The state supports the listing of mixed-reformed enterprises, and the state-owned securitization rate in these provinces will exceed 50% by the end of the year
As an important breakthrough in the reform of state-owned enterprises, the mixed reform is accelerating into an "upgraded version", and the capital market will become an important position for deepening the mixed reform.
The State Council recently issued a document encouraging the listing of pilot enterprises for mixed reform.
According to expert analysis, there is still much room for improvement in the asset securitization rate of central enterprises and state-owned enterprises.
The capital market will play a significant role in the mixed reform of state-owned enterprises. Actively promoting the listing of state-owned enterprises and increasing the securitization rate of state-owned assets are expected to exert multiple positive effects.
There is still much room for state-owned enterprises to go public
The State Council recently issued the "Opinions on Further Improving the Quality of Listed Companies" (hereinafter referred to as the "Opinions"), and proposed 17 policy measures to further improve the quality of listed companies.
The "Opinions" point out that the listing of pilot companies for mixed ownership reforms is encouraged and supported.
Give full play to the role of securities market prices, valuations, and asset evaluation results in the pricing of state-owned assets transactions, and support state-owned enterprises to carry out mixed ownership reforms relying on the capital market.
At present, from central enterprises to local state-owned enterprises, a number of mixed reform enterprises are actively promoting listing.
According to data released by the State-owned Assets Supervision and Administration Commission, since the 18th National Congress of the Communist Party of China, central enterprises have implemented more than 3,700 mixed reforms and introduced more than 1 trillion yuan in non-public capital. The number of mixed-ownership enterprises accounted for more than 70%, an increase of nearly 20 from the end of 2012. percentage point.
65% of the total assets of central enterprises have entered listed companies, and 61% of operating income and 88% of total profits come from listed companies.
Li Hongjuan, deputy director of the Enterprise Research Office of the Institute of Economic System and Management of the National Development and Reform Commission, told China Business News that the form of promoting the market-oriented reform of state-owned enterprises through state-owned asset securitization has been widely promoted, and the pace of state-owned asset securitization in various regions is increasing and accelerating. Many state-owned enterprises at different levels in the locality have made arrangements for the listing of enterprises, and the securitization rate of local state-owned capital has been further improved with the advancement of a series of supporting reform policies for state-owned enterprises.
From the perspective of the reform practice of state-owned capital securitization, the reform documents of state-owned enterprises in various regions put forward clear target plans for the securitization of state-owned capital. Most provinces proposed that the state-owned asset securitization ratio should reach more than 50% by the end of 2020.
For example, Shanghai, Beijing, Tianjin and other places proposed that the asset securitization of provincial enterprises should reach more than 50%, Shandong proposed to reach more than 60%, Jiangxi proposed to reach more than 70%, and Zhejiang proposed to reach 75%.
Li Hongjuan said that under the strong impetus of the new round of reform policies focusing on “capital management”, the securitization rate of state-owned assets has been significantly increased. The securitization rate of state-owned assets in cities such as Shenzhen, Hangzhou, and Guangzhou has all exceeded 50%, but it is relatively low. The securitization rate of the world's first-class group companies, the current asset securitization rate of central enterprises and state-owned enterprises is still on the low side, and there is still more room for improvement. Even at the domestic level, the securitization rate of some local state-owned enterprises is not enough 14%, which is significantly lower than central enterprises and non-state-owned enterprises.
According to calculations by ICBC International, the securitization rate of state-owned enterprises at the end of 2019 was only 21.3%, of which the securitization rate of local state-owned enterprises was only 13.7%.
The service industry, transportation industry and other fields where the asset securitization rate of state-owned enterprises is low may release more than 10 trillion incremental listed assets.
Not all mixed reform companies have to be listed
The "Opinions" encourage and support the listing of pilot enterprises of mixed ownership reform.
Liu Xingguo, a researcher at the Research Department of the China Enterprise Confederation, told China Business News that mixed-reformed enterprises are a group of state-owned enterprises that have more optimized systems and mechanisms and more reasonable efficiency and benefits. Obviously they can better meet the requirements for listing. Of course, they should be the first choice to cultivate listing. .
For mixed reform enterprises, going public has many meanings.
According to Liu Xingguo's analysis, one is to affirm the effect of mixed reform; the second is to continue to support mixed reform enterprises, and to further deepen mixed reform, and complete the second mixed reform; third, to provide market-based exit channels for mixed reform participants.
Li Hongjuan told CBN reporters that the listing conditions for Chinese companies are relatively harsh. If a mixed-reformed enterprise can be listed, it means that its operating capability meets the listing conditions, the company's operating conditions are good, and its profitability is strong, and its operating capability is recognized by the market.
The listing of mixed-reformed enterprises can increase the company’s reputation, obtain greater financing capabilities, increase social capital’s investment confidence in the enterprise, and enhance the company’s competitiveness.
