According to statistics, as of December 13, a total of 188 central enterprises and local state-owned enterprises had financed in A-Shares this year, with a total scale of about 581.434 billion yuan. The number and scale had increased for three consecutive years, and the securitization of state-owned assets had accelerated. Experts interviewed by the Securities Times said that there are multiple driving factors behind the further active listing and financing of state-owned enterprises this year, including the successful promotion of the registration system reform, the early reform has cultivated a number of excellent state-owned enterprises with good development quality, and provided sufficient alternative enterprises for state-owned enterprises to speed up listing and financing.
It is worth mentioning that half of the successful IPO companies come from strategic emerging industries. Experts believe that for some time to come, strategic emerging industry enterprises will still be the main force of IPO of state-owned enterprises. There are rules to follow for the implementation of equity incentive by listed companies of central enterprises, especially science and technology enterprises, to inject development power into listed companies and release new dividends for the capital market.
IPO initial fund raising
substantial increase in quantity and scale
The financing of RMB 581.434 billion includes the funds raised by the IPO and additional share allotment of relevant enterprises in the A-share market, an increase of 24.43% over 2020. Among them, 53 enterprises raised 146.719 billion yuan through IPO, an increase of 105.79% over the whole year of 2020.
Wang Jiyue, a senior investment banker, told the securities times that the growth in the number and scale of initial public offerings of central and local state-owned enterprises this year was mainly due to the successful promotion of the registration system reform.
Liu Xingguo, a researcher of the research department of China Enterprise Federation, told reporters that since 2018, the number of initial public offerings of state-owned enterprises has maintained an increasing trend, while the financing scale has been repeated. There are several reasons for this year’s further activity: first, the early reform has cultivated a number of excellent state-owned enterprises with good development quality, providing sufficient alternative enterprises for state-owned enterprises to speed up listing and financing; Second, the deepening of the reform of state-owned assets and state-owned enterprises has put forward specific requirements for accelerating the listing of high-quality state-owned enterprises and further improving the asset securitization ratio of state-owned enterprises. It is necessary to accelerate the listing of more high-quality state-owned enterprises; Third, with the adjustment of financing structure, there are clear requirements for increasing the proportion of direct financing. Both state-owned enterprises and private enterprises need to speed up and deepen the utilization of the capital market, and choose more capital markets to raise funds for development.
“However, it should also be noted that from 2018 to 2021, the number of IPOs of state-owned enterprises accounted for 19.0%, 13.4%, 7.6% and 11.9% respectively. This shows that non-public enterprises have always been the absolute main force of IPO Financing in the capital market.” Liu Xingguo said.
As of press time, there were two IPOs of more than 10 billion state-owned enterprises in Shanghai and Shenzhen in 2021. In August 2021, China Telecom Corporation Limited(601728) was listed on a shares. After deducting various issuance expenses, the net amount of funds actually raised was 47.515 billion yuan. China Three Gorges Renewables (Group) Co.Ltd(600905) raised 22.713 billion yuan, becoming the largest IPO in the history of China’s power industry. Other projects with more initial fund-raising include Everdisplay Optronics (Shanghai) Co.Ltd(688538) – u, Zhuzhou Crrc Times Electric Co.Ltd(688187) , Xinjiang Daqo New Energy Co.Ltd(688303) . After landing A-Shares and deducting various issuance expenses, these enterprises actually raised more than 5 billion yuan.
strategic emerging industry enterprises
actively embrace the A-share market
The “14th five year plan for green industrial development” recently issued by the Ministry of industry and information technology proposes to expand green and environmental protection strategic emerging industries. Hao Peng, director of the state owned assets supervision and Administration Commission of the State Council, once said that to implement the three-year action of state-owned enterprise reform, we must firmly grasp the strategic basis of expanding domestic demand, focus on the main responsibility and main industry, develop the real economy, continuously adjust and optimize the industrial layout and spatial layout of state-owned capital, and accelerate the development of strategic emerging industries such as digital economy, intelligent manufacturing, life and health and new materials, Improve the adaptability of the supply system to demand.
