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Regular sample stock adjustment will be implemented in SZSE serial indexes including SZSE Component Index, SME Index, ChiNext Index and SZSE 100 Index according to index compilation rules, Shenzhen Stock Exchange (SZSE) and Shenzhen Securities Information Co., Ltd. (SSIC) announced. SSIC also disclosed that cross-market indexes like Cninfo 100 Index will have sample stocks adjusted regularly too. The adjustment will be officially carried out on the first trading day in July 2016.
In SZSE Component Index, 50 sample stocks will be replaced, with Tianma and Jinsheng Mechanical & Electrical etc. to be replaced by Focus Media and Kunlun Wanwei etc. In SME Index, 10 sample stocks will be adjusted, with ETi and Dunan to be replaced by etc. Tianqi Lithium and Focus Media etc. In ChiNext Index, 7 sample stocks will be changed, with NanFeng Corporation and CTI Testing etc. to be replaced by EVE Energy and Thundersoft etc. In SZSE 100 Index, 10 sample stocks will be adjusted, with Weifu Hi-tech and Xinrong Environment etc. to be replaced by Tianqi Lithium and Shanghai Raas etc. In Cninfo 100 Index, 9 sample stocks will be changed, with Liaoning Chengda and Qingdao Haier etc. to be replaced by Everbright Securities and Western Securities etc.
Among the 50 companies to be introduced in SZSE Component Index, only one company is listed on SZSE main board while 31 and 18 of them are listed on SME board and ChiNext respectively. After the adjustment, the weight ratio of companies listed on SZSE Component Index main board, SME board and ChiNext will be 42:39:19, which is more similar to the actual board distribution of Shenzhen market.
Data indicates that after the adjustment, IT industry keeps being the No. 1 weighted in SZSE Component Index with a ratio of 23% while the No. 2 weighted will be discretionary consumer industry with a ratio of 16%. The adjusted SZSE Component Index structure is more similar to the Shenzhen market structure, highlighting the structural feature of emerging industry dominance. Furthermore, after the adjustment, in ChiNext Index sample stocks, companies of IT industry will increase to 50 in quantities, occupying total index weight of nearly 50% which fully demonstrates the strategic layout of a ChiNext market serving emerging industries and new economy.
Strong growth is still the most prominent feature of Shenzhen market. According to the 2015 annual report data, the 2015 net profit growth rates of the latest sample stocks in SZSE Component Index, SME Index and ChiNext Index are 18.75%, 40.06% and 45.44% respectively. In contrast, CNINDEX A, representing the whole A-share market, has a 2015 net profit growth rate of only 1.22%.
