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the economic observer has learned exclusively that after the "financial restriction order", regulators will gradually introduce new policies related to the capital market and listed companies. specifically, they include follow-up measures for central enterprises to sell financial assets. for example, if there is a loss after the sale of assets, they may be subject to corresponding restrictions. at the same time, the state-owned assets supervision and administration commission plans to issue new policies internally for central enterprises, listed companies and the capital market, encourage listed companies to merge, and put forward new requirements specifically for the market value management of central enterprises.

introduction

one|| the original intention of the sasac is not only to let central enterprises divest financial assets, but also to turn over profits to the treasury. while ensuring the preservation and appreciation of assets, central enterprises also have to face the challenge of local government fiscal revenue and find new growth points from equity finance.

2|| at present, there are still many financial shares to be sold in the market, and they can still be sold at a good price. with the "financial limit order" and "platform", there are fewer concerns about the loss of state-owned assets. if we do not seize this opportunity, these non-core financial shares may not be sold in the future.

three|| when some central enterprises are preparing to sell their shares in financial institutions, they still have difficulty sorting out the boundaries of high risk. what makes state-owned assets people headache is that which high-risk financial assets need to be sold is sometimes difficult for people from the state-owned assets supervision and administration commission to distinguish.

iv|| the release of the "financial restriction order" will prompt major central enterprises to make appropriate changes in their next step of industrial and financial integration, and to integrate industry and finance in a more stable manner in accordance with the new assessment requirements of "one profit and five rates", with more support for the main business of enterprises rather than making quick money.

this time, the state-owned assets supervision and administration commission of the state council (hereinafter referred to as “sasac”) took action against the financial assets that account for more than half of the central enterprises.

on june 3, 2024, the sasac party committee’s expanded meeting made it clear that all central enterprises are not allowed to establish, acquire, or invest in any financial institutions in principle, and are not allowed to invest in or increase their holdings in financial institutions that have little effect in serving their main industries and have greater risk spillovers. the industry calls this the “financial restriction order.”

the economic observer found that after the "financial restriction order" was issued, several central enterprises, including sinochem capital and china poly, began to sell their equity in financial institutions.

this move by central enterprises is not only a response to the "financial limit order", but also an attempt to seize an opportunity.

the economic observer has learned exclusively that after the "financial restriction order", regulators will gradually introduce new policies related to the capital market and listed companies. specifically, they include follow-up measures for central enterprises to sell financial assets. for example, if there is a loss after the sale of assets, they may be subject to corresponding restrictions. at the same time, the state-owned assets supervision and administration commission plans to issue new policies internally for central enterprises, listed companies and the capital market, encourage listed companies to merge, and put forward new requirements specifically for the market value management of central enterprises.

"the operation of the capital market requires consistency and stability," said a state-owned enterprise official.

the regulatory authorities have a clear attitude, which aims to strengthen supervision and risk prevention of central enterprises' financial business, and to control and curb the phenomenon of excessive financial expansion of enterprises.

a person from a central enterprise believes that this also means that the era in which central enterprises made quick money through financial business is coming to an end.

this is not an easy task.

a chief accountant of a central enterprise is facing a "painful choice": if he sells the equity of a financial institution now, he may get a good price; if he misses the opportunity, he may not be able to sell it in the future. however, if he really sells this main force of profit contribution, it will inevitably affect the central enterprise's assessment at the end of the year.

although the problem is difficult, state-owned enterprises must make decisions as soon as possible under the current factors.

wang jiang, a scholar of state-owned assets research, suggested thatin the next step, major central enterprises need to start with preventing operational risks, especially financial risks, focus on value-added management, enhance value creation functions, and play a key role in providing patient capital in promoting my country's industrial transformation and upgrading.

wind direction

the regulators' eyes are focused on "finance", "high risks" and "non-core businesses".

before issuing the "financial restriction order", relevant departments conducted an overall assessment of the financial assets of central enterprises.

the economic observer learned that currently, financial assets account for a considerable proportion of central enterprises; especially listed central enterprises, more than 80% of their assets involve the financial field.

the above-mentioned state-owned enterprise personnel believe that the focus on the supervision of central enterprises' equity participation and controlling financial institutions is due to the increasingly apparent financial risks. the development of the financial industry is also related to the stability of china's economy.

the person said that most of china's high-quality enterprises are listed companies or central enterprises managed by the state-owned assets supervision and administration commission, but the revenue and profits of these enterprises are declining, which shows that the economy is under pressure.

if we want to deal with risks, we must start with finance, with state-owned enterprises, and let state-owned enterprises return to their core businesses.

