2026 Beginning of the Year Undervalued Stock Valuation Recovery Begins: 21 A-share Companies Announce Valuation Increase Plans, *ST Sunshine Surges 160%, Where Are the Investment Opportunities?

Ask AI · What drives the 160% surge in *ST Sunshine’s stock price behind the scenes?

The Paper reporter: Wu Yongjiu Zhang Wan · The Paper editor: He Jianchuan

As the 2025 annual report season gradually advances, the A-share market at the start of 2026 has sparked a wave of valuation-repair enthusiasm for long-term undervalued companies that are trading below net asset value. According to statistics by reporters from The Daily Economic News (hereinafter referred to as The Paper reporters), in the first two months of this year, 21 A-share listed companies have already released 2026 annual “Valuation Improvement Plans” (Changyu A filed this plan because its B-share stocks have long been trading below net asset value; excluding that). Under provisions in the relevant requirements of the “Guidelines No. 10 on Listed Company Supervision — Market Value Management,” these companies must formulate special plans to improve their valuation. The trigger is that, for 12 consecutive months, the closing price on every trading day has been lower than the audited net asset value per share from the most recent fiscal year. In this context, both *ST Sunshine and Green Power Generation have recently seen a round of strong stock-price rallies. Their latest price-to-book ratios have exceeded 1x, making them the “forerunners” of valuation repair.

Two benchmark leaders break through strongly first: *ST Sunshine and Green Power Generation exit the undervalued zone

According to data from iFinD of Tonghuashun, as of the close on March 23, the average price-to-book ratio among 21 long-term undervalued companies was 0.83x, showing a differentiated landscape for valuation repair. Among them, *ST Sunshine and Green Power Generation performed outstandingly, with price-to-book ratios of 1.35x and 1.12x respectively; they have already successfully exited the undervalued range. By contrast, Ruitong Trading’s price-to-book ratio is the lowest at 0.45x, implying greater pressure on valuation repair.

Judging by stock-price performance, the two companies that first exited the undervalued status both turned to a rising trend after releasing their “Valuation Improvement Plans,” becoming benchmark cases for valuation repair.

Among them, *ST Sunshine has already released a “Valuation Improvement Plan” for two consecutive years. On April 19, 2025, Sunshine Co., Ltd. (now *ST Sunshine) released its first “Valuation Improvement Plan.” The core focus of market-value management centered on two directions: increasing holdings by the controlling shareholder and directors/supervisors/senior executives, and merger and acquisition restructuring. On the same day, the company announced that because its 2024 performance did not meet the requirements, it would be subject to delisting risk warning (*ST), putting it under dual pressure of both valuation repair and “shell-protection.” After the company’s stock price briefly rose near the bottom in late April 2025 for nearly two months, it entered a sideways-to-volatile trading range lasting five months.

The turning point came with a change in control. From November 2025 to January 2026, the original controlling shareholder transferred all of its 29.97% stake in the company in two separate rounds via share agreements to a natural person, Liu Dan. At the end of January this year, Liu Dan officially became the company’s new controlling shareholder and actual controller. Driven by this positive catalyst, *ST Sunshine’s stock price accelerated upward in parallel. As of March 23, the year-to-date increase had already exceeded 40%. If measured from the date of the first plan release on April 19, 2025, the cumulative increase reaches 161.54%.

Positive signals at the earnings level further supported the stock price. The company’s 2025 annual report shows that although revenue and net profit attributable to the parent continued to decline further compared with 2024, the audited operating revenue after adjustments for extraordinary items reached RMB 333 million, and it did not trigger the standards for delisting risk warning. The company has applied to the Shenzhen Stock Exchange to withdraw the delisting risk warning and is expected to achieve “delist-avoidance and shed *ST status,” laying a foundation for continued valuation repair. In addition, the company’s wholly owned subsidiary plans to lend up to RMB 550 million to a related party, to repay the company’s debts and support business development, further easing funding pressure and improving market expectations.

As a central state-owned enterprise, Green Power Generation released its “Valuation Improvement Plan” on February 28, 2026. It will mainly promote valuation repair by strengthening shareholder returns and stabilizing market expectations, focusing specifically on two key measures: dividend payments and share buybacks. The company clearly pledged that the profits cumulatively distributed in cash during the 2025–2027 fiscal years will be no less than 30% of the average annual distributable profits realized over those three years; meanwhile, based on the orderly advancement of repurchasing the remaining shares, it will selectively initiate a second round of share buybacks. On March 9, the company completed, half a year early, the buyback plan currently being implemented at the maximum limit, demonstrating its sincerity in driving valuation repair.

Meanwhile, the company’s stock price started a wave of strong gains at the end of February. From March 10 to March 12, it consecutively hit three daily limit-up closes, and on March 13 it set a new intraday high in nearly three years at RMB 13.76 per share. As of March 23, the largest gain this year reached 67.4%, and the stock price also broke above its net asset value per share during this rally. Calculated using the March 23 closing price of RMB 10.86 and the most recent net asset value per share of RMB 9.68, the price-to-book ratio is 1.12x, successfully exiting the undervalued status.

