Unlocking Value

The A-shares of China Merchants Bank (CMB, 600036 SH) is the single largest investment of China Merchants China Direct Investments (CMCDI, 133 HK).

CMB shares alone account for 34% of CMCDI’s total assets as at 30 June 2024.

We, Argyle Street Management, propose that CMCDI shall sell assets and use the proceeds to buy back shares. Clearly, CMB shares is among the easiest asset to sell.

Given the recent ~30% rally of CMB share price, CMCDI should start selling CMB shares.

Many shareholders have asked us:   given that both CMCDI and CMB are under the China Merchants Group, can CMCDI really sell its shares in CMB?

We do not know the answer.  However, we do know that CMCDI did sell most of their CMB shares many years ago.

In 2007, CMCDI used to own 0.83% A-shares in CMB (~122.6 million shares).

Between 2008 and 2014, CMCDI sold 119.3 million shares, which was equivalent to ~0.81% of outstanding shares in 2007. 

Now, CMCDI still holds 55.2 million shares, after taking into account the 23.8 million right issue shares in 2010/2013 and 28.2 million bonus shares in 2009.

Clearly, selling CMB shares is by no means a taboo for CMCDI.

Moreover, CMCDI currently only own ~0.2% outstanding shares in CMB. Selling this ~0.2% will hardly weaken China Merchants Group’s control over CMB, given that the latter already owns 29.97% in CMB.

In fact, CMCDI can even sell the CMB shares to its parent China Merchants Group (perhaps at some discount to market price). This will be a connected transaction and will require independent shareholder approval. We are prepared to vote in favor, if the disposal proceeds are applied towards share buybacks.

If you are new to CMCDI, read our primer.

Chat with us on WeChat or WhatsApp:

💬 WeChat ID: ASM_Argyle

💬 WhatsApp ID: +852 6317 6371

🖥️ UnlockValueChinaMerchants.com

📧 ChinaMerchants@asmhk.com

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招商银行股份有限公司（“招商银行”，股票代码：上海600036）是招商局中国基金（“中国基金”，133 HK）的最大单一投资。

截至2024年6月30日，招商银行的股票单独占基金总资产的34%（这还是在9月和10月份招商银行股票价格反弹之前）。

我们，Argyle Street Management，提议中国基金应该处置部分资产，并用处置所得资金回购股票。很明显，招商银行的股票是最容易处置的。

鉴于近期招商银行股价大涨 30%，中国基金应该趁高出售招商银行股票。

其他股东们普遍向我们提问：鉴于中国基金和招商银行都隶属于招商局集团，中国基金真的能出售其持有的招商银行股份吗？

我们不知道答案。然而，我们知道中国基金过去确实出售了他们持有的绝大多数招商银行股份。

2007年，中国基金共持有招商银行0.83%的股份(大约为1.226亿股)。

从2008年到2014年，中国基金共出售了1.193亿股招商银行股份，这相当于2007年招商银行总发行股份的0.81%。

在出售后到目前，中国基金仍持有5,520万股招商银行股份，包括了中国基金在2010及2013年认购的2,380万股招商银行供股以及2009年获得的招商银行派发的2,820万股红股。

很明显，出售招商银行的股票绝非禁忌。

此外，中国基金目前仅持有招商银行0.2%的流通股份。鉴于招商局集团合计控制招商银行29.97%的股份，出售这些股份几乎不会削弱招商局集团对招商银行的控制。

实际上，中国基金甚至将招商银行股票出售给母公司招商局集团（可能以略低于市场价出售）。考虑到这是一项关联交易，将需要独立股东的批准。如果出售所得资金将用于回购股票的话，我们将准备投赞成票。

如果您刚开始了解中国基金，请阅读我们的指南。

欢迎随时与我们联系：

💬 微信: ASM_Argyle

💬 WhatsApp: +852 6317 6371

🖥️ UnlockValueChinaMerchants.com

📧 ChinaMerchants@asmhk.com