A Shares 100 Billion Government Subsidies "Arena" Automobile, Electronics, Chemical Industry Once Again Top Three Of The Industry.

On January 1, 2020, the first day of the new year, 600733.SH announced that it had received 300 million yuan reward from Beijing finance and Economic Development Zone Financial Audit Bureau.

This amount will be reflected in the 2019 annual report.

Blue Valley said that the above government subsidies were formulated as revenue related government subsidies, and the impact on the company's total profit in the year 2019 is expected to be 300 million yuan and will be included in other income subjects.

Before the annual report, the tide of subsidy will rise again.

In twenty-first Century, according to the incomplete announcement of the announcement of listed companies, only 380 listed companies in December 2019 had received government subsidies, and in December 31st, up to 49 in December 31st. This does not include government subsidies that do not touch the net profit of 10% and so on. More government subsidy data will be disclosed in the subsequent annual reports.

In the first three quarters of 2019, 3548 listed companies disclosed government subsidy income in the earnings report, accounting for 94.36% of the 3760 listed companies, with a total government subsidy of 105 billion 571 million yuan.

Whether from the total or the average, the government subsidy of listed companies has been on the rise since 2010.

Over 100 billion government subsidies

By the end of the year, the "shell protection" war of listed companies has started, and government subsidies have also become an important way to turn losses into profits.

According to the relevant provisions of "accounting standards for Enterprises No. sixteenth - government grants" and other related provisions, government subsidies are divided into assets related government subsidies and income related government subsidies. The government subsidy related to assets refers to the government subsidy obtained by the enterprise for the purchase or construction or the formation of long-term assets in other ways. Revenue related government subsidies refer to government subsidies other than assets related government subsidies.

"Listed companies receive government subsidies, generally related to business and assets related to two categories. Some industries need financial support for incentives, some may lose money without subsidies, and no one is willing to do so, and others use asset compensation such as demolition. Wang Jiyue, a senior investment bank, pointed out when interviewed.

According to twenty-first Century economic report reporter statistics, in the first three quarters of 2019, the top 100 of the listed companies came from the electronics, automobile and transportation industries.

Also from the 2018 annual report, the government subsidies for automobiles, electronics and chemical industries were over 10 billion, and ranked the top three in the industry for three consecutive years.

"From the present point of view, the listed companies that receive government subsidies can be classified into the following categories: one is related to the national economy and the people's livelihood. For example, agricultural subsidies and other special subsidies. The two is in line with various supportive policies of the state and local governments, most of which are high and new technology enterprises. Three is poor performance or ST companies, local governments to rescue funds or to protect their shell. Four, there are other contracts with local governments, which are similar to "one thing, one discussion." Pan Helin, executive dean of Digital Economics Research Institute of Zhongnan University of Economics and Law, pointed out to the economic report reporters in twenty-first Century 2 January.

In the first three quarters of 2019, the largest amount of government subsidy was Sinopec, reaching 3 billion 152 million yuan. In recent 10 years, the amount of government subsidy for listed companies was first picked up by China Petroleum and Sinopec.

After Sinopec, Guangzhou Automobile Group, SAIC Group, BOE A, BYD, TCL group, GREE electric appliance, Wan Hua chemical, rainbow share, Changan automobile and so on. The top 10 are private enterprises except BYD. They are state-owned enterprises, 10 in 4 cars, 3 in electronics, 2 in chemical industry, and 1 in household appliances GREE electric appliances.

The government subsidies for the auto industry show that many of them come from new energy subsidies.

Take the blue valley of Beiqi as an example. Since 2019, the 5 announcement has received government subsidies, all of which are supported by the new energy vehicle industry supported by local governments, totaling more than 1 billion 300 million yuan, accounting for other income subjects.

563 deficit after deduction of subsidy

From the first three quarters of 2019 financial data, 563 listed companies net profit minus government subsidies after a negative value.

The law is similar. According to the 2018 annual report, 125 listed companies net profit after deducting government subsidies from profit to loss.

At the end of the year, the "shell protection war" is coming to a climax. Will the 563 data be narrowed down to the end of 2019?

According to the incomplete announcement of the announcement of listed companies, only 380 listed companies received government subsidies in December 2019 alone, up to 49 in December 31st.