Market value management tools bloom in multiple ways: benchmark companies like Ta Pai Group implement valuation repair efficiently and accelerate

The strong performances of these two benchmarks behind the scenes are driven by the release of “Guidelines No. 10 on Market Value Management,” issued by the CSRC in November 2024, which imposed specific requirements on long-term undervalued companies. Since then, the investment value of undervalued stocks has been highlighted continuously. From an asset-based logic perspective, undervalued stocks mean investors can buy shares at a price below the company’s actual asset value; if the company’s asset quality is good and it has potential for operational improvement, it may be able to deliver substantial returns in the future. At the same time, some undervalued stocks have stable profitability and ongoing dividend policies. Even if the stock price is still below net asset value, its dividend yield may remain at relatively high levels, providing ongoing cash dividend returns for investors seeking stable returns. A recent research report by Shenwan Hongyuan also stated that both the traditional high-dividend investment mainline and the undervalued-stock mainline catalyzed by potential market value management are worth paying attention to.

After reviewing by The Paper reporters, among the 21 companies, multiple firms such as Ta Pai Group, Shandong Iron and Steel, and Linyang Energy not only planned a rich set of market-value management tools to improve valuation, but also implemented them with high efficiency, showing strong momentum for valuation repair.

Ta Pai Group’s plan released for 2026 is its second “Valuation Improvement Plan.” The core framework of the two plans is basically the same: both revolve around eight major measures, focusing on the core business, merger and acquisition restructuring, employee stock ownership plans, high-percentage dividends, investor relations and communications management, information disclosure quality, share buybacks and cancellations, and increases in holdings by shareholders and directors/supervisors/senior executives. They basically include most of the market value management tools required by the CSRC, forming a relatively complete system.

In terms of execution, Ta Pai Group moved quickly and with strong sincerity. On March 18, 2025, the company disclosed its first “Valuation Improvement Plan.” On the same day, it also released its 2024 profit distribution plan and a 2025 employee stock ownership plan. Later that same year in August, it rolled out a RMB 0.5 billion to RMB 1 billion buyback plan to support the employee stock ownership plan; in October, a shareholder and its concerted-action parties completed share increases. In early December, it announced that the purpose of the share repurchase held in inventory would be changed to cancellation and capital reduction. A series of measures were implemented in an orderly manner, forming a multi-dimensional push pattern of “dividends + employee stock ownership + buybacks + share increases.”

On February 28, 2026, Ta Pai Group released its second “Valuation Improvement Plan,” and subsequently on March 19 it released the 2025 profit distribution plan and the 2026 employee stock ownership plan, with an even faster implementation pace.

The execution results have been significant. In 2025, Ta Pai Group achieved a double improvement in both performance and market value. On the operating side, the company’s 2025 revenue was RMB 4.107 billion, down 3.99% year over year on a slight basis. Net profit attributable to the parent was RMB 634 million, up 17.87% year over year, with a steady improvement in profitability. On the market value side, the company’s stock price rose 24.22% in 2025 (pre-rights adjustment), the highest among the 21 companies for the same period. As of March 23, 2026, total market cap reached RMB 10.344 billion. As of the close that day, the company’s price-to-book ratio was 0.87x.

Shandong Iron and Steel has also released a “Valuation Improvement Plan” for two consecutive years. It is also currently the only company among the 21 that has disclosed an annual evaluation report for its 2025 valuation improvement plan, clearly presenting last year’s plan execution and effects. In 2025, the company planned multiple measures, including dividends, buybacks, share increases, merger and acquisition restructuring, equity incentives, and employee stock ownership. In actual implementation, the focus mainly advanced along three major directions: buybacks, share increases, and merger and acquisition restructuring.

Specifically, during 2025, the company cumulatively repurchased shares worth RMB 79.9874 million, and its controlling shareholder, Shangang Group, increased its holdings by RMB 14.0982 million, and both completed the related plans on time. However, it needs to be noted that both actions began in 2024; 2025 was the execution and wrap-up stage, and no new buyback or share-increase plans were announced for the full year. In terms of merger and acquisition restructuring, Shandong Iron and Steel completed the acquisition of 100% equity in Laiwu Iron and Steel Group Yinshan Type Steel Co., Ltd. in November 2025, effectively resolving issues such as capacity misalignment, competition in the same industry, and related-party transactions.

On the operating side, driven by a series of initiatives, Shandong Iron and Steel returned to profitability in 2025. It is expected that net profit attributable to the parent will be around RMB 100 million, an increase of nearly RMB 3.0 billion year over year compared with the RMB -2.891 billion in 2024. The company stated that its operating quality and risk resilience have been significantly strengthened. However, looking at valuation performance, the company still has not escaped the undervalued status. As of March 23, its price-to-book ratio is 0.83x.

