The three-year action of state-owned enterprise reform welcomes the end, and the military state-owned enterprises seize the opportunity: the three-year action of state-owned enterprise reform is the specific construction drawing for implementing the “1 + n” policy system and top-level design of state-owned enterprise reform, and is “measurable, assessable, verifiable and important”. The reform of state-owned enterprises has formed a “1 + n” policy system led by the guiding opinions on deepening the reform of state-owned enterprises and supported by 35 supporting documents. 2022 is the closing year of the three-year action of state-owned enterprise reform. Superimposing the favorable factors of national defense modernization, the reform of military state-owned enterprises will usher in a climax of development.
CETC defined the “one three four six” development strategy and formulated a three-year action implementation plan for reform: CETC is the main force of China’s military electronics industry, the national team of network information industry and the national strategic scientific and technological force. In terms of development strategy, CETC’s 14th five year plan is based on the new development stage, implements the new development concept, serves to build a new development pattern, and defines the “one three four six” development strategy. In terms of state-owned enterprise reform, in order to fully implement the three-year action decision-making and deployment of state-owned enterprise reform, CETC has formulated the three-year action implementation plan for reform (2020-2022), which clearly puts forward 56 reform measures in 10 aspects and 129 reform measures. Benchmarking the “three positioning” of the group, comprehensively promote the adjustment of the strategic layout of the “four sectors”, and form a “four sectors” business layout with electronic equipment as the foundation, network information system as the core, industrial foundation as the key and network security as the guarantee.
Equity incentive stimulates vitality and pays attention to marketization and long-term: on May 30, 2020, SASAC issued the guidelines for the implementation of equity incentive by listed companies controlled by central enterprises, which provides systematic and comprehensive policy guidance and practical guidance for the implementation of equity incentive by listed companies of central enterprises. Several listed companies under CETC issued equity incentive plans, Equity incentive can effectively combine the interests of shareholders, the company and the core team, make all parties pay common attention to the long-term development of the company, and ensure the realization of the company’s development strategy and business objectives. In addition, medium and long-term incentive management and market-oriented operation mechanism also play an incentive role.
Deepen the reform of scientific research institutes, increase capital operation and improve asset securitization rate: CETC’s high-quality institutes are rich in assets, and 47 national research institutes are the foundation and main body of CETC’s reform, development and scientific and technological innovation. CETC has adopted the system of “three-tier structure and two-level operation”, with the modern state-owned enterprise system as the basic model and the parent subsidiary company as the basic organizational form, and realized the flat management of the group company. CETC has integrated and formed more than 10 sub groups and more than 10 listed companies. In June 2021, China Putian was incorporated into CETC, further enriching the resources of listed companies of CETC. On the basis of the formation of the sub group, CETC advanced the special reform in depth, straightened out the relationship between the Research Institute and the sub group, established the network communication research institute in April 2021, defined the main body of military industry and scientific and technological innovation of the Research Institute, the positioning of the main body of sub group achievement transformation and industrial development, and created a model of “Institute Reform Institute”. In addition, recently, several listed companies of CETC announced the free transfer of state-owned shares, which may improve management efficiency and accelerate the reform of state-owned enterprises. We expect that in 2022, CETC will continue to deepen the reform of scientific research institutes and improve the asset securitization rate.
Investment suggestion: it is suggested to pay attention to Sun Create Electronics Co.Ltd(600990) , Chengdu Spaceon Electronics Co.Ltd(002935) under China Electronics Technology Group for equity incentive, Phenix Optical Company Limited(600071) for asset restructuring, and Glarun Technology Co.Ltd(600562) as the leading target of defense radar.
Risk analysis: the risk of asset restructuring with uncertainty; The risk that the operation effect after reorganization is not as good as expected; The risk that the reform of state-owned enterprises is not advancing as expected.