On September 17, the CSRC issued and implemented the announcement on expanding the pilot scope of domestic listing of red chip enterprises, which clearly included red chip enterprises in new generation information technology, new energy, new materials, new energy vehicles, green environmental protection, aerospace, marine equipment and other high-tech industries and strategic emerging industries into the pilot scope of domestic listing of red chip enterprises.
According to statistics, according to the classification of strategic emerging industries (2018), half of the 53 central and local state-owned enterprises that have successfully IPO since this year come from strategic emerging industries. Many of these enterprises are leaders in their respective industries. For example, Beijing Tongyizhong New Material Technology Corporation(688722) is the leading enterprise of UHMWPE fiber as a key strategic material, and Gripm Advanced Materials Co.Ltd(688456) is an advanced non-ferrous metal powder material manufacturer. In addition, China’s rail transit power supply equipment manufacturing leader China Railway High-Speed Electrification Equipment Corporation Limited(688285) and the global human rabies vaccine leader Liaoning Chengda Biotechnology Co.Ltd(688739) have also successfully landed on the science and innovation board through a demolition a.
Liu Xingguo said that the majority of state-owned enterprises listed on the stock market come from strategic emerging industries, which is inevitable. In addition to the SASAC attaches great importance to promoting the development of relevant enterprises and giving greater policy support, the quality of these enterprises is also relatively better. At the same time, new progress has been made in the construction of multi-level capital market system, which also provides a smooth channel for direct financing for more strategic emerging industry enterprises. In the future, strategic emerging industry enterprises will still be the main force of IPO of state-owned enterprises.
Zhou Lisa, research director of China Modern State-Owned Enterprise Research Institute of Tsinghua University, told reporters that the capital market shoulders a historical mission in promoting scientific and technological innovation, service transformation and upgrading, optimizing resource allocation and sharing development achievements. The unique mechanism of equity financing risk sharing and benefit sharing in the capital market has accelerated the formation of innovative capital market.
equity incentive is becoming more and more normal
The analysis shows that the active performance of central and local state-owned enterprises in the capital market this year is related to the continuous improvement of the equity incentive system. This year, the number of listed companies of state-owned enterprises publicly disclosed to carry out equity incentive plans has increased significantly. The number of central and local state-owned enterprises starting IPO is also not low. The reporter found that about 30% of central and local state-owned enterprises had carried out equity incentive plans before IPO.
Zhou Lisa believes that the main purpose of employee equity incentive is to attract high-end talents, retain core talents and stimulate the entrepreneurial enthusiasm of employees. SASAC of the State Council has strict requirements and regulations on equity incentive of state-owned enterprises. The equity incentive documents of listed companies controlled by central enterprises and the equity and dividend incentive documents of scientific and technological enterprises have been issued. There are rules to follow for the implementation of equity incentive by listed companies of central enterprises, especially the scientific and technological enterprises, which not only injects development power into listed companies, but also releases new dividends for the capital market.
“However, employee equity incentive should be particularly rigorous when demonstrating the scheme. From the perspective of practice, we should pay special attention to the accuracy and compliance of incentive.” Lisa Zhou thinks.
Wang Jiyue said that in addition to the responsibility of protecting the lifeline of the national economy, other work of central enterprises should be the same as that of normal market subjects. The incentive should be encouraged and the corresponding legal procedures can be performed. This is also an important transformation after the transformation from state-owned asset management to state-owned capital management, and the incentive measures are more and more market-oriented.
Liu Xingguo said that the implementation of equity incentive to closely link the interests of the company with the interests of employees will undoubtedly help to improve the enthusiasm of employees, stimulate the creativity of employees, so as to better promote the development of enterprises, create conditions and consolidate the foundation for the listing of state-owned enterprises, and make a positive contribution to improving the asset securitization ratio of state-owned enterprises through IPO. According to the materials released by SASAC, the enterprises implementing equity incentive have achieved good financial performance. From the actual investigation, the implementation of equity incentive does play a good role in stimulating employees’ vitality and improving enterprise performance.
(Securities Times)
