The latest voice of the "3.15" of the China Securities Regulatory Commission clearly stated that it will further improve the system of rules for the reduction of A- share listed companies, and in accordance with the principle of substance over form, comprehensively prevent bypass reduction.

The China Securities Regulatory Commission stated that the first is to clarify the reduction rules for divorce and dissolution of controlling shareholders; the second is to clarify the reduction rules for stock pledge liquidation, gift and other methods; the third is to prohibit major shareholders, directors, and senior executives from participating in the company Derivatives transactions with the company's stocks as the subject matter are prohibited, and restricted shares are prohibited from being transferred to financing and lending, and restricted shares are sold by shareholders. For the illegal reduction of the CSRC will be ordered to buy back and turn over the spread, for refusal to correct the severe penalties.

On August 27 last year, the China Securities Regulatory Commission issued the reduction of upstarts. The core content of the new regulations is to set the "three thresholds" for breaking, breaking, and dividends. It has set strict requirements for the reduction of holdings. The reduction of major shareholders of listed companies is linked to stock prices and dividends.

The Shanghai and Shenzhen markets have entered the 2023 annual report window, and dividends and profitability have become clear. The first financial reporter tried to sort out the current listed companies affected by the new rules for investors' reference.

more than 1,000 companies fail to meet the dividend standards, and biomedicine and computers are the hardest hit areas

The dividend indicator has been the biggest "blocker" for actual controllers and controlling shareholders to cash out since the release of the new regulations on shareholding reduction. The next step is to face stricter improvement of this indicator. The CSRC has eliminated three major measures from dividend supervision, including strong restraint measures on dividends, requiring listed companies to formulate active and stable cash dividend policies and clarifying investor expectations. For listed companies that have not paid dividends for many years or have low dividend payment rates, regulatory constraints are strengthened through mandatory information disclosure, restrictions on the reduction of controlling shareholders, and the implementation of other risk warnings (ST). If a listed company buys back its shares and cancels them by means of an offer or centralized bidding, the amount of the repurchase cancellation is included in the calculation of the dividend payment rate. Strengthen the supervision and law enforcement of abnormal dividend behavior.

Wind data show that as of the latest closing date, the share prices of 1126 listed companies (the same below) were lower than the IPO issue price (hereinafter referred to as "break"), accounting for 21.03 of the total number of companies. There are 518 companies with a price-to-book ratio of less than 1 (I .e. broken net); There are 473 companies with accumulated cash dividends less than 30% of the average annual net profit in the last three years; there are 1442 companies that have not paid dividends in the past three years.

The data shows that dividends are the biggest "obstacle" for controlling shareholders and actual controllers to reduce their holdings, followed by the stock price break, and the number of companies with broken stocks is relatively small.

The reporter further statistics show that the 1442 companies that have not paid dividends in the past three years are mainly concentrated in machinery and equipment, electronics, computers, and biomedicine, with 141, 138, 114, and 114 respectively; power equipment and basic chemicals The number is closely followed by 87 and 73.

Lack of profitability is the main reason why these listed companies cannot pay dividends steadily. The above 141 machinery and equipment companies have a combined loss of about $16.2 billion in net profit for the past three years (2020-2022). The indicators for electronics, computers and biomedicine are -4.211 billion yuan, -49.443 billion yuan and -109.55 billion yuan respectively.

Biopharmaceutical losses of more than 100 billion, mainly due to the unprofitable listing of innovative drugs and innovative vaccine companies. The net profit loss of the leading stock Baiji Shenzhou (688235.SH) from 2020 to 2022 reached 34.77 billion yuan, and this indicator of Yimang Bio, Rongchang Bio, Maiwei Bio and other companies was higher than -1 billion yuan.

