Home >

What Does It Mean For The Central Enterprises To Achieve Positive Growth Through The Epidemic Situation?

2021/1/20 12:10:00 0

Epidemic SituationCentral EnterprisesIncomeLeverage

On January 19, the first snow of 2021 fell in Beijing. It is said that auspicious snow is a good year. After a year of hard work, central enterprises have also ushered in the harvest.

Peng Huagang, Secretary General of the state owned assets supervision and Administration Commission of the State Council and spokesman of the State Council, revealed at the press conference on the economic operation of central enterprises in 2020 held by the State Council's new office, In 2020, the net profit of central enterprises will reach 1.4 trillion yuan, with a year-on-year growth of 2.1%; nearly 80% of the central enterprises' net profit will increase year-on-year; the profit margin of operating revenue will be 6.12%, with a year-on-year increase of 0.01%; the profit margin of cost and expense will be 6.5%, with a year-on-year increase of 0.2%; the total value of labor production per capita will be 594000 yuan, with a positive growth year-on-year; the per capita profit will be 148000 yuan, with a year-on-year increase of 0.5.

Peng Huagang lamented that in 2020, the economic operation of central enterprises has indeed experienced great ups and downs, but now the achievements are fair. Moreover, the stable development of the economic operation of the central enterprises has played an important role in driving the resumption of work and production, promoting the stability of the supply chain and industrial chain, further highlighting the responsibility of the "stabilizer" and "ballast stone" of the national economy.

From 510 million to 1.4 trillion

The report card handed over by central enterprises is not easy.

The sudden outbreak of new crown pneumonia has severely damaged most of the central enterprises, and then the international oil price plummeted and the policy interest concession and other reasons also brought great pressure to the operation and development of the central enterprises. Peng Huagang disclosed that in February 2020, the total net profit of central enterprises was only 510 million yuan, which should normally be about 100 billion yuan per month. "It's almost nothing. It's been the most difficult period."

Fortunately, since March last year, the central enterprises have coordinated the prevention and control of epidemic situation and economic and social development, and the efficiency has improved month by month. In June, it has achieved positive growth and reached a record high. Since then, it has maintained double-digit net profit growth every month. In the whole year, the accumulated net profit of central enterprises reached 1.4 trillion yuan, up 2.1% year on year. "This is a step-by-step increase in net profit from the lowest valley of 61.2% decline in January April, which is very difficult." Peng Huagang said with emotion.

It is reported that nearly 80% of the net profits of central enterprises are increasing year on year. Among them, the net profit of 2 enterprises exceeded 100 billion yuan, that of 4 enterprises exceeded 50 billion yuan, that of 39 enterprises exceeded 10 billion yuan, and that of 24 enterprises increased by more than 25%. The net profit of 43 enterprises increased by more than 10%.

Li Jin, chief researcher of China Enterprise Research Institute, pointed out that from the experience of stabilizing the economy in this epidemic situation, oil, gas, electricity, coal, steel and other upstream energy resources are in the hands of state-owned enterprises, which is helpful to stabilize the economy. According to Peng Huagang, central enterprises adhere to the principle of calculating large accounts, long-term accounts and political accounts, resolutely implement national policies, help enterprises to relieve their financial difficulties, and reduce electricity prices, gas prices, tariff, road charges and rent. By 2020, the operating costs of the whole society will be reduced by 19.65 billion yuan, of which the power grid enterprises will reduce the electricity consumption cost of users by about 108 billion yuan, and the communication enterprises will implement the requirements of increasing the speed and reducing the charges, so as to make profits About 46 billion yuan. Petroleum and petrochemical enterprises have lowered the price of non resident gas in an all-round way, reduced the energy consumption cost of downstream enterprises by more than 30 billion yuan, reduced the cost and burden of small and medium-sized enterprises, and reduced rent by more than 7.5 billion yuan and road toll by more than 5 billion yuan.

A state-owned asset expert, who did not want to be named, noticed the innovation data. Even in the difficult operation period of central enterprises in 2020, the R & D investment of central enterprises increased by 11.3% year-on-year, and the intensity of R & D investment was 2.55%, an increase of 0.3% year-on-year. Among them, the R & D investment intensity of central industrial enterprises reached 3%.

Li Jin believes that in the difficult economic period, the state still increases investment in science and technology, and the growth of R & D funds is much higher than that of GDP, which is exciting and has laid a solid foundation for economic development in the next few years.

