Hi everyone. I’m Stephanie LI.
Coming up on today’s program.
Property developers will be allowed to raise funds from private stock sales and sell shares to fund purchases of real-estate assets;
Sinopharm gets the go-ahead for inhaled Covid-19 antibody trials.
Here’s what you need to know about China in the past 24 hours
Shares of Chinese property companies soared on Tuesday after the country's securities regulator lifted a ban on equity refinancing for listed property firms, in the latest support measure for the embattled real estate sector.
Hong Kong's Hang Seng Mainland Properties Index rose 8 percent, with Country Garden Holdings and Longfor Group Holdings leading the advance. Among the mainland-traded developers, China Vanke rallied 10 percent in Shenzhen and Poly Developments advanced 9.6 percent in Shanghai.
The China Securities Regulatory Commission (CSRC) rolled out five measures late Monday, announcing that mergers, acquisitions, restructuring, supporting financing, and refinancing will resume for eligible listed companies in the property sector. The measures include a revision of developers' overseas listings, specifically in Hong Kong.
Developers’ restructuring and refinancing applications have been on pause since October 2010 to rein in land speculation.
The securities regulator vowed to support the implementation of plans to improve premium property developers' balance sheets, and help the housing market to revive dormant assets.
The country will expand the use of Real Estate Investment Trusts(REITs), especially in affordable rental housing and infrastructures like warehouses and industrial parks, said the commission. The CSRC is also working with the fund industry association to draft rules on real estate private equity investment fund filing.
The fresh move, adding to a flurry of recent government actions to stabilize the housing market and the economy at large, is meant to let listed developers use the capital market to ease their funding woes, market observers said.
The announcement is the "third arrow" in the quiver of the regulators to revitalize the housing market, in addition to the previous two rounds of bailouts that featured loan extension and bond financing.
Greater Bay Area, Greater future
The 19th International Finance Forum (IFF) Annual Meeting will be held in Guangzhou from Dec. 2 to 4, organizers said Monday. The meeting, which will be held online, will center around the theme "The Ever-Changing World: Reshaping Our Shared Future.” Leaders from international organizations including the United Nations, the International Monetary Fund, World Bank, executives of leading global financial institutions and enterprises, and scholars will take part in the event. During the three-day conference, the IFF will release the Global Finance and Development Report, its annual report on the global economy and China's economic outlook for 2023.
Next on industry and company news
Shares of Sinopharm rose today after the inhaled monoclonal antibody against Covid-19 developed by its unit China National Biotec Group received regulatory approval to begin clinical trials. China’s National Medical Products Administration approved the nasal spray using monoclonal antibody F61 for clinical tests on Nov. 25, the firm announced yesterday.
China’s most valuable company Kweichow Moutai gained 6 percent in Shanghai after declaring a special dividend of 27.5 billion yuan and an up to 3.1 billion yuan buyback plan of the controlling shareholder. The liquor retailer will distribute special cash dividends of 21.91 yuan per share before tax, it announced yesterday. The top liquor distiller also said its controlling shareholder will spend as much as 20 percent of the dividends to boost its stake in the company.
Chinese credit technology platform 360 Digitech rose 3.4 percent on its debut in Hong Kong today, as it has raised about HK$277.2 million from its secondary listing in Hong Kong after pricing the offering well below the top of the marketed range. The 5.54 million shares on offer were priced at HK$50.03 each.
Tesla has teamed up with automotive company Annex Semiconductor to set up an autos chip joint venture (JV) in China, as the US electric vehicle giant pushes into the country’s semiconductor sector amid Beijing’s promotion of the domestic industry. The JV is expected to supply automotive chip and electronics solutions. Annex has a controlling stake of 55 percent in the JV, Tesla has 5 percent, while Jinan Zurich Annecy Equity Investment Fund Partnership controls 40 percent.
Earnings reports express
Pinduoduo’s shares surged after the leading Chinese group-buying platform logged a more than five-fold gain in net profit in the third quarter. Net profit was 10.6 billion yuan in the period, versus 1.6 billion yuan a year earlier, according to the Shanghai-based company’s earnings report released yesterday. Revenue rose 65 percent to 35.5 million yuan. Most of Pinduoduo’s revenue in the period came from online marketing and transaction services, which increased 58 percent and 102 percent to 28.4 billion and 7 billion yuan, respectively. Revenue from merchandise sales fell 31 percent to 56.4 million yuan.
Switching gears to financial news
China's tax department continuously accelerated the export tax refund this year, offering powerful support for the steady growth of foreign trade, data from the State Taxation Administration showed Monday. From the beginning of this year to Nov 10, the total tax refund, as well as tax exemption, reached 1.64 trillion yuan, up 14.9 percent year-on-year.
Wrapping up with a quick look at the stock market
Chinese stocks gained on Tuesday, with the benchmark Shanghai Composite up 2.31 percent and the Shenzhen Component adding 2.4 percent. Hong Kong stocks jumped by the most in two weeks, fanned by a rally in property developers. The Hang Seng index rose 5.24 percent to reclaim the 18,000-mark, as the TECH index soared 7.66 percent.
Biz Word of the Day
Equity financing is when an investor agrees to supply a specified amount of their capital in exchange for equity in your business. The most common equity financiers include venture capitalists and angel investors. The main advantage of equity financing is that there is no obligation to repay the money acquired through it.
Executive Editor: Sonia YU
Editor: HE Jia
Host: Stephanie LI
Writer: Stephanie LI
Sound Editor: Stephanie LI
Graphic Designer: ZHENG Wenjing, LIAO Yuanni
Produced by 21st Century Business Herald Dept. of Overseas News.
Presented by SFC