Shenzhen's latest policies aimed at supporting corporate mergers and acquisitions have triggered a unique market rally in the A-share market. The city recently released the “Action Plan for Promoting High-Quality Development of Mergers and Acquisitions (2025-2027)” (referred to as the “Action Plan”). This plan aims for a comprehensive improvement in the quality of listed companies by the end of 2027, breaking through a total market capitalization of 20 trillion yuan for both domestic and overseas listed companies, and nurturing 20 companies with a market cap of 100 billion yuan.
The plan also sets targets for increasing the quantity and quality of mergers and acquisitions, aiming for over 200 completed projects with a total transaction value exceeding 100 billion yuan, while establishing several industry demonstration cases. According to Wind data, as of the latest trading day, a total of 18 publicly listed companies in Shenzhen have market values exceeding 100 billion yuan, while 10 companies are valued over 100 billion Hong Kong dollars in the Hong Kong stock market. Additionally, there are 20 companies with market capitalizations above 50 billion yuan, which are involved in strategic emerging industries like artificial intelligence, robotics, and integrated circuits, showing potential to reach the 100 billion level.
This year, the M&A market in Shenzhen has been heating up. Since the beginning of this year, there have been a total of 414 M&A events involving Shenzhen firms, with 208 completed, including 11 significant merger and reorganization events.
On news of these positive developments, Shenzhen state-owned concept stocks experienced a collective surge. As of the market close on October 23, companies such as 建科院 (China Academy of Building Research), 深水规院 (Shenzhen Water Planning & Design Institute), 广田集团 (Guangtian Group), 特发信息 (TeFa Information Technology), 深赛格 (Shenzhen Saige), 深物业A (Shenzhen Properties A), and 特力A (TeLi Technology) rose by over 10% each, while 沙河股份 (Shahe Co.) saw its year-to-date gains exceed 100%.
Potential stocks nearing the 100 billion market value threshold The “Action Plan” focuses on strategic emerging industries like integrated circuits, artificial intelligence, renewable energy, and biomedicine, and proposes supporting “chain leader” enterprises and leading listed companies in conducting upstream and downstream mergers and acquisitions, aimed at enhancing supply chains and key technological competencies through acquiring quality, unprofitable assets.
It also encourages enterprises to pursue mergers and acquisitions in frontier industries like synthetic biology, intelligent robotics, quantum information, and advanced materials to quickly scale up and achieve breakthroughs in key technologies. In fact, Shenzhen has actively seized opportunities in the new productive forces, from the emergence of artificial intelligence to the rise of humanoid robotics, from innovations in the automotive energy structure to the popularization of intelligent driving, with many Shenzhen enterprises at the forefront.
As per the latest Wind data, among listed companies in the A-share market, Shenzhen harbors three companies valued over one trillion yuan: 工业富联 (Foxconn Industrial Internet), 招商银行 (China Merchants Bank), and 中国平安 (Ping An Insurance). In addition, there are 15 enterprises, including 比亚迪 (BYD) and 立讯精密 (Luxshare Precision), with valuations above 100 billion yuan in the A-share market. The Hong Kong market also counts 10 Shenzhen firms with market caps exceeding 100 billion Hong Kong dollars.
Shenzhen aims to break through a total market capitalization of 20 trillion yuan for all domestic and overseas listed companies by 2027 and to nurture 20 companies to reach the 100 billion level. The question arises: which firms will likely become potential stocks nearing this valuation threshold? The focus on new productive forces and direction of emerging industries is undoubtedly key.
According to Wind data, there are 20 companies in both A-shares and Hong Kong stocks with market values above 50 billion yuan. Among them, 光启技术 (Kuang-Chi Technologies) and 传音控股 (Shenzhen Transsion Holdings) are among the six companies with values exceeding 80 billion yuan, poised for a sprint towards the 100 billion mark.
Additionally, stocks with potential for nearly 100 billion market cap are present across strategic emerging industries. In the artificial intelligence and robotics sector, 优必选 (UBTECH) has secured over 630 million yuan in orders for its Walker series humanoid robots this year—a significant contributor to its current market cap of 57.5 billion yuan, with an increase of over 147% to date.
In the renewable energy and high-end manufacturing sectors, 欣旺达 (Sunwoda) predicts a total shipment of 25.29 GWh in its power battery segment for 2024, ranking 10th globally. In the computing power segment, 英维克 (Shenzhen Envicool Technology) and 协创数据 (Sharetronic Data Technology) have seen increases of over 128% and 104% respectively this year.
