The State Information Office held a press conference on October 12, 2024. Minister of Finance Lan Foan said that at the end of 2023, the country's hidden debt included in the government debt information platform was reduced by 50% compared to the 2018 survey. It is proposed to increase large-scale debt limits at one time, replace hidden debts existing by local governments, and increase support for local debt risk mitigation. This policy, which is about to be implemented, is one of the strongest measures introduced in recent years to support debt.

The chief economist of CITIC Securities clearly stated that from the perspective of local debt management, debt conversion will be the focus of this round of fiscal policy. At the press conference, the Ministry of Finance plans to increase large-scale debt limits at one time to replace hidden debts held by local governments. This measure will greatly reduce the pressure on local government debt and help local governments develop the economy and support the “Three Guarantees.”

Relevant constituent stock information:

1) Everbright Garbo

Reason for selection: The controlling shareholder of the company is China Everbright Group Co., Ltd., a subsidiary of Everbright Ca Mau Asset Management Company, based in the non-performing assets business in Zhejiang Province

2) Mengcao Ecology

Reason for selection: Inner Mongolia Qingyuan Green Finance Asset Management Co., Ltd., which has a 17.2% stake, is the main business of acquiring and entrusting the non-performing assets of financial institutions, and managing, investing and disposing of non-performing assets

3) Yuxin Technology

Reason for selection: The company signed the “Beijing Yuxin Technology Group Co., Ltd. and Xiamen Asset Management Co., Ltd. strategic cooperation agreement” with Xiamen Asset Management Co., Ltd. on December 20, 2023. The two sides agreed to establish a strategic partnership in the field of personal loan non-performing asset disposal business to create a benchmark combination of “finance+technology”

4) Shanghai Jianke

Reason for selection: Shanghai Shengrong Industrial Co., Ltd., a subsidiary of Shanghai Guosheng Group, the controlling shareholder of the company, specializes in engineering project management, disposal of non-performing assets and asset management related to the real estate sector

5) Cinda Real Estate

Reason for selection: Cinda Investment, the controlling shareholder of the company, is a subsidiary of China Cinda Asset Management Company. Cinda Asset Management's main business includes non-performing asset management business, investment and asset management business, and financial services business. Among them, non-performing asset management is the company's core business

6) Dongxing Securities

Reason for selection: The company is a listed company under Oriental Assets, one of the top four state-owned financial asset management companies in China

7) Fengfan Co., Ltd.

Reason for selection: Fengfan Asset, a holding subsidiary of the company, carries out asset mergers and acquisitions and non-performing asset disposal business in related industries

8) Yinbaoshan New

Reason for selection: The actual controller of the company is China Oriental Asset Management Co., Ltd. China Oriental Asset Management Co., Ltd. has managed and disposed of more than 2 trillion yuan of various types of non-performing assets, making a positive contribution to the stability of the country's financial system

9) Zhejiang Oriental

Reason for selection: As a state-owned listed financial control platform in Zhejiang Province, the company mainly engages in various financial services and financial services. Local AMC Zheshang Asset is a holding subsidiary of the controlling shareholder of the company

10) Yuexiu Capital

Reason for selection: The subsidiary Guangzhou Asset focuses on the core business of managing non-performing assets

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