central enterprises responded quickly. after the "financial limit order" was issued, the economic observer found through statistics on property rights trading platforms that china poly group, anshan iron and steel group, sinochem capital and others had taken action.

on june 17, 2024, panzhihua iron and steel group xichang new steel co., ltd. listed the transfer of 3% equity of liangshan small and medium enterprises credit financing guarantee co., ltd. the former is a holding subsidiary of panzhihua iron and steel group under anshan iron and steel group.

in july 2024, sinochem capital listed its 12.384 million shares in jiangtai insurance brokerage for transfer. this is the third time it has transferred this part of the equity. the transfer base price of the equity has dropped from the initial 55.8333 million yuan to the second 51.5174 million yuan, and now it has dropped to 50.4030 million yuan.

on august 7, 2024, 200 million shares of guangzhou poly microfinance co., ltd., a subsidiary of china poly group, were listed on the guangzhou property exchange, accounting for 100% of the total share capital, and the transfer floor price was approximately 281 million yuan.

so far, all the financial shares listed for sale by relevant central enterprises are “non-core businesses”, which is consistent with the policy thinking of the state-owned assets supervision and administration commission.

the above-mentioned state-owned asset person said that the core financial assets of central enterprises must be retained for a simple reason: "if i am a merchant selling tea cups, i cannot just focus on selling tea cups and ignore deposits. deposits are important working capital and safety cushions for any enterprise."

the above-mentioned state-owned enterprise personnel suggested that relevant central enterprises should comprehensively consider the company's long-term strategy and market environment when dealing with financial assets, and ensure that the management and use of financial assets can bring the greatest value to the company, rather than simply treating them as assets that can be sold at will.

and,the original intention of the sasac is not only to let central enterprises divest financial assets, but also to turn over profits to the treasury. while ensuring the preservation and appreciation of assets, central enterprises also have to face the challenge of local government fiscal revenue and find new growth points from equity finance.

based on this, focusing on the main business, preventing risks, alleviating fiscal pressure, and promoting economic development are the "killing two birds with one stone" strategies behind the "finance limit order" proposed by the regulatory authorities.

the most difficult decision

under the policy trend, relevant central enterprises have more realistic considerations.

if it were not for the "financial restriction order", many central enterprises would not force themselves to sell their shares in financial institutions.

the chief accountant of the above-mentioned central enterprise said that for a long time, when faced with the release of risks of financial assets, there have been disagreements between the financial personnel and board members within the central enterprise group.

for example, the financial staff within the group may issue warnings and suggest actions, but the board of directors or other management will consider multiple aspects such as industrial development, strategic investment layout, market position and expansion direction, and will not rely on pure financial or financial standards to make decisions. when the board of directors makes a decision, the opinions of the financial staff are only one aspect.

the chief accountant said that it is difficult to convince them that risks exist before they actually occur. in this case, it is indeed difficult to avoid financial risks. if the risks eventually break out and the financial institutions under the central enterprises encounter serious financial problems, the board members of the central enterprises will also need to share the responsibility.

a member of the board of directors of a central enterprise believes that the problem is that when a financial institution is part of a group, it is beneficial to the group; but if it is viewed in the context of the entire financial system, it is not so optimistic. in other words, if it is purely from the perspective of a financial institution, the decision will be easier; but if it is considered from the overall layout and development logic of the industrial group, the situation will become complicated. moreover, in the face of financial assets that are already at risk, central enterprises cannot sell them immediately because this involves the responsibility of maintaining and increasing the value of state-owned assets.

the above-mentioned soe board member said that compared with other corporate boards, there will be a strict accountability mechanism once there is a problem of loss of state-owned assets. he said: "in soes, if there is no risk, it is not considered to be risky, which is different from other companies. making decisions under such circumstances will make everyone feel very painful."

in the opinion of the chief accountant of the above-mentioned central enterprise,at present, there are still many financial shares to be sold in the market, and they can still be sold at a good price. with the "financial limit order" and "platform", there are fewer concerns about the loss of state-owned assets. if we do not seize this opportunity, these non-core financial shares may not be sold in the future.

the economic observer learned that if the relevant central enterprises do not dispose of some non-core financial equity at this time, the state-owned assets supervision and administration commission is likely to take further measures in the next step. for example, in terms of equity sales, the regulator may introduce follow-up measures to match asset sales; if the central enterprises suffer losses from the sale of equity, they may be subject to corresponding restrictions.

however, selling some non-core financial shares now will have an impact on the year-end assessment of some central enterprises, because the financial sectors of many central enterprises are the main contributors to profits.

with the change of top-level assessment orientation, the above problems are expected to be gradually resolved.

