In a significant advancement for the Chinese capital markets, numerous publicly listed companies have begun to implement value management systems, encouraged by strong policy supportThis trend signals a commitment by these firms to improving their investment value and protecting the interests of shareholdersData from financial analytics firm Tonghuashun indicates that over 70 A-share companies have publicly disclosed their value management regulations, with many more in the pipelineWhile this initiative is widely viewed as beneficial for enhancing the quality of listed companies, experts caution against potential malicious practices by major shareholders engaging in "pseudo value management."

The recent announcements reveal a growing focus among A-share companies on developing strategies to enhance their market capitalizationFor instance, as of mid-February, more than 73 A-share companies had officially announced their value management systems, of which 62 were disclosed since mid-November 2024 aloneMajor state-owned enterprises have taken the lead in this initiative, with firms like China Southern Airlines and China Merchants Jinling publicly stating that their boards have endorsed the establishment of value management systemsAdditionally, companies such as Huatai Securities and Binhao Co. have laid out preliminary plans for increasing their valuation, despite not having finalized their management systems as of yet.

Regulatory pressures have played a crucial role in spurring the development of these value management frameworksOn November 15, 2024, the regulations emphasized the responsibilities of company boards, directors, and senior management in establishing these systemsFurthermore, major index constituent companies were mandated to disclose their valuation enhancement strategies, especially if they had sustained long-term underperformanceBy December 17, the central authority had further urged state-owned enterprises to integrate value management as a core strategic priority, emphasizing long-term sustainability and efficacy in managing market capitalization.

The strategic goals of these newly established systems share commonalities among the listed firms: to improve their investment attractiveness, manage market perception effectively, and uphold the legitimate rights of both the companies and their stakeholders

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Many industry experts regard the proliferation of such systems as a positive development, indicating a more proactive governance approach among listed entities.

"The adoption of value management systems across various companies highlights their heightened awareness of regulatory expectations and a genuine desire to enhance governance and shareholder returns," states Tian Lihui, the director of the Financial Development Research Institute at Nankai University. "The focus on value management transcends mere short-term stock price movements; it represents a long-term strategy aimed at maximizing intrinsic value through sustained improvements in company fundamentals, competitiveness, and transparency."

Fu Lichun, a founding partner of Yuntai Capital and member of the Financial Committee of the Chinese Marketing Association, echoes this sentimentHe believes that the increasing emphasis on transparency and compliance reflects broader market expectations and reinforces the importance of robust corporate governance, effective information disclosure, and value management for shareholders.

With regard to the tools and methods companies are employing, there appears to be a diverse array of strategiesFor instance, Liaogang Company has articulated a plan emphasizing core business efficiency and profitabilityTheir strategy includes mergers and acquisitions, stock incentives, employee stock ownership plans, cash dividends, investor relations management, and buybacks—all tailored to reflect the company's quality accuratelyMoreover, companies have instituted monitoring and response protocols to mitigate the impacts of any sudden declines in stock prices through potential buybacks or dividends.

Fude Technology's value management framework underscores five foundational principles: systemic, scientific, normative, regular, and proactiveTheir approach recognizes the need for diverse strategies, including mergers, incentives, and dividends to enhance investment value

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Similarly, Shunwang Technology's guidelines include operational improvements, buybacks, and encouraging stakeholder purchases, illustrating a customized approach to value management.

The data corroborating these efforts reveals a robust "toolbox" for value management among A-share companiesProactive measures such as mergers, buybacks, equity incentives, and dividends are all being utilized extensivelyIn 2024 alone, public companies announced buyback and stake-repurchase programs totaling nearly 300 billion yuanAs of the latest reports, over 300 companies have declared intentions to use bank loans for these purposes, with firms valued over 100 billion yuan accounting for more than 40% of this activity, illustrating the impactful effects of policy initiatives.

Furthermore, equity incentives appear to be gaining traction, with Tonghuashun reporting 747 incentive plans announced this yearThe popularity of restrictive stock plans has notably surged—over 40% now choose this as their preferred incentive typeCompanies like Deepin and HDA Group are also broadening their scope, incentivizing thousands of employees to align interests across the corporate structure.

The momentum towards buybacks and increases in equity ownership has remained strong into 2025, with 421 companies reporting buyback plans worth a total of 633.76 billion yuanAdditionally, 66 firms unveiled 73 shareholder increase plans amounting to 82.76 billion yuanReports indicate a vibrant merger and acquisition scene, with 260 companies announcing 287 deals this year alone, cumulatively valued at over 100 billion yuanThis activity is underscored by a range of incentive programs, further expanding the framework for motivating stakeholder engagement.

Looking ahead, experts believe the value management systems will have broad and lasting implications for the health of the capital market. "The recent buzz around value management frameworks demonstrates a clear demand among market participants for transparent and consistent practices, indicating a shift toward a more sustainable and mature market ecosystem," commented Tian Lihui

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