In the integrated circuit and semiconductor fields, 江波龙 (Shenzhen Longsys Electronics) remains the world’s second-largest independent memory company, with a market cap exceeding 79 billion yuan, showing a year-on-year gain of over 121%. Additionally, 佰维存储 (Biwin Storage Technology) is preparing to launch its advanced wafer-level packaging project, reaching a recent valuation of 50.2 billion yuan.
These companies average a market capitalization of over 68 billion yuan, forming a crucial reserve for Shenzhen's goal of producing 20 companies with a 100 billion valuation. Industry insiders believe the introduction of this "Action Plan" is expected to further focus on enhancing productive forces and traditional industry transformation and upgrading, thereby accelerating the growth of local Shenzhen stocks.
Collective surge in Shenzhen state-owned concept stocks Along with the aim to cultivate 20 companies with a market value of 100 billion yuan, the "Action Plan" sets a goal to complete over 200 M&A projects, totaling over 100 billion yuan in transactions by the end of 2027, alongside creating several industry demonstration cases.
Since the release of the “Six Measures for Mergers and Acquisitions” last September, Shenzhen's M&A market has continued to heat up this year. According to Wind data, the number of M&A events involving Shenzhen-listed companies is 414 as of the latest disclosure date, with 208 completed and 11 involving major mergers and restructuring, along with 6 ongoing transactions, including杰美特 (Shenzhen Jame Technology) acquiring control of 思腾合力 (Siteng Helit), and 欧菲光 (OFO Technologies) acquiring a 28.2461% stake in 欧菲微电子 (OFO Microelectronics), all centered on strategic corporate planning and industrial synergy.
In June of this year,杰美特 announced it was planning to acquire a controlling stake in思腾合力 in cash, making it a subsidiary post-transaction. Public data show that思腾合力 focuses on high-performance computing and foundational solutions, and is a significant participant in Huawei's Ascend AI ecosystem, as well as an elite partner of NVIDIA.
杰美特 stated that upon completion of this transaction, the listed company would enhance its capacity in computing servers, AI management software, and cloud computing products, using its extensive customer resources and sales channels to diversify product offerings and strengthen technical capabilities.
In October, 亿道信息 disclosed plans to issue shares and pay cash for a controlling stake in朗国科技 (Langguo Technology) and深圳成为信息 (Shenzhen Chengwei Information), while also raising supportive funds. Specific transaction prices remain undetermined, but this is expected to constitute a significant asset restructuring.
亿道信息 notes that post-transaction, they will achieve complementary advantages and deeper synergy with the target company across product forms, technical capabilities, application scenarios, sales channels, and supply chain management. Langguo Technology's technological expertise in interactive control and device connectivity will help the company expand further into niche markets like digital advertising and the Internet of Things.
Moreover, in terms of specific support measures, Shenzhen not only encourages capable private enterprises to engage in mergers and acquisitions based on industrial transformation and upgrading but also accelerates the strategic restructuring and specialization of state-owned enterprises, enhancing the valuation tolerance of state-holding listed companies for light asset technology firms and pioneering new layouts in emerging industries.
Following the announcement of such news, Shenzhen state-owned concept stocks surged collectively. As of the close on October 23, companies like 建科院 rose by 20.02%, 深水规院 by 14.04%, while 广田集团, 特发信息, 深赛格, 深物业A, 特力A surged over 10%. New Era Medical, 深纺织A, 东江环保, and 力合科创 also saw significant increases.
As the second half of the year progresses, Shenzhen state-owned enterprises are ramping up their support initiatives. On October 16, the Shenzhen Semiconductor and Integrated Circuit Industry Investment Fund (also known as the “Semi Fund”) was officially established, with an initial scale of 5 billion yuan and a term of 10 years, focusing on semiconductor equipment, components, and chip design.
On October 21, the Shenzhen Jianyuan Zhengxing Equity Investment Fund was unveiled, with a scale of 7 billion yuan for the AIC industry mother fund, participating in Shenzhen’s “20+8” industrial investment with a focus on artificial intelligence, humanoid robotics, semiconductor and integrated circuits, and new energy materials.
It is reported that by the end of 2024, the total assets of Shenzhen state-owned enterprises are expected to reach 5.1 trillion yuan, an increase of 1.6% from the start of the year. Shenzhen's state-owned capital continues to push for strategic restructuring and specialization, optimizing the layout structure of state-owned capital, with total assets in strategic emerging industries exceeding 460 billion yuan and annual revenue surpassing 170 billion yuan, up 34% and 14% year-on-year, respectively.
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