First order since the registration system: Zhejiang Huhang-Yong Integration Town Yang Development unlocks new dual-platform value space

Against the backdrop of deepening comprehensive registration systems and improving the quality and efficiency of state-owned enterprises, the capital market has witnessed a milestone event in cross-market integration—Zhejiang Hangzhou-Ningbo (00576.HK) plans to absorb and merge with Zhenyang Development (603213.SH) through a share swap, becoming the first H-share to A-share application accepted by the Shanghai Stock Exchange since the implementation of the registration system. This capital operation not only represents Zhejiang Hangzhou-Ningbo’s strategic leap in connecting with the domestic capital market and achieving dual listings in “A+H,” but it also serves as a model that precisely aligns with regulatory guidance and deeply explores corporate value. Under the resonance of policy dividends and market opportunities, this integration not only opens up new space for cross-cycle development for the enterprise but is also expected to become a quality target in the capital market that combines defensiveness and growth potential, supported by a solid fundamental, clear dividend planning, and considerable room for valuation recovery.

The benchmark significance of the first case under policy tailwinds

In September 2024, the China Securities Regulatory Commission issued the “Opinions on Deepening the Reform of the M&A Market for Listed Companies,” clearly supporting mergers and acquisitions between listed companies under the same control, providing solid policy support for resource integration. Zhejiang Hangzhou-Ningbo’s operation is a proactive response to regulatory guidance—as the first application case for H-share to absorb and merge with A-share since the registration system, its demonstration effect is particularly prominent.

Historically, similar transactions such as Longyuan Power’s merger with ST Pingneng and China Energy Construction’s merger with Gezhouba have all received high approval votes from shareholder meetings. Similarly, this time, Zhejiang Hangzhou-Ningbo’s merger with Zhenyang Development also received over 90% of the approval votes, fully demonstrating the market’s high recognition of this type of integration model. The successful advancement of this first case not only verifies the operability of the policy but also opens up imaginative space for subsequent similar transactions.

“A+H” dual platform synergy opens strategic depth

A solid fundamental and continuous dividend measures form the value cornerstone of this integration. As a leading enterprise deeply engaged in the highway sector, Zhejiang Hangzhou-Ningbo has upheld its cash dividend commitment for 28 consecutive years since listing on the Hong Kong Stock Exchange in 1997. Its core assets, including the Shanghai-Hangzhou-Ningbo Expressway and the Shangsan Expressway, run through the economic hinterland of the Yangtze River Delta, with a total asset scale of 217.2 billion yuan and over 1,000 kilometers of core road network mileage, maintaining its leading position in the industry. In the first half of 2025, Zhejiang Hangzhou-Ningbo achieved steady growth of 3.8% in revenue and 4.0% in net profit attributable to shareholders, leading both in scale and growth rate amid a backdrop of slowing growth in most peers, highlighting its profit resilience. Notably, this transaction clarifies the dividend plan post-merger: within three accounting years after the transaction is completed, the annual cash dividend will not be less than 0.41 yuan per share, a 6.5% increase compared to 2024, providing shareholders with a solid income safety cushion.

The construction of the “A+H” dual platform will open up strategic depth for cross-cycle development for the enterprise. The A-share market, with its active liquidity, vast investor base, and rapid policy response capability, becomes the main battlefield for Zhejiang Hangzhou-Ningbo to align with domestic industrial policies and gain valuation premiums; the H-share market maintains stable participation and openness of international capital. Coupled with the existing REITs platform, the three together form a capital closed loop of internal and external circulation, enabling Zhejiang Hangzhou-Ningbo to flexibly respond to interest rate fluctuations and changes in market cycles, precisely capturing opportunities for capital operations during industry window periods.

Investment value stands out, and the space for valuation recovery is clear

The dual-platform pattern formed after this merger will greatly enhance Zhejiang Hangzhou-Ningbo’s ability to allocate resources across cycles. The A-share platform is conducive to capturing opportunities such as domestic industrial mergers, asset injections, and quickly responding to national strategies like “integrated energy” and “smart transportation”; the H-share market opens a professional channel for promoting global capital project layouts and attracting international long-term strategic cooperation capital. This multi-level and three-dimensional capital toolbox benefits Zhejiang Hangzhou-Ningbo in flexibly controlling funding costs under different interest rate environments and market cycles.

This merger of Zhejiang Hangzhou-Ningbo and Zhenyang Development has long since transcended simple asset accumulation; rather, it is a layout that combines capital wisdom with strategic foresight. It not only explores an innovative path for H-share companies to return to A-shares under the registration system, achieving a deep integration of state capital efficiency and market mechanism vitality, but also provides a replicable value enhancement path for numerous state-owned enterprises with potential for valuation recovery. In the current capital market that pursues certain value, Zhejiang Hangzhou-Ningbo will continue to create long-term value for shareholders with a clear dividend plan, optimized capital structure, and broad development space, also writing a new model for cross-market integration in the capital market.