What private entrepreneurs in Jiangsu and Zhejiang say: Policies must have continuity and state-owned and private enterprises should be treated equally

The life and death of thousands of private enterprises is receiving great attention in the context of economic downturn.

At the end of November, reporters from the 21st Century Business Herald interviewed Minsheng Bank Nanjing, Suzhou, and Hangzhou branches, and conducted on-site surveys of many large private enterprises in Jiangsu and Zhejiang, mainly manufacturing enterprises, including Yuyue Group, Chengxing Group, Huahong Group, Hengli Group, Zhenshi Group, Futong Group, Hailiang Group, etc.

Many private entrepreneurs called for more continuity in policies and that state-owned enterprises and private enterprises should be treated equally.

Zhou Jie, vice chairman of the Jiangsu Federation of Industry and Commerce, said frankly that private entrepreneurs are now confused about the market. On the one hand, due to factors such as more mature markets, more competitors, and globalization, it is more difficult for private enterprises to make money, and some private entrepreneurs use money to speculate in real estate instead of investing in production; on the other hand, there are objective differences between state-owned enterprises and private enterprises, but the differences It is by no means that big. High-quality private enterprises in Jiangsu (referring to enterprises with strong sustainable development capabilities and large contributions to the local economy) may enjoy higher benefits.

Suggestions on policy continuity and stability

"Previous policies lacked flexibility, and some even stopped suddenly and applied one-size-fits-all. I am a little confused." Jiangyin Chengxing Industrial Group Co., Ltd. (hereinafter referred to as " Li Xing, chairman and president of Chengxing Group, said bluntly.

According to the 21st Century Business Herald reporter, in recent years, due to Chengxing Group’s rapid pace in industrial investment, its capital needs are mainly met by corporate bond issuance, and the capital pressure is greater when it encounters centralized redemption; And because private companies currently face bottlenecks in issuing bonds again, the liquidity gap in funds is even greater. However, recently, with the support of financial institutions such as Minsheng Bank and Industrial and Commercial Bank of China, the coordination of working capital syndicated loans has greatly eased the financial difficulties of enterprises.

Li Xing said that private enterprises face multiple difficulties, and the problems of difficult and expensive financing are just symptoms.

“In 2013, we were not short of money, with 3 billion in cash on our books. The government promoted the establishment of a 100-billion-level enterprise. Many banks came to discuss cooperation, so we issued bonds. In five years, we issued a total of 14.3 billion . Then when difficulties arose, many banks abandoned us," Li Xing said. "After the private enterprise symposium, the actual situation is not obvious whether the corporate environment has changed."

Pan Wengang, president of Minsheng Bank Wuxi Branch, told the 21st Century Business Herald reporter that although the situation is different in different industries and different companies , but generally speaking, most listed companies in Wuxi are "poor". "In October this year, Chengxing Group repaid all maturing bonds, but did not renew the bonds, so we made up for the on-balance sheet loans."

"Few companies provide overall financial, inventory and other data to the We see, but Chengxing Group is open to us, and two bank employees are stationed in the company, so we can understand the real situation of the company," Pan Wengang said.

He said frankly that private entrepreneurs are worried about the lack of continuity of policies, and banks are also worried. The policy should not be stopped suddenly and companies should be given a transition period.

“For enterprises, it is very important to control a reasonable financing structure. Short-term loans and long-term loans are one of the most fundamental problems for private enterprises. This puts great pressure on private enterprises to re-loan, and it is also something that banks need to solve. problem." Pan Wengang said.

The differences in financing between state-owned enterprises and private enterprises need to be solved

Regarding the current economic trend, Zhang Yuqiang, chairman of the board of directors of Zhenshi Group, started the analysis with the "troika": "Now we support the development of private enterprises, and banks increase loans It remains to be seen whether the new round of investment is effective, but the proportion of consumption is increasing, which is a good thing." In terms of financing, Zhang Yuqiang said that there are objective differences between state-owned enterprises and private enterprises. .

"As far as I know, the average one-year borrowing rate of large state-owned enterprises is 3.9, while the average one-year borrowing rate of private enterprises is 4.9. This has something to do with policy orientation. At the same time, the government cannot force banks to lend money and bad debts Who is responsible?" Zhang Yuqiang gave an example.

In this regard, Xu Jianbo, general manager of the Capital Department of Chengxing Group, also feels the same way: "For the same type of project, banks have different attitudes towards loans to state-owned enterprises and private enterprises. For example, we have different opinions with a major state-owned bank Cooperation, the head office has designated the petrochemical industry as a prudent industry to enter, but a certain state-owned petrochemical company is not subject to this restriction."