According to the information disclosure standards of listed companies, the government subsidy for the income related government subsidy accounts for more than 10% of the audited net profit of the listed company in the latest accounting year, and the absolute amount exceeds 1 million yuan to reach the disclosure standard. More government subsidy data will be disclosed in the subsequent annual reports.

"Most subsidies are not meant to protect the shell. Of course, a small amount of subsidies will be given to protect the shell. Wang Jiyue thinks.

Of the 563 companies that deducted government subsidies, 103 of them were ST and *ST companies. Some companies had high pressure to protect their shell.

The government subsidy has also worked many times.

For example, Luqiao, Shanxi (000755.SZ, formerly referred to as "*ST 3D"), lost 290 million yuan and 380 million yuan in 2012 and 2013 respectively, and finally realized losses in 2014 by stripping off non-profit assets and obtaining technology licensing revenue. Thereafter, it lost 2 consecutive years in 2015 and 2016 and again faced with the risk of delisting in 2017. In 2017, it carried out restructuring and shell keeping and accounting error correction, and finally succeeded in turning losses into profits in 2017 annual report.

To a large extent, this loss comes from the government's "timely relief".

*ST disclosed in three dimensions that the company received a total of 466 million yuan of government subsidy funds issued by the Linfen Municipal Finance Bureau. Another part of the smaller impact is that *ST 3D sold a 65% stake in its subsidiary. In 2017, Linfen's public budget revenue was 9 billion 710 million yuan. In addition, according to the open data of the official website of Linfen State Taxation Bureau, the enterprise income tax in Linfen completed about 1 billion 180 million yuan. Among them, the total revenue of Hongdong *ST county is about 970 million yuan, representing a total increase of about 490 million yuan over the previous year. 466 million yuan of government subsidies accounted for nearly half of Linfen's annual corporate income tax, and directly pursued Hongdong county's total tax revenue growth in 2017.

In *ST's three dimensional disclosure of the major asset sale and related transactions report (Draft) (Revised Draft), the government has attached importance to its shell keeping work. The summary of the Shanxi three dimensional coordination work conference on shell preservation requires: "we need to take comprehensive measures to ensure that Shanxi's three dimensions are not being delisted, effectively utilize the shell resources of listed companies, and at the same time Shanxi's transportation industry develops rapidly. It is urgent for the platform of listed companies to carry out asset management and operation."

Exit mechanism is improving

It is also common for local governments to help local listed companies achieve the targets of "protecting their shells" through the form of government subsidies. In terms of employment, tax revenue, industrial chain contribution, or "face", local governments do not like the delisting of Listed Companies in their own districts.

In accordance with the logic of pan and Lin, local governments use various names to subsidize listed companies. Starting from the interests of local governments, they are the embodiment of "maximization of interests". They are reasonable and sometimes are necessary measures to make up for the sharp fluctuations in capital markets. For example, in order to prevent large shareholders from breaking out of stock rights, a lot of places in the first half of 2019 introduced a bail-out fund, which has positive side. At the same time, we must prevent distorting market allocation, especially rent seeking or moral hazard. The government should help enterprises through market-oriented means, and try to avoid using public financial funds to help listed companies as far as possible.

For the "protect the shell" phenomenon, Wang Jiyue believes that the rules of delisting can be changed to investigate whether the former is the lower or the lower.

In recent years, along with regulators' efforts to push the implementation of the delisting system, some changes are also taking place.

In 2019, the central economic work conference proposed that we should improve the basic system of capital market, improve the quality of listed companies and improve the exit mechanism.

In September 2019, the Symposium on deepening the capital market reform held by the SFC also pointed out that we should vigorously promote the quality of listed companies. We should formulate and implement a quality action plan to improve the quality of listed companies, and properly handle the two links of import and export, and strive to optimize the increment and adjust the stock. We should strictly control the quality of IPO audit, give full play to the role of capital market mergers and acquisitions, and diversify the channels for delisting, so as to promote the survival of the fittest.

Sun Nianrui, deputy director of the SFC's listing department, also said that in the reform of the CGC's delisting system, a combination of financial class delisting indicators was set up to strive to eliminate "zombie enterprises" and "shell companies" accurately.