Economist Song Qinghui: Is it necessary for listed companies to invest in financial management?

Under the premise of complying with regulatory requirements, the stability of the main business and the company's abundant cash flow, it is understandable to invest in wealth management products, but whether the underlying assets of the selected products can stand the test, whether the risk control is in place, etc., are important factors to test whether their investment and financial management can continue to benefit. Idle funds of listed companies can be purchased for wealth management, but they must pay attention to safety and must not engage in speculative activities. If the company's main business is sluggish and cash flow is tight, it is still obsessed with investment and financial management to "not do business".

Famous economist Song Qinghui

Famous Perspectives | Song Qinghui: Is it necessary for listed companies to invest in financial management?

■ Song Qinghui

Listed companies frequently participate in investment and financial management, and the risks cannot be ignored. Recently, another listed company announced its participation in securities investment. On December 13, Hanye Co., Ltd. said that the company intends to use no more than 200 million yuan of its own funds for securities investment. Previously, Zheng Coal Machinery issued an announcement saying that it had invested in subscribing to 300 million yuan of trust products, and had redeemed nearly 30 million yuan in advance due to private equity fraud. As a result, Zheng Coal Machinery also received a regulatory letter from the Shanghai Stock Exchange on the "progress of the purchase of trust products".

For the above phenomenon, I believe that if a listed company has idle funds, it can obtain a certain investment income by investing in some low-risk products such as currencies and bonds. However, if a large amount of funds are invested in high-risk varieties, it is necessary to pay attention to control and prevent risks, because once there is a huge loss in investment, it will have a greater impact on the company's performance.

In fact, there are not a few listed companies whose performance has declined due to stock speculation. For example, the net profit of Shaanxi Coal Industry fell by more than 50% in the first half of the year. Among them, the fair value change profit and loss was negative 2.660 billion yuan, a sharp decline year-on-year. From the perspective of investment types, the financial assets measured at fair value of Shaanxi Coal Industry include private equity funds, public funds, stocks, etc., of which the change profit and loss of stocks is the largest, at minus 2.225 billion yuan. It is not surprising that the securities investment plans of many listed companies have attracted controversy. But at the same time, the number of listed companies involved in securities investment is also quite large.

According to the data, as of the end of the first half of this year, a total of 652 listed companies participated in securities investment, with a total of 2,663 securities held. From the perspective of invested companies, 32 A-share companies were invested more than 1 billion yuan in the first half of the year. However, in the face of frequent fluctuations in the capital market since the beginning of this year, many listed companies have suffered losses to a certain extent in the hands of wealth management products. In fact, this is also understandable, after all, a considerable number of listed companies lack investment and financial professionalism, so it is reasonable for them to suffer widespread losses.

In particular, in terms of investment in private equity products, some listed companies have suffered losses. This is because, compared with listed companies, private equity funds are more professional, and the threshold for private equity investment is relatively high. Once a listed company subscribes to a large amount of private placement products, and does not pay close attention to its risk control and investment trends, it may suffer large losses.

In general, investment and financial management behaviors such as "stock speculation" of listed companies are not a long-term solution, and they are also a "double-edged sword" in performance, which needs to be cautious.

First, from a favorable aspect, if the listed company invests and manages properly and has an appropriate scale, on the one hand, it is conducive to making full use of idle funds to improve the company's financial efficiency and help the company increase its performance level. On the other hand, it is conducive to "borrowing chickens to lay eggs", that is, the income brought by investment and financial management can promote the company's strategic transformation to a certain extent, or to carry out the next step of mergers and acquisitions and other capital actions, which is also to meet the needs of the company's strategic development. In recent years, many listed companies have stated in their financial announcements that the purpose of wealth management is to "optimize the financial structure, make reasonable use of their own funds, fully improve the efficiency and rate of return of funds through entrusted wealth management and securities investment, and strive to maximize the returns of the company and shareholders." ”

Second, on the downside, if a listed company wants to be continuously recognized by the market, it needs to continue to focus on its main business in the future. Because only a substantial increase in the main business can ultimately improve the quality of listed companies. Therefore, listed companies must have foresight and determination in their development, and they cannot just think about making "quick money", otherwise they will eventually be eliminated by the capital market due to the "bitter fruit". Especially in terms of stock investment, many listed companies like to put all their "eggs" into this "basket" of the stock market, which undoubtedly increases the investment risk, and even drags down the main business, and the gains outweigh the losses.

In other words, if a listed company holds a small number of shares or invests in companies related to its main business, this is also a normal situation. However, if there are a large number of shares and a wide range of industries, the reasons should be specifically analyzed. Because it is true that some listed companies ignore their main business and spend a lot of money to speculate in stocks, and later lose money in stock speculation, and their main business is seriously affected, investors should remain highly cautious about such companies.

All in all, we should objectively look at the investment and financial management behavior of listed companies, under the premise of complying with regulatory requirements, stable main business and abundant cash flow of the company, it is understandable to invest in wealth management products, but whether the underlying assets of the selected products can stand the test, whether the risk control is in place, etc., are important factors to test whether their investment and financial management can continue to benefit. Idle funds of listed companies can be purchased for wealth management, but they must pay attention to safety and must not engage in speculative activities. If the company's main business is sluggish and cash flow is tight, it is still obsessed with investment and financial management to "not do business".

The author is the famous economist Song Qinghui, the author of "Accelerating the Country".

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