Two centrally-administered state-owned enterprises deploy 60 billion yuan in A-share market, with trillion-yield insurance funds taking over to maintain a bullish outlook

Stabilizing the capital market has become a top-down policy orientation. A multi-level counter-cyclical regulation system covering policy tools, state-owned capital funds, and regulatory systems is being accelerated to mitigate short-term drastic market fluctuations.

On July 20, Wu Qing, Secretary of the Party Committee and Chairman of the China Securities Regulatory Commission, conducted research at a securities business department in Beijing, and held face-to-face exchanges with 8 representatives of various types of investors, including large, medium, and small retail investors, to listen to opinions and suggestions on promoting the stable and healthy development of the capital market. Investors proposed to strengthen the supervision of quantitative and AI program trading, further push listed companies to increase dividend payouts, and raise the cost of securities-related illegal and criminal acts.

Just the day before, on the evening of July 19, two state-owned capital operation pilot central enterprises directly under the State-owned Assets Supervision and Administration Commission of the State Council, China New Holding Co., Ltd. (hereinafter referred to as "China New") and China Chengtong Holdings Group Co., Ltd. (hereinafter referred to as "China Chengtong"), simultaneously disclosed their progress in large-scale shareholding increase in the secondary market, having invested a total of nearly 60 billion yuan to allocate core A-share assets.

Different from short-term emergency market support, both enterprises defined this shareholding increase as a medium- and long-term strategic allocation, with funds continuously disbursed relying on the central bank's special re-loan for stock repurchases and shareholding increases. This also means that the cross-cyclical regulatory fund system for domestic A-shares has taken further shape.

Regarding the details of this shareholding increase, Times Finance made calls and sent letters to China New and China Chengtong, but as of press time, no response had been received.

Supporting stability maintenance measures of multiple central enterprises were implemented simultaneously. Before the market opened on July 20, five central enterprises including China Coal Energy (601898.SH), CRRC (601766.SH), Aluminum Corporation of China (601600.SH), NARI Technology (600406.SH), and China Shenhua (601088.SH) collectively released plans related to shareholding increase, repurchase, asset injection, and dividend payout to stabilize market expectations. Among them, the three enterprises that disclosed specific scales have a total planned shareholding increase range of 1.2 billion to 2.4 billion yuan from their controlling shareholders.

In addition, on July 20, five insurance capital institutions with asset management scales exceeding one trillion yuan jointly voiced their support for the stock market. Among them, China Pacific Insurance (601601.SH) stated that it will continue to increase positions in technology, consumer, new energy stocks and ETFs, and has continuously raised its equity position ratio within the year; Ping An Insurance (601318.SH) said that it will rely on the advantages of long-term funds to increase investment in emerging industries, advanced manufacturing, and undervalued value targets; New China Life Insurance (601336.SH) also is optimistic about the long-term market value and will give full play to the advantages of long-term funds to increase equity allocation.

People's Insurance Company of China firmly is optimistic about the development prospects of China's capital market, and will resolutely act as a value discoverer in China's capital market, a ballast stone for maintaining capital market stability, and a main force serving the real economy; China Life Group stated that its subsidiary China Life Asset Management will always adhere to the concepts of long-term investment, value investment, and prudent investment with insurance funds, continuously give play to the role of the company's working mechanism for promoting medium- and long-term funds to enter the market, seize strategic allocation opportunities, optimize and improve the structure and proportion of equity investment, and increase allocation in key areas such as the modern industrial system and new quality productive forces.

A macroeconomic chief analyst at a securities research institute, Wang Tian (pseudonym), said in an interview with Times Finance that the targets of this round of shareholding increase are divided into two major directions: first, central state-owned enterprises with low valuations, solid performance, and stock prices that are clearly disconnected from their fundamentals; second, the technology tracks that have undergone deep corrections in the early stage, and the core operational goal is to repair the market trend.

A series of favorable policies were quickly transmitted to the secondary market. In the late trading session on July 20, leading broad-based ETFs such as ChinaAMC Science & Technology Innovation 50 ETF, E Fund ChiNext ETF, and Huatai-PineBridge CSI 300 ETF saw concentrated buying, driving the corresponding indices to turn positive. Hong Kong stocks rose across the board, with the Hang Seng Index closing up about 2.4% at 25,143 points that day, and the Hang Seng Tech Index rising about 2.8% to 4,752 points. The attitude of overseas institutions also warmed up simultaneously. According to China Securities Overseas News, international investment bank Citi adjusted its position allocation strategy for emerging markets and upgraded China's market to an "overweight" rating.

1

Two major state-owned platforms enter the market simultaneously to underpin, and the special re-loan tool continues to be optimized

As the only two domestic state-owned capital operation pilot central enterprises directly under the State-owned Assets Supervision and Administration Commission, the core functions of China New and China Chengtong focus on "capital management", do not carry out physical production and operation, and are mainly responsible for optimizing the layout of state-owned capital, managing the market value of listed companies, and undertaking the cross-cyclical regulation function of A-shares at the same time.