The above-mentioned state-owned assets experts, who do not want to be named, believe that it is necessary to guide central enterprises to increase R & D investment, on the one hand, further implement the pre Tax Deduction Policy for R & D expenses of central enterprises. In addition, we should improve the evaluation mechanism of state-owned enterprises, incorporate the proportion of R & D investment into the performance appraisal system, strengthen the R & D investment intensity and key core technology tackling assessment, and increase the science and technology assessment and reward. The expert also specially pointed out to fully mobilize the enthusiasm of scientific research personnel. The annual salary system is implemented for the leading talents who undertake key special tasks. Enterprises can draw special incentive funds and determine market-oriented incentive measures for leading talents. We should take medium and long-term incentive measures, such as post dividend, project income dividend, equity incentive, equity subscription and equity option.

What kind of signal is transmitted from descending to stable?

In recent years, the state-owned central enterprises continue to promote the work of reducing leverage and effectively prevent financial risks. Peng Huagang disclosed that by the end of 2020, the average asset liability ratio of central enterprises was 64.5%, down 0.5% year on year, and the target of reducing 2% in three years was successfully achieved. Among them, the interest bearing debt ratio was 37.7%, a year-on-year decrease of 0.6 percentage points. The debt structure was significantly improved, and the solvency was enhanced, which kept the bottom line of no bond default risk.

The above-mentioned state-owned assets experts who did not want to be named explained that the reason why the debt ratio of central enterprises could drop to 64.5% was that the state owned assets supervision and Administration Commission organized China Guoxin to take the lead in setting up a 100 billion level credit guarantee fund for central enterprises, so as to resolve the bond payment risk in a market-oriented way. Secondly, the financing scale and issuing interest rate of central enterprises' bonds are basically stable. The stock bonds are mainly medium and long-term bonds. At the same time, the production and operation are getting better month by month, and the enterprise benefits are stable and rising. The bond cashing risk is controllable as a whole. The expert revealed that SASAC has also focused on the possible default risks of medium and high debt enterprises and overcapacity industries of central enterprises, and strengthened the bond market monitoring.

Peng Huagang also disclosed that recently, SASAC specially organized a comprehensive investigation on the debt risk and bond risk of central enterprises. Judging from the current investigation, the credit rating of central enterprises is still good, the capital market recognition is relatively high, the bond scale is generally reasonable, the fund continuity is safe and reliable, and the risk is basically controllable. He revealed that SASAC will shift from reducing leverage to stabilizing leverage to ensure that the debt ratio of most enterprises remains stable, and that the debt ratio of high debt subsidiaries will return to a reasonable level as soon as possible.

Liu Jipeng, President of the capital and Finance Research Institute of China University of political science and law, believes that on the basis of consolidating the achievements of the three-year work of reducing leverage, the central government proposes to shift from reducing leverage to stabilizing leverage, with two main grounds. First, in reality, the current debt ratio of central enterprises is 64.5%, which is within a safe range. Secondly, after the epidemic, the first task is to withstand the downward pressure of the economy, especially to play the role of central enterprises in the dual circulation. Therefore, leverage is capital, and capital is the blood of enterprise development, especially for the future development of enterprises. Without blood, how can we talk about development?

Liu Jipeng pointed out that although high leverage indicates risks, low leverage, especially in the period of rapid economic development, is itself a kind of risk, that is, the risk of failure to develop. Therefore, enterprise leverage should find a degree to adapt to economic development.

Liu Jipeng thinks that the change from reducing leverage to stabilizing leverage shows that the current leverage ratio of central enterprises is moderate, which is essentially different from that of a year or two ago. However, central enterprises still have an important mission to shoulder in the future and need appropriate capital leverage. Because the epidemic situation is still uncertain in the international scope, the theme of this year is likely to be to overcome the epidemic situation. In the double cycle, the problems of foreign trade, export and international market are the focus of this year's work.

Therefore, Liu Jipeng thinks that it is not appropriate for the central enterprises to reduce the leverage. They need to stabilize the leverage, adapt to the different development laws of each enterprise, and adapt to the heavy responsibilities given by the state to the central enterprises and the requirements of future development. This indicates that in 2021, China's macro environment, especially the trend of financial policies serving the real economy, will be adjusted.

Finally, Liu Jipeng reminded that each enterprise has its own rules on how to grasp leverage. It should not be one size fits all, but should be flexibly handled between different enterprises in different industries. As to whether the stability of leverage means the relative abundance of central enterprises' capital and gold, thus bringing about the activity of the capital market, Liu Jipeng reminded that the stability of leverage ratio means the relatively loose liquidity of central enterprises, indicating the loose and active operation and investment of central enterprises, and the loose policy will also make the capital market more optimistic about the development and performance of central enterprises in 2021.

