Who Profited from the Stock Market Surge?

Recently, the market has seen a significant rebound. For instance, on October 18th, the ChiNext board closed up nearly 8%, and on October 21st, major indices continued to surge during the trading session. Following the strong rebound since September 24th, investors have witnessed an overall increase in their average holding value. From the perspective of certain investors, such as those with insurance funds, those participating in private placements, and those with blockholding actions, all have achieved growth in profits.

Insurance funds' Q3 reports widely benefit from the market's recovery

The market welcomed a volume rebound in September, driving the overall performance of the third quarter to be quite impressive. Statistics show that in the third quarter of this year, the Shanghai Composite Index rose by 12.44%, the Shenzhen Component Index increased by 19%, and the ChiNext Index surged by 29.21%. As the indices rebounded, investors who laid out their investments in the third quarter also saw a synchronized growth in their investment returns, such as those with insurance funds.

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With the market's recovery, the investment income on the asset side of insurance funds has increased, which is reflected in the latest performance forecasts of insurance funds. Recently, insurance funds have密集ly released their Q3 2024 performance forecasts. It has been observed that insurance funds generally mention that the growth in net profits is largely related to the recovery of the capital market and a significant year-on-year increase in investment income.

Looking at the performance forecasts, China Life, New China Life, PICC, China Pacific Insurance, and Tianmao Group have all released their Q3 2024 performance forecasts. Among them, four have forecasted an increase, with China Life and New China Life achieving a doubling of their forecasted upper limits.

Further examination reveals that China Life's forecasted upper limit for an increase is the highest at 185%. According to the performance forecast disclosed by China Life, it is expected that the net profit for the first three quarters of 2024 will be between 101.135 billion yuan and 108.767 billion yuan, representing a year-on-year increase of 165% to 185%. Regarding the reason for the performance growth, China Life stated that it is related to the significant recovery of the stock market in the third quarter of 2024 and a substantial year-on-year increase in investment income.

From the net profit forecast, China Pacific Insurance's forecasted upper limit for an increase is 39.4 billion yuan, only second to China Life, with the highest year-on-year increase of up to 70%. Regarding the reason for the performance growth, China Pacific Insurance also mentioned that it is related to the rise in the capital market and a significant year-on-year increase in investment income for the first three quarters.

Recently, the stock prices of insurance companies have also seen a volume increase. Statistics show that from September 24th to October 18th, the stock price increases of New China Life, Ping An Insurance, and Tianmao Group all exceeded 30%. In addition, looking at a longer period, some targets have shown a "slow bull" market trend, such as PICC, whose stock price has been steadily rising since January of this year.

Regarding the investment opportunities in insurance stocks, Huaxi Securities stated that looking forward to the Q3 2024 report, the net profit and new business value growth of listed insurance companies are expected to exceed expectations due to the resonance on both the liability and asset sides.In the context of an overall market recovery, insurance funds are also intensifying their research on listed companies. For instance, since October, several companies have received research from three or more insurance funds. Among them, many individual stocks have achieved significant increases during this strong market trend since September 24. For example, the computer software company Bosi Software, from September 24 to October 18, saw an increase of nearly 50%. Additionally, there are numerous companies whose stock prices have risen by more than 50% during this period.

Many institutional investors have significantly increased their positions,

Reaping substantial unrealized gains through passive lock-up positions

Among the investment institutions participating in private placements, the majority have also achieved substantial unrealized gains.

From the perspective of listed companies, according to incomplete statistics, since the second quarter of this year, there have been private placements for 57 companies. As of the closing price on October 18 (last Friday), 45 companies have seen their closing prices rise compared to the issue price.

Among them, many companies have "created" significant unrealized gains, such as Changliang Technology. The company's stock price closed at 19.97 yuan on October 18, setting a new high in nearly three years, and has more than doubled compared to the issue price of 5.70 yuan.

Changliang Technology's main business is IT solutions for commercial banks and it has the AMC (Asset Management Company) concept. Recently, measures related to debt restructuring have been introduced. For example, the Ministry of Finance proposed to increase the debt limit by a large amount at one time to replace the existing implicit debt of local governments and to increase support for local debt risk resolution. This has further stimulated the continuous heating up of the AMC concept.

