Recently, companies in the petroleum, telecommunications, shipping and other industries have taken out real gold to set off a boom in buybacks, dividends and holdings. At the critical moment, the listed companies controlled by central enterprises are setting an example for stabilizing the capital market. Obviously, improving the market recognition and value realization of listed companies will be an important task of state-owned enterprise reform, and a new round of state-owned enterprise reform will promote the capital market to be active.
From a macro point of view
At a time when the troika of investment, imports and exports, and consumption is weak, it is expected to rise. Private investment is slightly under-invested, and it will take some time to restore confidence, and the reform of state-owned enterprises has come at an opportune time. If the current macroeconomic environment remains largely unchanged, SOEs are likely to outperform for some time under the new valuation system**. The author agrees with this statement that there will be two "battlefields" for the new round of deepening and upgrading of state-owned enterprise reform: one is the "battlefield" of strategic emerging industries, and the other is the "battlefield" of capital operation, the former is the main battlefield for the development of state-owned enterprise industries, and the latter is the capital market for the development of the real economy. Speeding up the restructuring of the distribution of state-owned capital and promoting the construction of a modern industrial system are the primary tasks of the new round of state-owned enterprise reform. This priority can be understood in two ways.
Judging by the content
In the face of great changes unseen in a century, a new round of scientific and technological revolution and industrial transformation is continuing. In the context of the intensification of the Sino-US game, the suppression of the development of China's high-tech field, and the urgency of breaking through the "bottleneck", while the domestic economic growth rate has declined, and the future needs of high-end manufacturing and strategic emerging industries have become new driving forces, the State-owned Assets Supervision and Administration Commission (SASAC) has clearly required central enterprises to strive to make breakthroughs in key core technologies and "bottlenecks", accelerate the creation of "original technology source" and "modern industrial chain length", and shoulder the national responsibility of scientific and technological innovation. In recent years, the United States has relied on its advantages in semiconductors and other fields to continuously suppress and blockade China's science and technology enterprises, trying to curb China's scientific and technological development. The importance of scientific and technological innovation is self-evident at present, and it is the biggest consensus to promote scientific and technological innovation in the first system. Go all out is the slogan shouted by the State-owned Assets Supervision and Administration Commission, and there must be big action.
From a methodological point of view
To promote specialization, industrialization integration, and the capital market can play an active role in helping state-owned enterprises to integrate professionally, including mergers and acquisitions of high-quality resources, the introduction of strategic investors, improve the efficiency of state-owned capital operations, etc., the main logic is to further achieve the goal of stronger, better and larger state-owned capital and state-owned enterprises through the capital market platform.
From the perspective of the capital market
At the same time as the new round of deepening and upgrading of state-owned enterprise reform, the State-owned Assets Supervision and Administration Commission (SASAC) emphasized at the "Special Meeting on Improving the Quality of Listed Companies and M&A and Reorganization" held on June 14 that "it is necessary to give full play to the decisive role of the market in resource allocation, and carry out M&A and restructuring with listed companies as a platform to help improve core competitiveness and enhance core functions". The signal is clear. With the capitalization of various factors of production, the capital market will give full play to the role of optimal allocation of resources and factors, such as promoting state-owned enterprises to raise funds at reasonable costs, realizing the efficient integration of state-owned capital in the industrial chain, innovation chain, capital chain, etc., and selecting appropriate investment and financing methods to improve the capital structure. Recently, the SASAC in many places has promoted the listing of provincial state-owned enterprises, in order to make full use of the listing platform, strengthen capital operation, adopt various forms and means, cooperate with financial and investment institutions, realize the deep integration of industry and capital, and improve the operating quality and intrinsic value of state-owned enterprises.
We can focus on the investment logic of state-owned enterprises themselves. A new round of reforms has begun, and the purpose of the latest round of policy reforms is to improve the competitiveness of state-owned enterprises and strengthen their profitability. The State-owned Assets Supervision and Administration Commission (SASAC) put forward the assessment index of "one profit and five rates", and launched the value creation action of state-owned enterprises benchmarking against world-class enterprises. Among them, the six assessment indicators of "one interest and five rates", compared with the previous "two profits and four rates", have increased the return on net assets and operating cash ratio, and placed more emphasis on profitability and cash flow security.
The injection of high-quality state-owned assets into listed companies will be further increased. Actively promoting the listing of state-owned enterprises is a two-wheel drive to further promote the optimization of the equity structure of state-owned listed companies, realize industrial operation and capital operation, and promote the high-quality development of state-owned enterprises. At present, the valuation of the index is at a historically low position, and the investment value is highlighted. The constituent stocks of the Central Enterprise Innovation Driven Index are all large state-owned enterprises, which actively fulfill the social responsibility of share repurchase and cash dividends, so the overall dividend yield is also high. Considering that the SASAC is currently giving active guidance and support to share buybacks and cash dividends of state-controlled listed companies, the characteristics of high dividends will continue in the future, and it is expected to be sought after by the capital market.
For example, from the perspective of investors, in the eyes of most investors, the characteristics of central enterprises are often manifested as weak profitability and insufficient growth, while from the perspective of the targets selected by the central enterprise innovation index, they are more focused on selecting central enterprises that have both stable fundamentals and growth advantages. The core targets of the high-quality scientific and technological innovation companies of central enterprises have the offensive attribute of "scientific and technological innovation", and when the market as a whole recovers, the index may obtain higher excess returns.
Change is taking place, and large state-owned enterprises are making plans to improve their return on capital. These plans may include increasing dividend payout ratios and implementing a buyback program. The ultimate goal of the reform plan is to be profit-driven rather than scale-driven, but more active communication with stakeholders and investors would be a welcome and encouraging start.
textLi Jin
Edited by Xin Ran
This article was published in the first issue of Chinese and Foreign Corporate Culture, 2024