On November 29, the Shanghai Stock Exchange and China Securities Index Co., Ltd. announced the regular adjustment results of the CSI 300, SSE 50, SSE 180, CSI A500 and other indices. Chongqing Sokon Industry Group Stock (601127.SH) was included in the four major indices in this round of adjustments, and it officially took effect after the market closed on December 13 (Friday).

It is understood that this is the first time Chongqing Sokon Industry Group Stock has been included in the SSE 50 Index, and it is currently the only Chongqing enterprise in the SSE 50 Index.

What does this mean for Chongqing Sokon Industry Group Stock?

I. A New Significant Milestone

Being officially included in the CSI 300 and other four major indices is undoubtedly another milestone for Chongqing Sokon Industry Group Stock in the capital markets.

It needs to be clear that the CSI 300 index, as one of the most representative broad-based indices in the Chinese A-share market, covers about 60% of the market capitalization of A-shares, and can better reflect the overall performance of the Chinese A-share market. It is not only an important tool for measuring market performance but also an important reference for asset allocation and investment decisions. At the same time, the index is also the basis for many financial products such as index funds, futures contracts, etc., and is of significant importance for investors in asset allocation and risk management.

Therefore, in the biannual regular adjustments, various aspects such as market capitalization of A-share listed companies, turnover, profitability, business performance, etc., need to be evaluated, and each aspect needs to meet certain conditions.

The SSE 50 index selects the top 50 stocks in the Shanghai market with large scale, good liquidity, and strong representativeness as samples, comprehensively reflecting the stock price performance of a group of high market value companies in the Shanghai market. Its component stocks cover many industry leaders, and its performance also to some extent reflects the development trend of the Chinese economy. Therefore, this index holds a pivotal position in the A-share market.

Based on this assessment, Chongqing Sokon Industry Group Stock meets the requirements in terms of stock stability, liquidity, etc., and being successfully included in the CSI 300 index and other four major indexes is not surprising. This undoubtedly represents the market's high affirmation of its own business capabilities, performance growth potential, and comprehensive qualifications.

From an investment logic perspective, whether in the short term or the medium to long term, it helps to enhance its investment value.

In the short term, after being included in indexes like the CSI 300, passive funds tracking these indexes will buy Chongqing Sokon Industry Group Stock to replicate the index performance, bringing in a large amount of passive funds for Chongqing Sokon Industry Group Stock in the short term. At the same time, as a listed company included in the SSE 180 index samples, according to the rules of the Shanghai-Hong Kong Stock Connect, it automatically becomes the target of the Shanghai-Hong Kong Stock Connect. This helps Chongqing Sokon Industry Group Stock to directly unlock the inflow channel of northbound funds, making it easier to become favored by overseas funds, and positively impacting its performance in the capital markets.

In the medium to long term, being a target of the four major indexes mentioned above, Chongqing Sokon Industry Group Stock can attract more attention and tracking from investors, and will also have positive effects on the company's business development, financing, etc., enhancing long-term value.

Second, the performance continues to improve.

Continued strong performance is also a key factor for Chongqing Sokon Industry Group Stock to be included in the CSI 300 and other four major indexes.

The increasing delivery volume provides Chongqing Sokon Industry Group Stock with a continuous space to optimize profitability. In the first three quarters of this year, Chongqing Sokon Industry Group Stock achieved revenue of 106.627 billion yuan, a year-on-year increase of 539.24%. Net income attributable to shareholders of the listed company was 4.038 billion yuan.

In the just past November, Chongqing Sokon Industry Group Stock's performance was still outstanding. Data shows that in November, the sales volume of new energy cars reached 0.0368 million vehicles, a year-on-year increase of 54.58%; the cumulative sales volume was 0.3896 million vehicles, a year-on-year increase of 255.26%. Among them, Chongqing Sokon Industry Group Stock sold 0.0324 million vehicles in November, a year-on-year increase of 59.23%; the cumulative sales volume was 0.3592 million vehicles, a year-on-year increase of 377.62%.

Impressive performance is inseparable from the core competitive advantage established by Chongqing Sokon Industry Group's sustained high R&D investment.

Each year, Chongqing Sokon Industry Group's R&D investment exceeds 10% of its revenue. Last year, the annual R&D investment was 4.438 billion yuan, accounting for 12.38% of revenue, a year-on-year growth of 42.90%.

Currently, Chongqing Sokon Industry Group has taken a leading position in areas such as three-electric technology, range extension technology, electronic electrical architecture, and whole vehicle platforms. For example, the all-new Chongqing Sokon Industry Group super range-extended system was officially launched at the Guangzhou Auto Show, based on the "Saiyi (C2E) range extension architecture" and "RoboREX intelligent control technology", providing leading advantages in industry in terms of quietness, integration, and efficiency.

This system, empowered by the "Saiyi (C2E) range extension architecture" and "RoboREX intelligent control technology", achieves intelligent active energy management. It reduces comprehensive fuel consumption by 15%, reduces range extender noise perception by 90%, and exceeds 3.6 kWh/L in actual efficiency, equivalent to generating over 3.6 kWh with 1L of petrol, reaching the highest industry production level of range extenders.

Chongqing Sokon Industry Group's leading technology has formed a strong product force, driving the Wenjie series to become China's leading luxury new energy auto brand, establishing a strong brand advantage in the high-end vehicle market.

According to the West Securities research report, based on the Jielanlu official account survey, in the first half of 2024, in the Chinese market luxury brand NPS rankings, AITO Wenjie ranked first, surpassing BBA, Li Xiang, NIO and other brands with a NPS (Net Promoter Score) as high as 83.7%, far ahead of other luxury brands.

III. Conclusion

Overall, Chongqing Sokon Industry Group Stock has demonstrated a healthy fundamental basis and validated growth in the market, which is not only attractive to short-term funds but also expected to attract the attention and allocation of long-term funds.

In fact, prior to this, the capital markets had already given positive feedback on the growth prospects of Chongqing Sokon Industry Group Stock. Data shows that as of the closing on December 2, Sokon Industry Group Stock has risen by 75.52% this year, leading the industry. In addition, fueled by a series of positive news, in the past six months, Sokon Industry Group Stock has received "shareholding" ratings from four brokerages and "buy" recommendations from 23 brokerages, gaining favor from investors.

In the author's view, with the official implementation of the regular adjustment plan after the market close on December 13, Sokon Industry Group Stock's liquidity in the A-share market is expected to further improve, which will be beneficial for its subsequent valuation increase. Therefore, we have more reasons to continue to pay attention to Sokon Industry Group Stock.