Recently, as an important measure for the Securities Regulatory Commission to optimize the securities margin trading mechanism, the securities margin trading subject has ushered in the sixth and the largest expansion.As the leader in the A-share market, Luen Mei Quantum (600167.SH) was selected.

Analysts pointed out that the selection of Luen Mei Quantum as the securities margin trading subject indicates that regulators and the market affirm the governance level, performance growth, and development prospects of the company, which will form a long-term positive influence on the company.

“This will promote the market’s further excavation of the company’s value, and promote Luen Mei Quantum to continuously improve its operating level and governance capabilities.” For the two listed companies, Luen Mei Quantum said, “It will also effectively increase the market’s attention to the company, and help attract potential investors and partners.”

“Top 100 Companies in the Main Board” 

Value creation is the eternal theme of the capital market.

Regarding the optimization of the trading mechanism of the securities margin trading and the expansion of the scope of the subjects, the CSRC said that this will further enhance the marketization of securities margin trading and maintain market vitality. It will guide investors to invest reasonably and guide the capital into the market in a positive way.

“Companies with high-quality development are the key to the capital market and play a vital role in creating asset value, maintaining market image, and enhancing market confidence.” Li Mingzhong, Deputy General Manager of the Shenzhen Stock Exchange pointed out at the 13th Forum for Market Value Management of Listed Companies in China held on August 11.

In this forum with the theme of “Core Assets and Pioneering by Market Value”, Luen Mei Quantum was honored as one of the “Top 100 Listed Companies on the Main Board of China”. The selection of this list that follows the concept of value investment and strict standards reflects the good profitability, governance ability and stable development ability of Luen Mei Quantum.

Today, Luen Mei Quantum has formed a development pattern of “clean heating + high-speed rail digital media”. The high barrier properties and anti-cyclicality of the two main businesses ensure the company’s future performance growth.

The Attribute of “Core asset”, Market Value Still Needs Exploring

In the opinion of experts, the expansion of the two subjects fully demonstrates the willingness of the supervisors to increase the activity of market transactions and promote the healthy development of the A-share market.

In terms of the selection of subject stocks, the Shanghai and Shenzhen stock markets take the priority of retaining the existing underlying stocks as the basic principle, and select 275 and 375 stocks as the new underlying stocks in descending order of weighted evaluation index. High market attention and transaction activity are the characteristics of the selected subjects.

So, what are the influences of the expansion of the securities margin trading? The fifth expansion in December 2016 may be a reference.

At that time, both Shanghai and Shenzhen Stock Exchanges stated that the new underlying stocks were mainly stocks with low price-to-earnings ratio, large market capitalization, active trading, and stable market performance. Only 77 new underlying stocks were added for the fifth expansion, which yet laid the groundwork for the blue chip market in 2017.

As China’s economy shifts to high-quality development and A-share core assets continue to be sought after, the attention and attractiveness of solid-performance companies such as Luen Mei Quantum continue to rise. Wang Delun, chief strategy analyst of Industrial Securities, believes that the stocks with outstanding performance in the market today are the start of an independent bull market of core assets, and the A-share market is expected to usher in the first “long-time bull market” in history.

Steady performance growth and industry leading position- Luen Mei Quantum has gained the favor of many institutions for its certainty and the attribute of “core assets”. In the second quarter of this year, Bosera Asset Management scaled in to 47.17 million shares of Luen Mei Quantum, ranking the third on the list of increasing stocks; SAIC Capital fully subscribed for 500 million yuan of exchangeable bonds issued by the major shareholder of Luen Mei Quantum...

As pointed out by Li Xunlei, chief economist of Zhongtai Securities and Director of Securities Research Institute, in the future, the market will give more premium to the certainty.

The spring of market value investment is here.

（source：China Economic News）