The survival of tens of millions of private enterprises is receiving great attention in the context of the economic downturn.
At the end of November, a reporter from the 21st Century Business Herald interviewed Minsheng Bank's Nanjing, Suzhou, and Hangzhou branches, and conducted field research on a number of large-scale private enterprises in Jiangsu and Zhejiang, mainly in the manufacturing sector, including Yueyue Group, Chengxing Group, Huahong Group, Hengli Group, Zhenshi Group, Futong Group, Hailiang Group, and so on.
A number of private entrepreneurs called for more continuity in policy, state-owned enterprises, private enterprises should be treated equally.
Zhou Jie, vice chairman of the Federation of Industry and Commerce of Jiangsu Province, said frankly that private entrepreneurs are now confused about the market. On the one hand, because the market is more mature, competitors increase, globalization and other factors, private enterprises to make money more difficult, some private entrepreneurs take the money to speculate on the house rather than put into production; on the other hand, the state-owned enterprises, private enterprises, there are objective differences, but the difference is by no means so great, Jiangsu high-quality private enterprises (refers to the ability to sustain development, the contribution of the local economy of large enterprises) to enjoy the treatment of the treatment may be higher.
Advice on policy continuity and stability
"Previously, the lack of flexibility in the policy, and some even emergency brakes, one-size-fits-all, I'm a little confused." (hereinafter referred to as "Chengxing Group") Chairman of the Board of Directors and President Li Xing said directly.
According to the 21st Century Business Herald reporter understands, in recent years, due to the Chengxing Group in the industrial investment in the pace of the larger, the capital needs of enterprises mainly rely on the issuance of debt to solve the problem, meet the centralized payment of the greater pressure on the funds; and because of the current private enterprises and then issued debt bottlenecks, the liquidity gap in the funds is even greater. However, the recent support of Minsheng Bank, Industrial and Commercial Bank of China and other financial institutions, the coordination of liquidity syndicated loans, has greatly alleviated the financial difficulties of enterprises.
Li Xing said, private enterprises are facing multiple difficulties, financing difficulties, financing problems are only superficial.
"In 2013, we are not short of money, 3 billion cash on the books, the government pushed to engage in 100 billion enterprises, many banks over to talk about cooperation, we went to issue debt, five years cumulative 14.3 billion. And then there are difficulties, many banks abandoned us." Li Xing said. "After the private enterprise forum, whether the business environment has changed, the actual situation is not yet obvious."
Pan Wengang, president of the Wuxi branch of the Minsheng Bank, told the 21st Century Business Herald that although the situation is different for different industries and companies, in general, most of the listed companies in Wuxi are "poor". "In October this year, Chengxing Group repaid all the maturing bonds, but did not renew the bonds, we make up for the on-balance sheet loans."
"Few companies put financial, inventory and other overall data to us, but Chengxing Group open to us, and there are two bank employees stationed in the enterprise, you can understand the real situation of the enterprise." Pan Wengang said.
He confessed that private entrepreneurs are concerned about the lack of continuity of the policy, the bank is equally concerned that the policy can not be braked sharply, should give enterprises a transition period.
"It is important for enterprises to control a reasonable financing structure. Short loans and long use is one of the ****ual problems of private enterprises, which is a great pressure on private enterprises to transfer loans, but also a problem that banks need to solve." Pan Wengang said.
State-owned enterprises and private enterprises financing differences to be resolved
For the current economic trends, Zhenshi Group Chairman Zhang Yukqiang to the "Troika" cut into the analysis: "Now support the development of private enterprises, banks to increase the loan, the new round of investment drive is effective, it remains to be seen. Whether the investment drive is effective remains to be seen. However, the proportion of consumer-driven is increasing, which is a good thing. Have to pay attention."
In terms of financing, Zhang Yujiang said that the differences between the financing of state-owned enterprises and private enterprises exist objectively.
"According to my understanding, the average one-year borrowing rate of large state-owned enterprises 3.9%, while the average one-year borrowing rate of private enterprises 4.9%. This has something to do with the policy direction. At the same time, the government can not force banks to lend, who is responsible for bad debts?" Zhang Yujiang, for example.
In this regard, Chenghsing Group capital department general manager Xu Jianbo also shared the same feeling: "the same type of project, the bank's attitude towards state-owned enterprises, private enterprises loans are not the same. For example, we work with a large state-owned bank, the head office of the petrochemical industry as a prudent entry into the industry, but a state-owned petrochemical enterprises are not subject to this restriction."
