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E-mail China.org.cn, February 4, 2024
Xinhua News Agency:
As mentioned in Mr. Yuan's response, this year's focus will continue to be on improving the quality of central SOE holding listed companies. With regard to this, as SASAC released a plan for reinforcing the quality of these companies in 2022, I would like to inquire as to the progress of related work and what measures the SASAC will take to promote the quality and efficiency of central SOE holding listed companies? Thank you.
Yuan Ye:
Thank you for your questions. It is crucial to improve the quality of central SOE holding listed companies. As I mentioned earlier, we have emphasized "one profit and five rates" in the target management system to motivate the ability of value creation for central SOEs. The requirement for listed companies is the same. In recent years, we have consistently focused on quality improvement of central SOE holding listed companies to increase investor returns. For detailed information on relevant work, I'll ask Mr. Xie to respond.
Xie Xiaobing:
Thank you. The previous discussions by our colleagues focused on high-quality development. Listed companies account for a large proportion of central SOEs and are an important part of central SOEs, as we have previously explained to our media friends before. Our high-quality assets are primarily held by listed companies. The high-quality development of listed companies is closely related to that of central SOEs. Just now, our work on promoting the high-quality development of central SOEs was introduced. Here, I would like to share what we have done in light of the characteristics of listed companies.
In recent years, we have collaborated with the China Securities Regulatory Commission (CSRC) and other relevant departments to promote the high-quality development of listed central SOEs. Our work has focused on several key areas:
First, we have contributed superior offerings to the capital market and have optimized its layout and function. In recent years, we have listed 21 companies on the A-share market, 14 of which are listed on the Science and Technology Innovation Board. These are companies with strong technological capabilities. At the same time, we have actively utilized these companies' platforms to conduct professional restructuring, incorporating quality assets into the listed companies. According to preliminary statistics, the value of integrated assets in the past two years has exceeded 300 billion yuan.
Second, we have ensured synergy between science, technology, industry, and finance. Through the platform of listed companies, we attracted relevant funds to bolster scientific and technological innovation capabilities. This effectively connected the "technology-industry-finance" chain, and made it more visible in the capital market. According to preliminary statistics, in the first three quarters of 2023, listed companies controlled by central SOEs invested 288.5 billion yuan in scientific research, with an average of 780 million yuan per company.
Third, we have maintained high standards in the disclosure of information from listed companies. Our listed central SOEs have adhered to the regulatory requirement of “taking information disclosure as the core." In the information disclosure quality evaluation conducted by the Shanghai and Shenzhen stock exchanges, nearly half of our listed companies were rated A, indicating a very high standard of information disclosure. At the same time, we have actively expanded our ESG reporting coverage, achieving 80% by the end of last year. According to our plans, we will achieve full coverage in the 2023 annual report disclosure.
Fourth, we have constantly enhanced our value creation and market recognition. We have strengthened regular and multi-level interactions with investors, achieving full coverage in performance briefings for three consecutive years. Both the chairman and general manager have attended the performance briefings of listed SOEs. In 2023, 12 listed central SOEs engaged in stock buy-backs, while 32 saw an increase in holdings by major shareholders. In 2022, the cash dividend payout ratio reached 44.6%. By mid-2023, 20 central SOEs had issued mid-term performance dividends totaling nearly 80 billion yuan.
Overall, listed companies controlled by central SOEs have remained focused on their core businesses, leading to a continuous increase in overall scale. Business performance has maintained a generally stable trend, with the industrial layout becoming more optimized and operation quality steadily improving. According to the third-quarter report of 2023, the total assets and net assets of the 383 listed companies controlled by central SOEs on China’s mainland have reached 53 trillion yuan and 17 trillion yuan, respectively. The operating revenue and net profit attributable to equity holders were reported at 18.63 trillion yuan and 1.06 trillion yuan, respectively. Overall, the return on equity (ROE) reached 7.53%.
Now, 154 out of the 383 listed companies are in strategic emerging industries, representing over 40% of the total. By the end of 2023, the market value of listed companies controlled by central SOEs on China’s mainland had reached 13.5 trillion yuan. We recognize that enhancing the quality of listed companies is a long-term endeavor requiring sustained efforts. Moving forward, we will concentrate on the following aspects to further improve their quality:
First, we will continue to build a listing pattern with a clear definition and incremental development. We will promote the general idea of "strengthening and improving a group of enterprises, adjusting and revitalizing a batch of enterprises, and cultivating and reserving a bunch of enterprises." This approach aims to steadily improve incremental growth, consistently deliver high-quality products to the capital market, and actively improve existing stocks. As a result, listed companies can intensively work in their industries to grow better and stronger, becoming leading entities in their sectors. On the other hand, we have resolved to proactively implement policies and resolutely adjust and revitalize the listing platforms of some enterprises that do not align with their main business or advantages.
Second, we will make continuous efforts to improve the standard operation of listed companies. We will enhance cooperation and communication with securities regulatory authorities to jointly promote the standardized operation of listed central SOEs and further improve the quality of information disclosure. At the same time, we should properly resolve the risks of listed companies and encourage them to set an example for honest and standardized operations in the capital market.
Third, further research will be conducted on incorporating market value management into performance assessments of central SOE leaders. In the early stages, we have encouraged central SOEs to include indicators related to value realization in the performance evaluation system of listed companies. Building on this, we will include the effectiveness of market value management in the assessment of central SOE leaders. This approach aims to guide them to pay more attention to the market performance of listed companies they manage. We will convey confidence and stabilize expectations promptly through market holding increases, buybacks, and other means and enhance cash dividends to better reward investors.
Thank you.