Xu Ruize, deputy general manager of the corporate business department of the head office of Minsheng Bank, said that Minsheng Bank is committed to being privately owned. The corporate bank and head office have set up a rescue mechanism for short-term liquidity difficulties of private enterprises, and there are already practical cases.

Debate between focusing on main business and diversified layout

During the economic upturn, many private enterprises expanded rapidly and diversified their layout; after deleveraging, they faced greater financial pressure. Private enterprises that focus on their main businesses are under relatively little pressure.

Talking about the logic of diversified layout, Zhang Yuqiang told the 21st Century Business Herald reporter that Zhenshi Group was the first to engage in glass fiber manufacturing. Real estate development, hotel tourism, etc. are not its main business, accounting for only a small part, and will not be involved in the future. We will focus on the layout; after 2008, we will judge that we cannot rely solely on manufacturing and start to be optimistic about the tertiary industry, mainly the elderly care and education industries.

"Our diversification is an extension of existing industries. Currently, we basically rely on bank loans, and the overall debt ratio is about 59." Zhang Yuqiang said.

Another private enterprise, Yuyue Group, focuses on the health industry. It owns the A-share listed company Yuyue Medical. Therefore, it is less affected by deleveraging and is looking for investment targets.

"We have abundant cash flow and a low debt ratio of only more than ten percent. Deleveraging does not put much pressure on Yuyue. We focus on our main business and are not tempted by real estate; we do not invest in finance. We never provide external guarantees. It is very easy for banks to review our financial statements. There are indeed some companies in Jiangsu that have financial difficulties and acquisitions are easy, but integration is not a simple matter," Yuyue Group Financial Director Yuan Xin told 21st Century Business Herald. reporter.

Yuan Xin further said that the current market environment is a good thing for listed companies that are conservative, focus on their main business, and have high quality, and they can look for suitable investment opportunities.

Blind diversified development leads to operational difficulties, and this situation also occurs in small and micro enterprises. Cao Liang, president of Minsheng Bank Suzhou Branch, said frankly: "An important factor in the risks faced by small and micro enterprises is that when the economy is rising, there is too much money. Instead of expanding production and operations, the money is used to buy houses, consume, etc. There are all kinds of investments. Risks. When the economy goes down, the main business encounters difficulties, investment returns are not so fast, and liquidity problems are prone to occur."

Lin Jingran, president of Minsheng Bank Nanjing Branch, told the 21st Century Business Herald reporter: "We are not. I think it is a "movement" to support private enterprises. As for whether it will lead to a new round of blind investment in private enterprises, it cannot be said that it is not possible, but it is too early to judge now. The current macro environment is no longer the same. The phenomenon of 'flooding' has appeared."

Hailiang's revelation: proactive deleveraging in advance

Cong Jun, president of Minsheng Bank Hangzhou Branch, said that Zhejiang's private enterprises have a wide range of financing types, and in the past, bonds Financing accounts for a large proportion, so it is difficult to issue bonds again; after deleveraging, more will turn to on-balance sheet loans.

"After deleveraging, private enterprises generally have staged difficulties this year, and private enterprises in Zhejiang are more prominent. But we took the initiative to deleverage in 2016, so this year is relatively easy." Cao Jianguo, chairman and president of Hailiang Group Frankly.

Cao Jianguo said that Hailiang Group started with copper processing. After years of development, it owned six major sectors including real estate in 2016. After 2016, it carried out industrial adjustments, emphasizing the need to make a difference and be effective. What we should not do; focus on developing three major directions in 2017 and decisively abandon other industries.

The three major directions of key development include: giving priority to the development of the education industry, including basic education and preschool education; leapfrogging the development of non-ferrous material manufacturing; and steadily developing the health industry, including health food, medical care, and elderly care industries.

“The main idea at that time was to focus on the main business. Although we were doing well in other industries, we were unable to compete with the leading companies, so we decided to withdraw.” Ji Danyang, vice president of Hailiang Group, said frankly.

Focusing on the main business, Ji Danyang told the 21st Century Business Herald reporter that Hailiang Group is planning to acquire 100 shares of a leading European copper pipe manufacturing company and is in the process of receiving a merger and acquisition loan of more than 100 million euros from the Export-Import Bank of China. , the acquisition is expected to be completed in the first quarter of next year.

(Source of article: 21st Century Business Herald)