China New stated that the relevant entities under its subsidiary China New Investment Co., Ltd. (hereinafter referred to as "China New Investment") have used more than 50 billion yuan of special re-loans for stock repurchases and shareholding increases and supporting funds to maintain market stability. In the future, it will continue to make full use of the re-loan policy tool, and at the same time use its own funds to continue to increase holdings of central enterprise stocks, "firmly optimistic about the development prospects of China's capital market, and firmly support central enterprises' technological innovation and high-quality development."

China Chengtong and its wholly-owned subsidiaries Beijing Chengtong Capital Investment Co., Ltd. (hereinafter referred to as "Chengtong Capital") and Beijing Chengyang Investment Co., Ltd. (hereinafter referred to as "Chengyang Capital") focus on large-scale shareholding increase of Chinese stock assets by state-owned central enterprises, with a total purchase of nearly 10 billion yuan. China Chengtong also said: "Firmly optimistic about the prospects of China's economy and China's capital market, we will continue to use our own funds and stock repurchase and shareholding increase re-loans to massively increase holdings of stocks and ETFs of state-owned central enterprises and technology enterprises, and make every effort to maintain the stable operation of the capital market."

Among them, China New was established in 2010 and was included in the first batch of state-owned capital operation pilots in 2016. Data from the group's official website shows that by the end of 2025, its total assets exceeded one trillion yuan, and its annual profit has remained stable at more than 20 billion yuan for five consecutive years.

China New has built a national-level science and technology innovation fund matrix with a scale of hundreds of billions of yuan, focusing on investing in hard technology fields such as semiconductor materials, high-end equipment, new energy, and artificial intelligence, continuously helping central enterprises restructure and fostering strategic emerging industries.

This more than 50 billion yuan secondary market shareholding increase was fully implemented by its wholly-owned subsidiary China New Investment, which is also the only direct investment entity of China New in the secondary market. At present, China New Investment has participated in the equity operation of hundreds of central enterprise listed companies, long-term holding of undervalued and high-dividend central enterprise targets in energy, military, communications, high-end equipment and other fields, and simultaneously allocating multiple central enterprise-themed ETFs.

China Chengtong, founded in 1992, took the lead in becoming a pilot state-owned asset operation company in 2005, specializing in disposing of non-core and non-performing assets of central enterprises, and was upgraded to a state-owned capital operation pilot simultaneously with China New in 2016.

According to China Chengtong's official website, the total scale of various funds under its management exceeds 710 billion yuan, including two core national-level funds, the State-owned Capital Adjustment Fund and the Mixed Ownership Reform Fund, as well as multiple debt-to-equity swap special funds; the scale of equity management business exceeds 200 billion yuan, with a total investment of 93 billion yuan to promote the restructuring and integration of large central enterprises, and it is currently the major shareholder of five first-level central enterprises.

This nearly 10 billion yuan shareholding increase was jointly implemented by China Chengtong in cooperation with Chengtong Capital and Chengyang Capital. Chengyang Capital is the group's exclusive secondary market operation platform, focusing on individual stock shareholding increase, private placement, and index ETF allocation. In fact, this is not the first time the two platforms have carried out counter-cyclical operations simultaneously. When the global market fluctuated and A-shares corrected sharply in April 2025, China New launched an 80 billion yuan shareholding increase plan, and China Chengtong was approved a trillion-level re-loan quota to enter the market simultaneously to absorb selling pressure.

Regarding the funds for the large-scale shareholding increase of China New and China Chengtong, Wang Tian told Times Finance that the special re-loan tool for stock repurchases and shareholding increases launched in 2024 is an important institutional breakthrough in capital market stability maintenance, which for the first time incorporated the stable operation of the capital market into the central bank's policy objectives.

In 2025, the stock repurchase and shareholding increase re-loan was merged with the securities swap facility, with a total available quota of 800 billion yuan. Supporting policies have been optimized simultaneously: the loan term has been extended from 1 year to 3 years, the proportion of enterprises' own capital contribution has been reduced from 30% to 10%, and the equity pledge of listed companies can also be used as collateral, significantly lowering the threshold for shareholding increase funds.

The interest rate has continued to decrease. The initial central bank benchmark interest rate of the tool was 1.75%, later reduced to 1.5%, and the current effective interest rate is only 1.25%. Wang Tian pointed out that the dividend income from the stable dividend payout of central enterprises is sufficient to cover the financing cost of this fund, and the shareholding increase of the two major state-owned platforms has a sustainable market-oriented profit logic.

2

Listed companies set off a wave of shareholding increase and repurchase, short-term underpinning cannot solve the long-standing valuation discount problem of central SOEs

Since July, the volatility of A-shares has continued to expand. The two major state-owned capital operation platforms, China New and China Chengtong, have launched large-scale shareholding increases to implement the counter-cyclical stability maintenance needs of the capital market with national team funds.