Compared with 2025, Shandong Iron and Steel’s valuation improvement plan for 2026 deleted related statements about merger and acquisition restructuring, keeping core measures such as dividends, buybacks, and share increases, and it additionally added capital operations. However, regarding the specific direction and measures of “capital operations,” the company did not further clarify. The Paper reporter called Shandong Iron and Steel’s securities department as an investor. The relevant staff said that capital operations mainly revolve around optimizing the company’s internal existing assets, but specific matters must meet information disclosure requirements before they can be disclosed, and the exact details are currently not convenient to share.

Regarding dividend and buyback issues investors care about, the staff said that ordinary annual dividend proposals must be submitted for approval at the shareholders’ meeting of the prior year; if there is any, investors can view it from the relevant announcement. The company’s philosophy is that as long as it has the conditions for dividends, it will actively promote dividend distribution. Of course, over the past two years the company’s production and operations have faced some difficulties, but the direction is developing in a progressively better trend. As for buybacks, this year the market overall has been improving; buybacks need to be determined in real time according to the capital market and stock-price conditions. It is understood that Shandong Iron and Steel has not distributed dividends for two consecutive years. Both of its valuation improvement plans also mention that it will appropriately initiate buybacks.

Linyang Energy demonstrated its repair resolve with “rapid execution.” On February 9, this company issued its “Valuation Improvement Plan,” focusing on profit distribution, share buybacks, and shareholder share increases. On the day the plan was released, it executed the relevant measures with a “one-click three-step” approach: it simultaneously launched a RMB 150 million to RMB 300 million buyback plan to be used for equity incentives, announced the cancellation of 18.949 million shares of repurchased shares held in inventory, and its controlling shareholder plans to increase holdings by RMB 50 million to RMB 100 million—using multiple measures to stabilize market expectations.

Dividend stability: high-dividend coal stocks meet performance tests; Ta Pai Group pledges to deliver

Different from the valuation-improvement strategies with rich tools and high execution efficiency mentioned above, some companies choose to reward investors with continuous, stable, and predictable dividend policies. As of March 23, among the 21 companies mentioned above, seven—such as Hengyuan Coal and Power, Ta Pai Group, Huaibei Mining, and Ningbo Bank—had dividend yields over 3% in the past nearly 12 months, highlighting their high-dividend characteristics.

Hengyuan Coal and Power and Huaibei Mining are both in the coal mining industry. Their dividend yields over the past nearly 12 months were as high as 6.15% and 5.32% respectively, ranking at the top. Looking at historical data, over the past four years, the dividend payout ratio of the two companies has steadily improved overall. From 2021 to 2024, their annual dividend yields have been maintained above 5%, forming a stable high-dividend style. Both companies have also clearly stated in their “Valuation Improvement Plans” released recently that they will stabilize investors’ return expectations through dividends. Among them, Huaibei Mining stated it will increase the cash dividend payout ratio each year from 30% to 35% for 2025–2027.

However, it should be noted that both companies’ 2025 performance declined. Hengyuan Coal and Power saw losses in 2025, with net profit attributable to the parent expected to be between RMB -190 million and RMB -260 million, a big gap compared with its profit of RMB 1.072 billion in 2024. Huaibei Mining’s 2025 net profit attributable to the parent is expected to be around RMB 1.495 billion, which is about 69.21% lower year over year compared with RMB 4.855 billion in the same period of 2024, with a relatively large decline in performance. Will this affect dividends for 2025? The Paper reporter called Huaibei Mining’s securities department as an investor. The staff member who answered said that the company is about to approve its 2025 annual report, and all the relevant data have basically already come out. Early in the year, the company pledged that the cash dividend payout ratio would not be less than 35%, so it will definitely exceed that number by far. But because profits in 2025 fell by a relatively large amount, earnings per share will definitely be lower than last year. They also said coal is an industry with relatively stable fundamentals. Although the company’s overall performance decline in 2025 was relatively large, among coal-listed companies of similar scale, its performance is still relatively in the front ranks. The company has always adhered to steady and sustainable dividend payments.

Compared with the two companies above, Ta Pai Group’s high-dividend commitment is more certain. In its “Three-Year Shareholder Return Plan (2024–2026),” the company clearly pledged that from 2024 to 2026, annual cash dividends will, in principle, be no less than 70% of the company’s net profit attributable to the parent for that year; and the amount of cash dividend per share each year will, in principle, be no less than RMB 0.45. The 2025 profit distribution plan the company released most recently on March 19 enabled this commitment to land efficiently: it proposes to distribute cash dividends of RMB 4.8 per 10 shares to all shareholders (including tax), with an estimated cash dividend payout of RMB 564 million. Combined with the buyback amount of RMB 54 million for that year, the total payout to shareholders is about RMB 618 million, accounting for 97.42% of the company’s net profit attributable to the parent for 2025. Based on the March 23 closing price, the latest dividend yield is about 5.45%. In addition, the company plans to add interim dividends in 2026 to further optimize the dividend schedule. Benefiting from the stable dividend policy and a relatively solid operating fundamental, Ta Pai Group’s annual dividend yield has been above 5% for three consecutive years, making it a high-quality representative among high-dividend undervalued targets.

Disclaimer: The contents and data in this article are for reference only and do not constitute investment advice. Please verify before using. All risks are borne by you.

The Daily Economic News