the chief accountant of the central enterprise mentioned above believes that the previous regulatory assessment of central enterprises required enterprises to make profits or cooperate with government actions. without these guidelines, central enterprises would not have had such a strong impulse to frequently buy and sell financial equity.

the sasac’s latest “one profit and five rates” assessment refers to six operating indicators: total profit, asset-liability ratio, operating cash ratio, return on net assets, r&d funding intensity, and total employee labor productivity. it aims to guide central enterprises to pay more attention to operating efficiency and quality, strengthen risk management, and optimize resource allocation.

under such circumstances, central enterprises divesting non-core financial assets and concentrating resources and energy on developing their core businesses are also in line with the goals emphasized in the "one profit and five rates".

with the superposition of various factors, the endorsement of the "financial restriction order" has given the above-mentioned central enterprises the courage to take a step forward. perhaps this is an opportunity to sell high-risk financial assets. however, it will also be a difficult decision.

the border of selling

according to the guidance of the state-owned assets supervision and administration commission, enterprises should abandon equity in financial institutions that are not related to their core businesses and divest related assets as much as possible.

in actual operation, the considerations of central enterprises vary greatly, and some enterprises cannot withdraw completely now because their equity includes many investment projects. if these investment projects perform well, many people will be willing to take over.

the above-mentioned state-owned asset person said that to some extent, at this stage, the sasac does encourage central enterprises to sell high-risk non-core financial assets. when central enterprises have the motivation to sell them as soon as possible, it also means that they may sell these assets at a lower price.

regardless of the asset price, the focus now is to transfer the risk first. this is the top priority for central enterprises.

the above-mentioned state-owned asset person is worried, which raises another question: who will take over these assets that may be at risk? especially if these assets are about to have problems, who will be willing to buy them?

this is just like buying a house. if the down payment has been paid but the subsequent loan cannot be repaid, the buyer will face risks. if there are potential problems with the financial assets sold by central enterprises, buyers also need to consider carefully.

the person believes that now, financial institutions and banks are buying government bonds, which shows that in the current market environment, financial institutions are looking for safer investment channels. therefore, for high-risk financial assets sold by central enterprises, potential buyers may be very cautious and may even need the intervention of the government or other institutions to ensure the smooth progress of the transaction.

the economic observer contacted several central enterprises and found that:when some central enterprises were preparing to sell their equity in financial institutions, they themselves still found it difficult to sort out the boundaries of high risk.

what makes the above-mentioned state-owned assets personnel headache is that it is sometimes difficult for the sasac personnel to identify which high-risk financial assets need to be sold - it is difficult to see through the total group data submitted by the central enterprises. taking the asset-liability ratio indicator as an example, the data of these financial assets seem to be "okay".

the board member of the above-mentioned central enterprise is discussing the definition of high-risk financial assets with his team. he hopes that the state-owned assets supervision and administration commission can issue specific operating rules as soon as possible, such as which types of equity need to be sold and what the judgment criteria are.

based on the "method for risk classification of financial assets of commercial banks" (no. 1, 2023) issued by the people's bank of china, he proposed the following judgment principles within the team: the principle of authenticity, risk classification should truly and accurately reflect the risk level of financial assets; the principle of timeliness, timely and dynamically adjust the classification results according to the debtor's ability to perform and changes in financial asset risks; the principle of prudence, if the risk classification of financial assets is uncertain, the classification level should be determined from the lowest; the principle of independence, the risk classification results of financial assets depend on the independent judgment of commercial banks under the premise of compliance with laws and regulations.

the board members of the central enterprise divided the financial assets of the enterprise into normal, special mention, substandard, doubtful and loss categories according to their risk levels. the last three categories are collectively referred to as "non-performing assets."

he said that the definition of high-risk financial assets involves classifying the risk level of assets and conducting a comprehensive assessment based on factors such as their performance capacity, overdue status, and credit impairment. however, the situation of central enterprises is very special. in addition to the assessment requirements of the sasac, central enterprises need to consider more risk management and asset management factors. on this point, the sasac needs to give clearer operational opinions.

the above-mentioned state-owned asset person said that first of all, the sasac will not simply require central enterprises to sell all financial equity, after all, finance plays an important role in the operation and development of central enterprises. appropriate financial assets can help enterprises manage risks, operate capital and enhance profits.

secondly, it is impossible for a company to sell all its financial assets overnight. such an operation would cause market turmoil and have an adverse impact on the company's stable operation.

the person in charge of the state-owned assets revealed that in the next step, when problems arise in the financial assets of relevant central enterprises, the sasac will take decisive measures to deal with them, such as strengthening supervision and holding people accountable, to ensure that risks are effectively controlled. in general, the sasac will pay more attention to risk control and compliance in the management of the financial assets of central enterprises, rather than simply selling them all.

