Government subsidies in non recurring profits and losses have always been the focus of investors on the financial statements of listed companies. According to the data, as of April 19, 2088 A-share listed companies had released the annual report of 2021, of which 2060 companies disclosed the amount of government subsidies included in last year’s profits and losses, with a cumulative amount of about 125.5 billion yuan.
Guo Yiming, director of Jufeng investment consulting and investment consulting, said in an interview with the reporter of Securities Daily that the issuance of government subsidies is generally the help of local governments to enterprises, mainly to reduce the burden of enterprises and help their development; In addition, most of the enterprises assisted by the government belong to strategic emerging industries supported by the state and local governments; Of course, some listed companies with poor performance will turn losses into profits through government subsidies, and investors are often very sensitive to this.
227 listed companies
received government subsidies exceeding 100 million yuan
Data show that as of April 18, 227 A-share listed companies received government subsidies of more than 100 million yuan last year; 15 listed companies received more than 1 billion yuan in government subsidies.
According to the reporter, the listed companies that received government subsidies of more than 100 million yuan last year mainly came from power equipment, electronics, automobile, petroleum and petrochemical, building decoration, building materials, food and beverage, medicine and biology and other industries. According to the annual report, of the 227 listed companies, 215 made profits last year and 12 suffered losses.
You Xiaogang, senior investment adviser of Jufeng investment consulting, told the Securities Daily that there are many reasons for the government to grant subsidies to enterprises, such as some enterprises having difficulties in operation affected by the epidemic; Or some businesses are involved in key livelihood areas and need to be encouraged and compensated in operation; Maybe some enterprises have key scientific and technological achievements, but they have not yet been industrialized, and they also need the support of scientific and technological finance.
“In addition, government subsidies actually help to optimize China’s industrial structure and guide more social capital into more important strategic areas such as people’s livelihood, science and technology.” You Xiaogang said.
40 listed companies
super net profit from government subsidies
But it has to be said that government subsidies also “dress up” the performance of listed companies to a certain extent, and even play a key role in turning losses into profits for some companies. According to the data, as of April 18, China Cyts Tours Holding Co.Ltd(600138) , Jinyuan Ep Co.Ltd(000546) , Xuancheng Valin Precision Technology Co.Ltd(603356) , Gohigh Data Networks Technology Co.Ltd(000851) and other 40 listed companies received more government subsidies last year than their net profits in the same period.
Jinyuan Ep Co.Ltd(000546) 2021 annual report shows that the company achieved an operating revenue of 8.739 billion yuan last year, a slight increase of 0.78% year-on-year; The net profit attributable to the shareholders of the listed company was 86.3 million yuan, a year-on-year decrease of 81.81%. At the same time, the government subsidy obtained by the company last year reached 189 million yuan, far exceeding the net profit. Before that, Jinyuan Ep Co.Ltd(000546) 2019 and 2020 received government subsidies of 122 million yuan and 197 million yuan respectively.
For government subsidies, Jinyuan Ep Co.Ltd(000546) company officials told reporters, “government subsidies are included in the net profit of the year. The company received government subsidies because it carried out the business of recycling renewable metal resources from solid waste, which is the development direction encouraged by the state.”
China Cyts Tours Holding Co.Ltd(600138) 2021 annual report shows that the company achieved an operating revenue of 8.635 billion yuan last year, with a year-on-year increase of 20.76%; The net profit attributable to the shareholders of the listed company was 21.233 million yuan. However, if non recurring gains and losses are deducted, the company will lose 110 million yuan. According to the data, the government subsidy included in the current profit and loss of the company last year was 170 million yuan.
In addition, Xuancheng Valin Precision Technology Co.Ltd(603356) last year achieved an operating revenue of 2.23 billion yuan and a net profit of 2.0287 million yuan attributable to shareholders of listed companies. But in fact, this also benefited from the government subsidy of 7.487 million yuan included in the current profit and loss of the company last year. If non recurring gains and losses are deducted, the company will lose about 3.988 million yuan in 2021.
“Excluding the industries of individual enterprises that are greatly affected by the epidemic, the market is very sensitive to whether the performance of listed companies is excessively dependent on government subsidies, which is likely to be voted by investors with their feet.” Guo Yiming told reporters.
