Public Fund Private Placement Investment Strategy: Analysis of Effectiveness, Risk-Return, and Sustainability

This analysis is based on the provided market background information and combined with the general characteristics of China’s private placement market. Since 2024, the amount of private placements allocated to public funds has exceeded RMB 34 billion, an increase year-on-year. As of December 19, the floating profit is nearly RMB 11 billion, with a floating profit ratio of about 32%. Although the above data has not been directly verified through external sources, from the perspective of the core mechanism of private placement strategies, in the case of a good market situation, combined with the issue price discount (usually 80%-90% of the market price) and stock price increases, the 32% floating profit ratio is reasonable [0]. Industry views suggest that policy support (such as refinancing rule optimization), increased market activity (stock market recovery), and growing corporate financing demand are the main drivers of the current attractiveness of private placement investments [0].

1. Coexistence of core advantages and risks in private placement strategies
   : Returns depend on the safety cushion provided by the issue price discount and subsequent stock price upside potential. Long-term average returns are higher than the secondary market average but with greater volatility; risks include 6-12 months of lock-up period risk, liquidity risk after the lock-up period ends, operating risks of the target company, and overall market risk [0].
2. Sustainability of floating profits affected by multiple factors
   : Policy continuity, market environment, corporate financing demand, and investor sentiment are key to determining future sustainability. If regulatory authorities tighten private placement rules, the stock market shifts from bull to bear, or excessive participating funds lead to narrower discounts, all may affect the sustainability of private placement returns [0].

• Risk Points
  : Lock-up period risk may prevent timely stop-loss during market fluctuations; liquidity risk may impact stock prices due to large-scale sell-offs after the lock-up period ends; uneven target quality tests fund companies’ screening capabilities; policy changes or market reversals may quickly erode floating profits [0].
• Opportunity Window
  : Against the backdrop of policy support and increased market activity, there are still layout opportunities in the private placement market, especially private placement projects of high-quality enterprises may bring long-term returns [0].

Public fund private placement investment strategies achieved significant floating profits in 2024, with their effectiveness mainly derived from issue price discounts and market conditions support. However, this strategy is not risk-free, and potential risks such as lock-up periods and liquidity need to be noted. Future sustainability depends on the synergy of multiple factors including policy, market, enterprises, and investors. It is recommended to further verify the accuracy of core data and pay attention to dynamic market changes.