stock market is expected to enter a more sustainable upward trend, predicting a rise of about 30% for major indices by the end of 2027, driven primarily by a 12% trend profit growth and a 5%-10% further revaluation potential. Goldman Sachs's bullish view on the slow bull market is based on four major reasons, including the opening of a policy window favorable to the market, accelerated growth of the Chinese economy, the continued undervaluation of the market, and the reallocation of overseas funds to Chinese assets.
Additionally, Morgan Stanley's chief Chinese equity strategist Wang Ying noted that in terms of global investor allocation, the position of Chinese equities remains relatively low. From a long-term perspective, further increases in global investors' holdings of Chinese assets will be an inevitable trend.
QFII and Northbound Funds Increased Holdings in 11 Stocks The Stock Connect is also an important channel for foreign capital increasing its stakes in China's A-shares. According to Data Treasure's statistics, among the stocks newly added or increased by QFII, 11 stocks also received increases from Northbound funds in the third quarter. Notably, PLK Material, Dazhong CNC, and China National Materials Technology saw their shareholding quantities increase by over 400% quarter-on-quarter and were newly established key holdings by QFII in Q3.
The Northbound funds’ holdings of PLK Material surged by 868.82%, making it the second-largest circulating shareholder of the company. Notably, Barclays Bank and UBS entered substantial positions in this stock during the third quarter. PLK Material is known for its chip concept, and its main products include metal soft magnetic powder, metal soft magnetic powder cores, and chip inductors, widely used in photovoltaic power generation, new energy vehicles, charging piles, data centers, and artificial intelligence.
From an industry standpoint, the largest number of stocks in the category of jointly increased positions by foreign capital belonged to the power equipment sector, with three stocks (China Western Power, Shenma Power, Sihuan Electric) all belonging to this subfield of power grid equipment. This year, China's power grid construction has been accelerating, with State Grid reporting over 420 billion yuan in fixed asset investments in the first three quarters, representing a year-on-year increase of 8.1%. For the full year of 2025, the investment scale of State Grid is expected to exceed 650 billion yuan.
Over 70% of Heavily Held Stocks Report Positive Performance Looking at performance, among the 37 QFII heavily held stocks, 25 reported a year-on-year net profit increase in the first three quarters, with Xingwang Yuda turning losses into profits, resulting in an overall positive ratio of over 70%. Among those with year-on-year profit increases, Yongding shares, Guangting Information, and Shengnong Development displayed doubled net profits.
Xingwang Yuda reported a net profit attributable to the parent company of 38 million yuan in the first three quarters, achieving 54 million yuan in the third quarter, both turning around from losses, indicating significant profitability growth compared to the first half of the year. Xingwang Yuda stated on the investor interaction platform that their IMU products can be applied in civilian fields, and the series of fiber optics and MEMS inertial navigation products developed by them are used extensively in various fields and scenarios such as railway inspection, intelligent transportation, robotics, unmanned coal mining machines, and flying skateboards.
Among the companies with year-on-year net profit increases, Yongding shares exhibited the highest growth, with a net profit attributable to the parent company of 329 million yuan in the first three quarters, up 474.3% year-on-year. This significant growth is primarily due to the equity method investment income from the joint venture Dongchang Investment reaching 317 million yuan, a year-on-year increase of 292 million yuan, originating from the disposal of project subsidiary in the real estate business sector by Dongchang Investment.
Note: The information from Data Treasure does not constitute investment advice, and the stock market has risks; investors should exercise caution.
Comments