On September 24, China National Gold Group Gold & Jewellery Co., Ltd. was first publicly issued and listed through the 142nd Issuance Review Committee meeting of the 18th China Securities Regulatory Commission’s Issuance Review Committee in 2020, becoming a mixed-ownership reform pilot of the National Development and Reform Commission and the SASAC. "Double Hundred Action" is the first company to pass a main board meeting.
Chen Xiongwei, chairman of CICC Jewellery, said in an interview with a reporter from China Business News that deepening reform is the only way for CICC Jewellery.
China Gold Jewellery has formulated a work policy that closely combines "mixing" and "reform", a trilogy of "attracting capital", "transfer mechanism" and "IPO".
Prior to this, CICC Jewelry introduced strategic investors such as CITIC Securities, JD.com, Industrial Bank, Zhongrong Trust, CCB Trust, Yuexiu Financial Holdings, and Junyuan Capital through capital increase and share expansion. It also introduced 30 downstream provincial-level high-quality franchisees as the industry. investor.
The state has issued a document to encourage the listing of mixed-reform enterprises, but it does not mean that all mixed-reform enterprises must pursue listing.
Li Hongjuan said that it is necessary to promote the listing of mixed-reformed enterprises in accordance with local conditions, implementing policies in accordance with enterprises, and by classification.
For the listed mixed reform enterprises, it is necessary to substantively promote the "secondary mixed reform" by introducing active shareholders.
For state-owned enterprises whose main business is in the field of competition, especially those below the central enterprise group level, comprehensively promote mixed ownership reform, encourage and support enterprises to list high-quality assets for in-depth mixed ownership reform, further liberalize the industries and fields into which capital enters, and increase state-owned assets Securitization rate and invigorate state-owned enterprises.
In fact, there are also some drawbacks in the listing of mixed-reform enterprises, which puts more tests and higher requirements on the production, operation and development of the enterprises.
Li Hongjuan analyzed that, for example, more attention is paid to the quality of information disclosure, and the concealment of enterprises and the freedom of enterprise development will be reduced, which is not conducive to the planning and consideration of long-term interests of enterprise managers.
In addition, as long as the capital enters the market-based financing platform, it means that it will face more investment risks and uncertain profit recovery expectations.
"Therefore, when a mixed-reformed enterprise goes public, it should not blindly pursue policy effects or short-term benefits. It should strengthen the comprehensive consideration of the actual situation of the enterprise, comprehensively enhance the core competitiveness of the enterprise, establish a modern governance system and operating mechanism, and have strong competitive advantages and risks. It is safer to choose an opportunity to go public after prevention and control capabilities." Li Hongjuan said.
Promote the reform of state-owned enterprises in depth
In addition to improving corporate governance and realizing the transition from managed enterprise to managed capital, there are other positive positive spillover effects in optimizing the equity structure and financing model of state-owned enterprises, and increasing the proportion of state-owned enterprise asset securitization.
In the context of the gradual formation of a new dual-cycle pattern in the Chinese economy, the capital market will play a significant role in the mixed reform of state-owned enterprises. Actively promoting the listing of state-owned enterprises and increasing the securitization rate of state-owned assets are expected to exert multiple positive effects.
Liu Xingguo said that relying on the capital market to implement mixed reforms can use the price discovery mechanism of the capital market to reasonably determine the transfer price of mixed shares to avoid the loss of state-owned assets; it can also give full play to the role of the capital market competition mechanism and introduce high-quality strategic investors.
The involvement of the capital market will help promote state-owned enterprises to accelerate the implementation of mixed reform.
In addition, promoting the listing of state-owned enterprises is of great significance to reducing the high leverage ratio of state-owned enterprises and helps prevent and resolve major risks.
Cheng Shi, chief economist of ICBC International, analyzed that asset securitization has positive significance for improving the efficiency of state-owned enterprises and optimizing their debt structure.
On the one hand, the proportion of total liabilities of listed state-owned enterprises and local state-owned enterprises is lower than the proportion of their total assets, which highlights the substitution effect of direct financing for indirect financing.
On the other hand, the proportion of total profits of listed state-owned enterprises and local state-owned enterprises has greatly exceeded the proportion of their assets and liabilities, reflecting that their operating efficiency is much higher than that of non-listed state-owned enterprises.
Cheng Shi also said that the listing of state-owned enterprises is expected to take into account both "capital management" and "stabilizing private enterprises", optimizing the equity structure and financing model of state-owned enterprises and alleviating the "difficulty" and "expensive" of private enterprises' financing. Not only is it conducive to deleveraging and preventing risks, it also reduces the crowding-out effect on private enterprises in indirect financing.
The research report issued by ICBC International shows that in China's financial system where loans account for more than 70% of social financing, private enterprises rely more on indirect financing, but their financing capacity does not match their role in the economic system.
For example, looking only at the balance of domestic RMB loans, for small and medium-sized enterprises and micro-enterprises, the average proportion of enterprises other than state-owned and collective enterprises is more than 50%.
It can be seen from this that if the financing model of state-owned enterprises can be optimized, it is also expected to reduce the crowding-out effect on indirect financing of private, small, medium and micro enterprises, and alleviate the "difficult" and "expensive" pressure of financing.