Adjusting the "conversion rate," these brokerages are taking action!
According to the announcement from Shenwan Hongyuan Securities, starting from October 13, the margin securities and the conversion rates for margin trading will be adjusted. The conversion rates for LEAD INTELLIGENT, NJG, and others will be raised from 0 to between 30% and 70%. At the same time, Guorong Securities has also increased the conversion rates for individual stocks such as SMIC and Haiguang Information. It is worth noting that on October 9, several brokerages had already uniformly adjusted the conversion rates for certain stocks to 0. The conversion rate for margin trading affects investors' financing capabilities, and an adjustment to 0 means that the stock loses its collateral function
Market fluctuations have caused the financing and securities lending margin ratios of overvalued technology stocks to take a "roller coaster" ride.
According to the announcement from Shenwan Hongyuan Securities, the margin securities and financing margin ratios will be adjusted after the market closes on October 10, effective from October 13. Among them, the margin ratios for LEAD INTELLIGENT, NJG, Mannesmann, LinkTech, Haiguang Information, Longbridge, Baiwei Storage, SMIC, and Huaxin Yongdao have been raised from 0 to between 30% and 70%. On the same day, Guorong Securities and others also announced an increase in the margin ratios for individual stocks such as SMIC and Haiguang Information.
It is worth noting that on October 9, several brokerages, including Dongfang Caifu Securities, Guorong Securities, and Dongfang Securities, confirmed that the financing and securities lending margin ratios for 9 A-share stocks, including SMIC, Baiwei Storage, and Luqiao Information, would be uniformly adjusted to 0.
SMIC and Others' Margin Ratios Return to 70%
On October 10, Shenwan Hongyuan Securities released an announcement regarding the adjustment of margin securities and target securities for financing and securities lending. The announcement stated that after the market closes on October 10, Shenwan Hongyuan Securities will make the following adjustments to margin securities and their margin ratios, effective from October 13, 2025.
The margin ratios for LEAD INTELLIGENT, NJG, Mannesmann, LinkTech, and others have been adjusted to 65%, Baiwei Storage to 50%, and Haiguang Information and SMIC from 0 to 70%, while Huaxin Yongdao has been adjusted from 0 to 30%. At the same time, the margin ratios for Tongyu Heavy Industry and Chuangyitong have been adjusted from 65% to 0.
On the same day, Guorong Securities and others also released announcements to increase the margin ratios for individual stocks such as SMIC and Haiguang Information. Among them, SMIC and Haiguang Information have both been adjusted to 65%. Meanwhile, the margin ratios for Tongyu Heavy Industry and Chuangyitong have been adjusted from 65% to 0.
Meeting Compliance Requirements
The financing and securities lending margin ratio, in simple terms, is the "discount" applied to the market value of stocks when investors use them as collateral for financing. The higher the ratio, the more funds can be borrowed; an adjustment to 0 means that the stock temporarily loses its function as collateral for financing.
According to the "Implementation Rules for Financing and Securities Lending Transactions of the Shanghai Stock Exchange," "Implementation Rules for Financing and Securities Lending Transactions of the Shenzhen Stock Exchange," and "Implementation Rules for Financing and Securities Lending Transactions of the Beijing Stock Exchange," A-share stocks with a static price-to-earnings ratio above 300 times or negative numbers, as well as warrants, have a margin ratio of 0%.
On September 30, Guorong Securities detailed the situation of 9 stocks reaching the "red line" in terms of price-to-earnings ratios. SMIC, Baiwei Storage, Tianma Technology, Ruisheng Intelligent Technology, Mannesmann, Honghui Fruits and Vegetables, Yongding Co., Luqiao Information, and Haikongdiao all had static price-to-earnings ratios exceeding 300 times, with Luqiao Information having the highest at 947 times.
Therefore, on October 9, several brokerages, including Dongfang Caifu Securities, Guorong Securities, and Dongfang Securities, confirmed that the financing and securities lending margin ratios for 9 A-share stocks, including SMIC, Baiwei Storage, and Luqiao Information, would be uniformly adjusted to 0 This adjustment will directly compress the space for investors to use these stocks for leveraged operations. Dongfang Securities specifically reminded in yesterday's announcement: "The adjustment of the marginable securities conversion rate will lead to changes in the available margin balance, and investors should pay attention to the related risks." If investors hold a large amount of these stocks in their margin accounts, their total margin will decrease, which may lead to pressure to add margin or reduce liabilities.
However, these adjustments have always been dynamic, and when the static price-to-earnings ratio of the stocks falls below 300 times, their conversion rate can be restored.
Due to the widespread market adjustment on October 10, technology stocks experienced a large-scale decline in prices, so some individual stocks have already fallen below a 300 times price-to-earnings ratio. According to data released by Guorong Securities on October 10, after the market close on the 10th, Haiguang Information's static price-to-earnings ratio for this week was 290.68 times, while SMIC's was 246.747 times.
Risk Warning and Disclaimer
The market has risks, and investment should be cautious. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial conditions, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investing based on this is at your own risk