Xu Ruize, deputy general manager of the corporate business department of the head office of Minsheng Bank, introduced that Minsheng Bank is committed to being a bank for private enterprises, and the head office has set up a rescue mechanism for short-term liquidity difficulties of private enterprises, and there have been practice cases.
Focus on the main business and diversification of the layout of the debate
In the economic upturn, many private enterprises rapid expansion, diversification of the layout; deleveraging, faced with greater financial pressure. And focus on the main business of the private enterprise pressure is relatively small.
Talking about the logic of diversified layout, Zhang Yujiang told the 21st Century Business Herald reporter, Zhenshi Group was first engaged in the manufacture of glass fibers, real estate development, hotel tourism, etc. is not the main business, accounting for a very small portion of the future will not be focused on the layout; after 2008, the judgement can not rely on the manufacturing industry, began to look forward to the tertiary industry, mainly the pension and education industry.
"Our diversification is an extension of the existing industry, currently relying on basic bank loans, the overall debt ratio of about 59%." Zhang Yujiang claimed.
Another private enterprise, Yuyue Group, focuses on the health industry, with its A-share listed company Yuyue Medical, so it is less affected by deleveraging and is looking for investment targets.
"We have abundant cash flow, low debt ratio, only a few percent, deleveraging on the fish have not been too much pressure. We focus on the main business, not tempted by real estate; also do not invest in finance, never external guarantee. It is easy for banks to review our financial statements. Jiangsu does have some enterprises have financial difficulties, acquisition is easy, but integration is not a simple matter." Yuyue Group Finance Director Yuan Xin told the 21st Century Business Herald reporter.
Yuan Xin further said that the current market environment, for conservative, focused on the main business, high-quality listed companies, on the contrary, is a good thing, you can look for suitable investment opportunities.
Blind diversification has led to operational difficulties, and this is also the case for small and micro enterprises. Cao Liang, president of Minsheng Bank Suzhou Branch, said frankly: "small and micro-enterprises risk, an important factor is that, in the economic upturn, there is too much money, took the money, did not expand production and operation, but instead to buy a house, consumption, nickel and diming, there is an investment risk. When the economy is down, the main business is difficult, the return on investment is not so fast, easy to liquidity problems."
Lin Jingran, president of the Nanjing branch of Minsheng Bank, told the 21st Century Business Herald, "We don't think it's a 'campaign' to support private enterprises now. As for the market, whether it will cause a new round of blind investment in private enterprises, can not say that there is no such a possibility, but it is too early to judge. The current macro-environment is not the same, did not appear 'flooding' phenomenon."
Hailiang revelation: early active deleveraging
Cong Jun, president of Hangzhou branch of Minsheng Bank, introduced the rich variety of financing for private enterprises in Zhejiang, the past bond financing accounted for a large proportion of the past, and therefore re-issuance of debt faced difficulties; deleveraging, more turn to the table of the loan.
"After deleveraging, this year, private enterprises in general have a stage of difficulties, Zhejiang private enterprises are more prominent. But we took the initiative to deleverage in 2016, so this year is easier." Hailiang Group Chairman and President Cao Jianguo confessed.
Cao Jianguo said, Hailiang Group started with copper processing, after years of development, to 2016 with six major sectors, including real estate; after 2016, industrial restructuring, emphasizing the need to do something, do not do something; in 2017, focusing on the development of the three major directions, and decisively give up other industries.
The three major directions of focused development include: prioritizing the development of the education industry, including basic education and pre-school education; leapfrogging the development of the manufacturing of non-ferrous materials; and steadily developing the health industry, including health food, medical care, and the pension industry.
"At that time, the main idea was to focus on the main industry, other industries we can not compete with the head of the company despite doing well, so resolutely withdrawn." Hailiang Group Vice President Ji Danyang frankly.
Focus on the main industry, Ji Danyang told the 21st Century Business Herald reporter, Hailiang Group is planning to acquire 100% of the shares of a leading European copper pipe manufacturing company, is docking with the Export-Import Bank of China for more than 100 million euros in merger and acquisition loans, is expected to complete the acquisition in the first quarter of next year.
(Source: 21st Century Business Herald)