From July 13 to July 17, the market experienced a deep phased correction, and all major broad-based indices fell sharply simultaneously. Among them, the Shanghai Composite Index fell 5.81% in a single week to close at 3764.15 points; the Shenzhen Component Index and the ChiNext Index fell 8.9% and 10.78% respectively, and the Science & Technology Innovation 50 Index even dropped by 16.93%, making the technology growth track the hardest hit area of the adjustment.

Wang Tian analyzed to Times Finance that the concentrated implementation of nearly 600 billion yuan in long-term shareholding increase funds will directly establish the market's policy bottom in the short term. Different from short-term trading funds such as retail investors and public funds, the funds entering the market this time have long-term allocation attributes, and the continuous expectation of buying at the bottom can offset the stampede selling pressure caused by the liquidation of margin trading positions and quantitative program trading, and alleviate the negative feedback of market liquidity.

From a medium-term perspective, this shareholding increase will reshape the market valuation pricing system. The funds focus on allocating undervalued central SOEs in energy, military, communications, high-end equipment and other fields. At present, the average dividend yield of central SOE blue chips is higher than the financing cost of the special re-loan, with stable and sustainable allocation returns; at the same time, it will improve the imbalanced pattern where market funds cluster in short-term themes and neglect the real growth industries.

In the long run, the normalized counter-cyclical entry of low-cost policy funds into the market can stabilize the violent fluctuations caused by short-term speculative behaviors, gradually change the market characteristics of A-shares with a high proportion of retail investors and short fund holding cycles, and promote value investment to become the mainstream trading logic.

At the same time, Wang Tian pointed out that this operation has opened up the linkage path between monetary policy, state-owned capital operation, and the real industry. The low-cost re-loan from the central bank is invested in the secondary market through the state-owned capital platform, which not only avoids the central bank directly entering the market to interfere with pricing, but also uses the state-owned capital carrier to achieve precise drip irrigation of policy funds to real listed enterprises.

The advantage of the domestic localized capital market regulation mechanism lies in its precision and efficiency. Funds only provide targeted underpinning when the market experiences extreme abnormal fluctuations, continuously release a strategic bullish signal, help the market form a stable expectation of "support when falling and room for rising", which is beneficial to the structural market of A-shares in the medium and long term.

However, Wang Tian also pointed out two practical constraints. First, the shareholding increase funds cannot directly boost the macro economy in the second half of the year, and can only alleviate the floating losses of accounts; only when the market generates a sustained profit-making effect can it repair residents' balance sheets and boost consumer domestic demand. Second, large-scale shareholding increase can only underpin stock prices in the short term, and cannot fundamentally solve the long-term valuation discount of central SOEs and local SOEs.

The continued pressure on the valuations of central SOEs is rooted in long-standing problems such as corporate governance, earnings stability, information disclosure, and dividend mechanisms. To achieve a continuous upward trend in the valuation center, it is still necessary to support long-term reforms such as deepening the reform of state-owned enterprises and increasing the dividend payout ratio to attract various long-term funds to continue to enter the market for allocation.

This round of large-scale entry of industrial capital has formed a multiple stability maintenance synergy with state-owned capital, insurance capital, and regulatory policies.

On the evening of July 20, more than 20 listed companies announced shareholding increase and repurchase announcements, with the clearly disclosed implemented shareholding increase and repurchase funds exceeding 720 million yuan, and the total range of various pending shareholding increase and repurchase plan funds is 4.64 billion to 7.6 billion yuan.

Among them, the enterprises that announced shareholding increase announcements include: EVE Energy (300014.SZ), Huatech (603306.SH), Muyuan Foods (002714.SZ), China State Construction (601668.SH), Xianhe Co., Ltd. (603733.SH), Kemen Foods (002661.SZ), and Xinya Process (002388.SZ), with a total of about 556 million yuan in implemented shareholding increase funds; the planned shareholding increase fund range is 1.06 billion to 1.6 billion yuan.

The enterprises that simultaneously released repurchase plans or implementation progress include: Huayou Cobalt (603799.SH), Sany Heavy Industry (600031.SH), Zhongtai Securities (600918.SH), Jiao Da Tie Fa (873345.BJ), BaiAo Intelligent (300835.SZ), ZTE (000063.SZ), Lisheng Sports (002858.SZ), Aerospace Materials Co., Ltd. (688563.SH), YTO Express (600233.SH), Chaoda Equipment (301186.SZ), Longke Technology (301305.SZ), Kedali (002850.SZ), Shandong Hi-Speed (600350.SH), Nanji E-Commerce (002127.SZ), Rongqi Technology (301212.SZ), Zhejiang Medicine (600216.SH), Chuangzhong Technology (603516.SH), Puyuan Co., Ltd. (688766.SH), etc., with the proposed repurchase fund range of 3.58 billion to 6 billion yuan.

This article is from the WeChat public account "Times Finance APP"