say goodbye to quick money

the chief accountant of the above-mentioned central enterprise believes that the era in which central enterprises make quick money by expanding their territory through industrial and financial integration may be coming to an end.

previously, some central enterprises, driven by investment, had their own financial institutions. when they had financial licenses, they felt "very impulsive." the chief accountant said that when central enterprises were engaged in both finance and industry, things became difficult to control, and many of the original opportunities eventually turned into problems.

he said: "when we have a trust company or a fund company, we want to build a lot of structures and raise a lot of funds ourselves. when investing, these funds are a kind of bargaining chip."

he believes that some central enterprises do not really see the long-term value of investment in finance, which will increase risks to some extent.

another person from a central trading company also believes that when an enterprise develops to a certain scale, the combination of industry and finance seems to become a common phenomenon. in the process of development, large enterprises generally get involved in the financial field in order to further expand their influence and control. the financial industry has the characteristics of high leverage and high returns, which can bring more capital liquidity and profit opportunities to enterprises. therefore, many large enterprises will eventually form a business model with financial business as the core.

over the years, the integration of industry and finance of central enterprises has been a process of gradual development and deepening, involving the combination of industrial capital and financial capital to promote the efficient operation of funds, capital, assets and resources within the enterprise group.

in practical exploration, the combination of industry and finance has played an important role in the development of central enterprises, such as improving the efficiency of capital operation, reducing financing costs, extending industrial chain financial services through financial companies, and supporting the development of the group's main business.

some central enterprises have obtained financial licenses such as banking, securities, trust, and futures through equity transfers, mergers and acquisitions, and equity investments, expanding their own industrial chain service capabilities.

over time, some problems began to arise in the integration of industry and finance of some central enterprises. for example, in the process of integration of industry and finance, some central enterprises lacked effective interaction and coordination between industry and finance, and financial business could not serve industrial development well. the asset-liability ratio of the financial business of some central enterprises was high, exceeding the appropriate level, which increased the financial risks of the enterprises.

a person from a central state-owned construction company said that taking the ppp (government and social capital partnership model) project as an example, in the process of industrial and financial integration, his company had experienced a series of accumulated and exposed risks due to adjustments in policy orientations, insufficient attention to risk management, and an imperfect risk prevention and control system.

some central enterprises are too focused on the development of financial business, while neglecting the stability and improvement of their main business, resulting in an imbalance in the allocation of corporate resources. in addition, the mutual shareholding between enterprises and financial institutions may increase internal transactions and moral risks.

andthe release of the "financial restriction order" will prompt major central enterprises to make appropriate changes in their next step of industrial and financial integration, and to integrate industry and finance in a more stable manner in accordance with the new assessment requirements of "one profit and five rates", with more emphasis on supporting the main business of enterprises rather than making quick money.

from the perspective of the path to implementing the "financial limit order", both equity participation and controlling shares have their own difficulties.

after contacting a number of central enterprises, the above-mentioned state-owned enterprise personnel believe that the situation of controlling a controlling stake is relatively easy to handle, while the situation of participating in a stake is more complicated.

the problem with participating in the equity stake is that, although the central enterprises are one of the investors, they do not have the decision-making power and their influence on decision-making is limited. when they are asked about the reasons for participating in the equity stake and the specific circumstances behind it, they often find it difficult to give a clear explanation.

he suggested that in the next step, state-owned enterprises should be more cautious in the management of financial assets, ensure that their investment decisions are transparent, and have a clear understanding and control of possible risks and responsibilities.

however, the chief accountant of the above-mentioned central enterprise feels that controlling shares is more difficult to operate.

he believes that when a company participates in a stake, it expects high returns; when a company holds a controlling stake, it considers greater voice.

he said: "compared with equity participation, the risk of controlling a company is relatively higher. when an industrial group controls a financial institution, the risk is particularly significant because there may be situations where the direction is unclear and it is difficult to make correct judgments." at present, the risk of controlling financial institutions, especially when many central enterprises have their own fund companies, trust companies and wealth companies, will continue to increase. when controlling a company, it is also difficult for the company to control the relationship between its own industry and financial group, which will increase the difficulty of risk management.

the above-mentioned state-owned asset personage suggested that, in the next step, central enterprises must retain their core financial assets to maintain the long-term stability and sustainable development of the enterprise. for non-core financial assets, central enterprises should make reasonable allocations based on market conditions and corporate strategies, and sometimes may need to sell or reorganize them in a timely manner to optimize asset structure and improve asset efficiency. at the same time, central enterprises should maintain a transparent and responsible attitude when handling financial assets to ensure that all operations are conducive to maximizing corporate value and minimizing risks.