Many innovative pharmaceutical companies have lost their net profits for three consecutive years. The probability of achieving a turnaround last year is low. With the disclosure of the 2023 annual report, the stock may be "ST". In 2020, listed on the board of Junshi Bio (688180.SH) accumulated losses of 4.77 billion yuan over the past three years, the company expects 2023 net profit attributable to the mother to continue to lose 2.247 billion yuan, four consecutive years of losses "on the board". Frontier Bio (688221.SH), which is also listed in 2020, is mainly engaged in the research and development and production of innovative AIDS drugs. In the past three years, it has accumulated a loss of 0.847 billion yuan, and is expected to continue to lose 0.327 billion yuan last year. as the amount of accumulated losses continues to rise, these innovative pharmaceutical companies can only pay dividends in the future after making up for the undistributed profits of the losses, or it also means that the reduction of the actual controller and the controlling shareholder is "far away".

the performance of the computer industry loss of individual stocks generally tied to the "AI", "Huawei Hongmeng" concept, although the stock price has a phased rise in performance, profitability is significantly lacking. Typical stocks such as cloud from technology (688327.SH), the company's share price soared 180.72 in the first quarter of last year, 2020-2022 cumulative loss of 2.314 billion yuan, the third quarter of last year continued to lose 0.629 billion yuan. The first company on the board with different rights of the same shares (688158.SH) engaged in third-party cloud services, unclassified profits accumulated a loss of 1.69 billion yuan, the brokerage firm's 2024 and 2025 performance forecast is still a "loss".

Year-on-year reduction in the number of announcements

The behavior of major shareholders to reduce their shareholdings is often understood by the market as a negative. In the future, the stock supply will increase or the stock price will fall, or the shareholders themselves are not optimistic about the development of listed companies in the next few years. On the contrary, the increase of major shareholders is regarded as a positive, that is, to show confidence in the company's future performance.

in addition to the restrictions on the reduction of controlling shareholders and actual controllers by the indicators of stock price break, net break and dividend, shareholders, directors, supervisors and senior managers who hold more than 5% of listed companies are also subject to more and more restrictions on reduction, including the prohibition of reduction in violation of laws and regulations, the prohibition of short-term trading, the restriction on the proportion of reduction, the time limit of reduction, the pre-disclosure requirement of reduction, etc.

Since the release of the new reduction rules, the number of announcements of the proposed reduction of listed companies in 2024 has decreased significantly. Industry insiders expect that with the further improvement of the reduction rules, it will help to further improve the balance of the proportion of A- share holdings.

Wind data shows that according to the statistics of the first announcement date, since this year, a total of 1122 announcements have involved increasing or decreasing holdings. After excluding duplicate companies, a total of 160 listed companies have issued reduction plans, and most of the reduction plans have been shown as "in progress". In contrast, there are as many as 841 announcements to increase shares, and the number of companies after excluding repetitions is significantly higher than the number of companies to be reduced.

compared with January 1, 2023 to March 17, there were 3647 announcements of increase or decrease in holdings and 3390 announcements of reduction in holdings, accounting for 92.3 of the total. it can be said that a wave of reduction has emerged.

There are more announcements on increasing holdings in the market this year than on reducing holdings. On the one hand, due to the sharp decline in A shares before the Spring Festival this year, the stock prices of some companies have seriously deviated from the fundamentals. The advantages outweigh the disadvantages for shareholders of listed companies to increase their holdings at this time. On the other hand, last year's new regulations on the reduction of holdings formed a "constraint" on the controlling shareholders and actual controllers of more listed companies ".

In the announcement of the reduction, some shareholders of the company with mixed fundamentals plan to cash out large amounts. Mubang Gaoke (603398.SH) holds more than 5% of the shares. The non-largest shareholder Bangling International Co., Ltd. intends to reduce its total share capital by 5.3, which is the largest single reduction in the year. The shareholder intends to transfer 23 million shares by agreement. The transfer period is within 6 months from March 13, 2024. According to the latest closing price, it is planned to cash in 0.449 billion yuan.

Mubang Gaoke, which is mainly engaged in toys, had planned to enter the slice and battery projects in the photovoltaic field. Since the cross-border announcement in January 2022, there has been no progress for two years. Since 2021, Mubang Gaoke's net profit after deduction of non-profit has accumulated a loss of about 0.38 billion yuan. As of the end of the third quarter of last year, the company's undistributed profit has lost 66.1713 million yuan.

the improvement of the reduction rules and the strict investigation of illegal reduction is the beginning of the transformation of the capital market from mainly serving enterprise financing to focusing on investors. Along with the-share 2023 annual report has been disclosed, dividends and net-breaking indicators on the real controller and controlling shareholders will change, the first financial will keep track.