Sany Heavy Industry's share reform has been fully tradable for three years, and the major shareholders promise not to reduce their holdings at low prices

Beijing Times, June 19Yesterday, Sany Heavy Industry, a fully tradable A-share company, announced that Sany Group, a major shareholder, promised to voluntarily reduce its holdings at a low price within two years. In the case of investors who are not reducing their holdings, and shareholders are ready to sell at any time, the commitment of major shareholders and executives of listed companies not to reduce their holdings has undoubtedly become a rare bright spot in the A-share market that has continued to plummet, and it has also injected a shot in the arm for disheartened investors.

Do not reduce holdings at low prices within two years

Although there have long been rumors in the market that the suspension of Sany Heavy Industry on the 17th may be related to the controlling shareholder's commitment not to reduce its holdings of shares under certain conditions, an announcement it threw out yesterday has still become a bombshell in the market.

Yesterday, Sany Heavy Industry issued an announcement that the major shareholder Sany Group promised to lift the ban on June 17, 2008 more than 518 million shares of Sany Heavy Industry, voluntarily continue to lock up for two years from today, and promised that within two years from June 17, 2008, if the secondary market price of Sany Heavy Industry shares is lower than twice the closing price on June 16, 2008 (that is, 55.76 yuan / share), Sany Group promises not to reduce its holdings of Sany Heavy Industry shares through the secondary market. This good news far exceeded the previous market expectations, Sany Heavy Industry was nearly 20,000 hands after the resumption of trading yesterday, closed at 30.67 yuan / share.

It is understood that in June 2005, Sany Heavy Industry successfully implemented the share reform, becoming the "share reform * 5656 shares" in the two cities, and the company's market value soared from 4.7 billion yuan at the time of the share reform to nearly 30 billion yuan. On June 17 this year, Sany Heavy Industry became the first listed company to achieve full circulation of shares since the share reform. However, in the face of the continuous plunge in the stock market and the pressure of reducing holdings under the condition of full circulation, small and medium-sized investors are increasingly worried about whether major shareholders will reduce their holdings of Sany Heavy Industry shares in large quantities. Sany Heavy Industry's announcement yesterday undoubtedly reassured investors.

Liang Wengen, chairman of Sany Heavy Industry, said: "Sany has no reason to reduce its holdings. Zhao Xiangzhang, secretary of the board of directors of Sany Heavy Industry, said that the major shareholders are fully optimistic about the growth of listed companies, and the original non-tradable part that has been lifted has basically not been reduced. At the same time, he said that although the domestic market is currently sluggish due to the macroeconomic impact, there is no reason for major shareholders to reduce their holdings out of optimism about the industry situation.

Commitment to boost investor confidence

On the day when the company's major shareholders officially obtained the right to circulate, Chairman Liang Wengen and Sany Group issued a commitment announcement, which undoubtedly provided confidence for investors, and at the same time indirectly expressed to the secondary market that the company's stock price was undervalued.

Since mid-May, Sany Heavy Industry's share price has fallen sharply by more than 30%. In the case of the continuous weakening of the market and the loss of investor confidence, the lifting of the ban on a huge number of restricted shares, accounting for 52% of the total share capital, is undoubtedly a huge pressure on the company's stock price and the majority of investors. "Judging from the recent stock price trend, due to the excessive share capital of the lifting of the ban, the market is worried that major shareholders will reduce their holdings in the secondary market, so the company's recent stock price trend is far behind the market. Pledges by major shareholders to reduce their holdings have helped to strengthen investor confidence. Changjiang Securities analysts Huang Zhen and Li Xing pointed out. Wang Weifeng, a consultant of Tianxiang Investment, also said that Sany Heavy Industry's commitment shows the recognition of the company's shareholders for the company's value, and the announcement also indirectly expresses to the secondary market the company's senior management believes that the current stock price is undervalued. At the same time, to a certain extent, this can also reflect the relatively low valuation of the market, and some individual stocks may have shown good investment value.

In the long run, CITIC Securities Machinery Industry Analyst Guo Yaling analysis, despite the unfavorable situation of macroeconomic control and credit crunch, the company's product sales growth rate will fall in the second half of the year, but due to the construction machinery industry in 2008 continued to maintain rapid growth, the company's most products will still have a comprehensive growth rate of 30% or more than 50%.

or large and small non-lifting measures

Three years after the share reform, Sany Heavy Industry ushered in full circulation, which means that the A-share market has also begun to enter a new era of free "disposal" of controlling stakes by controlling shareholders. "With many stocks entering full circulation one after another, it will definitely mean a certain amount of pressure on the current A-share market, because the market has been lacking in financial support." Tianxiang Gu Wang Weifeng said. The commitment of Sany Heavy Industry is aimed at the root cause of the current round of "bear market" and the remaining problem of the share reform - the lifting of the ban.

Wind information statistics show that within this year, more than 70 listed companies will achieve full circulation due to the lifting of all restricted shares of the share reform, and the first to complete the full circulation is basically the listed companies that have entered the share reform pilot and other listed companies that have entered the share reform process earlier. These include Baosteel, Sinochem International and Shenergy, which will achieve full circulation in August, and Zhonghai Development and Sanyou Chemical, which will achieve full circulation in December.

Wang Weifeng pointed out that the increasing number of fully tradable shares will cause certain pressure on the market, and Sany Heavy Work is *5656 fully tradable shares, and its performance has an exemplary effect on the market. At the same time, some market analysts believe that the current situation of Sany Heavy Industry does not have a wide range of representative significance, so the impact of the big non-reduction on the market cannot be underestimated. It remains to be seen whether Sany Heavy Industry's commitment is the beginning of the commitment of major shareholders of other listed companies not to reduce their holdings.

In fact, as one of the 5,656 listed companies in the two cities that have carried out the equity division and share reform, since the restricted tradable shares of Sany Heavy Industry were first lifted on June 19, 2006, the number of shares reduced by the size of the company is only less than 3% of the company's total shares, and the reduction ratio is very low. At the same time, the data shows that, judging from the statistics of the size of the entire Shanghai stock market, in terms of the number of unrestricted shares formed by the share reform, the number of large and small non-reduced shares of Shanghai companies is quite limited as a whole, and the arithmetic average of the proportion of the total number of shares reduced in the total number of transactions is less than 0.5% per month. As the market continues to decline, the willingness to reduce holdings will remain weak in the short term.

Statistics show that since February, the actual number of shares reduced by large and small non-monthly holdings has decreased significantly compared with January, and has remained in a stable state, and the amount of monthly holdings has also "shrunk" significantly compared with January. Among them, most of the companies that have reduced their holdings are either private enterprises that are not sponsors, are good at capital operation, or belong to listed companies with poor performance and overvaluation. (Reporter Ma Lan)