According to Changliang Technology, the company has rich digital experience, products, and cases in the field of non-performing asset disposal by financial institutions, and can provide a systematic and compliant overall solution for the disposal of non-performing assets by financial institutions. The company stated on October 15 that it won the "first phase project of individual loan non-performing business system construction" for an important asset management company (AMC) in a western province.

Looking at the institutions involved in private placements, many institutions that previously participated in private placements have also reaped substantial unrealized gains.

According to incomplete statistics, since the second quarter, Nord Fund has participated in the most private placements, with 45 companies and a subscription amount exceeding 6 billion yuan. The latest data shows that 35 of the companies in which it participated in private placements are in a state of unrealized gains.In addition to the aforementioned Changliang Technology, Nord Fund's participation in the private placements of companies such as China Re Environment, Changying Precision, Kinlong Hardware, Shiyun Circuit, and Deye Shares has also yielded substantial paper profits, with the latest closing prices all having a premium of over 50% compared to the issue price. Upon further observation, many of the aforementioned companies are currently in an uptrend, such as China Re Environment, which recorded a "10cm" daily limit up on October 18th and 21st; Changying Precision's stock price has recently rebounded with increased volume and set a new high in nearly two years.

Additionally, the international heavyweight investment institution UBS has also achieved considerable gains from private placements. According to incomplete statistics, it has participated in the private placements of 25 companies since the second quarter, with an allocated amount exceeding 1.4 billion yuan, of which 21 are in a paper profit state. Looking at the list of companies in which UBS participated in private placements, there is a significant overlap with Nord Fund, such as Changliang Technology, China Re Environment, Kinlong Hardware, etc.

Significant "buying" leading to a stake crossing the threshold

Some investors are reaping paper profits

For some target stocks, many investment institutions have seized the right opportunities, significantly "buying" and reaching the 5% threshold for a stake crossing. With the overall rise in market indices, the market value of the positions held by the relevant investors is also increasing.

On October 16th, Quanxin Hao stated that from May to October 2024, Jiande Junlin purchased a total of 17.32 million shares of the company through the Shenzhen Stock Exchange system, accounting for 5% of the company's total shares. Jiande Junlin indicated that this increase in holdings is based on confidence in the future continuous development of the listed company and recognition of the long-term investment value of the listed company, and it does not rule out the possibility of continuing to increase the listed company's shares within the next twelve months.

Quanxin Hao's main business includes automobile sales and property leasing. It recently stated that in order to further attempt to expand the company's new profit growth points, it plans to establish "Zhejiang Quanxin Hao Pharmaceutical Co., Ltd.". Looking at the purchase data of Jiande Junlin, most of it was concentrated between May 2024 and August 2024, when Quanxin Hao's stock price was mostly between 4 yuan and 5 yuan. On October 18th, the company's stock price had risen to 6.58 yuan. From the secondary market perspective, the company's stock price started to rebound from the bottom on August 26th and has since increased by more than 50%.

In addition to Quanxin Hao, several other companies have previously received a stake crossing, and from the perspective of the secondary market, many companies have also "created" substantial paper profits for the stake crossing parties, such as ST DeHao.

According to the announcement by ST DeHao on August 2nd, it received a "Simplified Equity Change Report" from the shareholder Beijing Fengyan Zhenxuan No. 2 Private Equity and its concerted action persons. They increased their holdings in the company by 20.08 million shares from July 27th to August 1st, 2024, accounting for 1.1461% of the company's total share capital. To date, the directly held company shares account for 5% of the company's total share capital.ST DeHao's main business is small household appliances and LED products. On September 3rd, the company announced its intention to sell idle assets to recoup funds, with the target valued at 135 million yuan. Looking back, the main increase in holdings of ST DeHao by Beijing Fengyan Zhenxuan No. 2 Private Equity was distributed from June to July, when the company's stock price was generally at a low level. After hitting a low on June 21st, the company's stock price rebounded strongly. From August to September, the company's stock price experienced a round of accelerated growth, increasing by more than 20% during this period.