(Yicai Global) March 15 -- The investment arm of the Shenzhen government has been expanding its portfolio in recent years. It now not only owns stakes in some of China’s most valuable companies, such as real estate giant Evergrande Group and insurer Ping An Group, but it has also bought into a number of struggling high-profile firms to produce a win-win situation.

The Shenzhen Municipal State-owned Assets Supervision and Administration Commission has invested in 34 listed companies across the sectors of real estate, communications, e-commerce, smart cities and logistics which had a total market valuation of CNY2.57 trillion (USD395 billion) as of March 12. Four of these, Evergrande, Ping An, property developer China Vanke and financial services firm Guosen Securities, each have a market value of more than CNY100 billion (USD15.4 billion).

The Shenzhen SASAC was also behind the bail out of e-retailing giant Suning earlier this month. Two of its subsidiaries paid CNY14.8 billion (USD2.3 billion) for a 23 percent stake in the ailing retailing giant to ease its liquidity pressure and at the same time give Shenzhen SASAC strategic e-commerce assets in the Yangtze River Delta region.

It also masterminded the sale of telecoms giant Huawei Technologies’ budget brand Honor to a joint venture it established with over 30 distributors of Honor handsets last November. As the target of numerous US trade sanctions for alleged national security reasons, Shenzhen-based Huawei had no choice but to let one of its biggest earners go to avoid dragging it down with it, founder Ren Zhengfei said earlier.

Shenzhen SASAC has done a good job in adjusting its asset structure, Hu Chi, a SASAC researcher, told Yicai Global. It has a number of energy, airport and port industries assets. These are safe, long-term investments with considerable returns which remain relatively unaffected by the Covid-19 pandemic, he added. Its real estate firms, including Vanke and Evergrande, are also performing well.

The investment map of Shenzhen SASAC spreads across 16 countries worldwide and 167 cities in China. When selecting investment targets, Shenzhen SASAC is committed to connecting with businesses of its various industrial assets, so as to enhance their competitiveness through synergy, Yicai Global noted.

Editors: Tang Shihua, Kim Taylor