Strive to complete 70% of the tasks in the year of reform of state-owned enterprises

Peng Huagang said that in 2020, the three-year reform of state-owned enterprises was officially launched, and a series of significant progress was made in many important areas and key links.

The reform of the company system has been basically completed, and new steps have been taken in the construction of market-oriented operation mechanism. Last year, 22 new listed companies controlled by central enterprises implemented equity incentive, covering nearly 18000 key core talents. The number of headquarters departments of central enterprise groups has been compressed by more than 17% on average, and the staffing has been reduced by 20% on average. The vitality and efficiency of enterprises have been significantly enhanced.

In fully competitive industries and fields, the mixed reform has been actively and steadily promoted. Since 2013, more than 4000 mixed reforms have been implemented by central enterprises, bringing in more than 1.5 trillion yuan of social capital. In 2020, SASAC has set up a special mixed ownership reform fund for China's state-owned enterprises, which will play a better role in promoting the mixed ownership reform.

In addition, in 2020, more than 900 items of mixed reform will be implemented in central enterprises in a year, and more than 200 billion yuan of social capital will be introduced. There are more than 6000 enterprises in which central enterprises participate in foreign equity investment, and the amount of state-owned capital investment exceeds 400 billion yuan.

"The reform of mixed ownership is an important task in the reform of state-owned enterprises, but it is not the whole of the reform of state-owned enterprises. The number, proportion, progress and scope of mixed ownership reform should not be taken as the marks of state-owned enterprise reform unilaterally." Peng Huagang stressed that we should firmly grasp the correct direction and adhere to the principle of "three reasons, three suitability and three no". We should not adopt the "moving" and "one size fits all" approach to promote the mixed reform. Instead, we should change according to the actual situation of the enterprise and the maturity of the work. We should not change it or not, and avoid blindness. We should promote it one by one. We should deepen the reform of mixed ownership in different levels and categories in accordance with the requirements of improving governance, strengthening incentives, highlighting the main business and improving efficiency.

Peng Huagang pointed out that at present, the central enterprise group level is mainly to maintain state-owned wholly-owned or wholly-owned state-owned enterprises, and enterprises with conditions can carry out equity diversification reform. At present, the central enterprise group level has no plan to introduce other capital mixed ownership reform. Peng Huagang said that restructuring should be the focus of deepening the reform of mixed ownership, so as to ensure the effectiveness of the reform and avoid confusion.

Li Jin believes that the reform here does not refer to ownership, but to the operation mechanism. We should deepen the reform of mixed ownership, promote the deep transformation of operation mechanism of mixed ownership enterprises, optimize the equity structure, and explore the implementation of differentiated management and control.

"We all hope that in 2021, we can build a new operation mechanism and supervision mechanism that is different from those of wholly state-owned enterprises and state-owned absolutely holding enterprises," Li Jin pointed out. Mixed ownership enterprises can't operate and supervise with the same mechanism that used to manage wholly state-owned and state-owned absolute holding companies, and the effect will be greatly reduced.

Peng Huagang also revealed that 2021 is the year of three-year action for the reform of state-owned enterprises and a key year for connecting the preceding and the following. "We will strive to complete more than 70% of the overall reform tasks in the three years by the end of 2021, make substantive breakthroughs in important fields and key links, and lay a solid foundation for the comprehensive completion of the three-year action tasks in 2022."

In Li Jin's view, this year's difficulty lies in the reform of investment and operation companies and authorized operation system, as well as the reform of mixed ownership. He believes that in the central enterprises, this year's mixed reform should not be a new year, but just a small year.

 

  • Related reading

Industrial Cluster: Evolution Of Textile Industry Cooperation Mode Between Yangtze River Delta And Dawan District

regional economies
|
2021/1/19 18:12:00
0

Forge Ahead In The "14Th Five Year Plan" And Set Sail Again

regional economies
|
2021/1/6 11:20:00
3

Profit Of Textile Industry Above Designated Size Will Increase By 7.5% In The First November Of 2020

regional economies
|
2021/1/4 16:33:00
2

Hebei, Shandong And Henan: Market Improvement At The End Of The Year

regional economies
|
2020/12/31 9:33:00
2

Hebei, Shandong And Henan: Ups And Downs Of Cotton Market

regional economies
|
2020/12/24 11:18:00
3
Read the next article

Create 2021 Together, Enjoy Running, And Then Have A Bright Future

In the era of digital economy, intelligence is the general trend. In particular, with the national "14th five year plan" clearly put forward "accelerate digital development", promote