Boldly advance and retreat to optimize the layout
Respect the market to enhance value
Recently, the topic of market value management has attracted much attention from the market. The purpose of market value management is to improve the value creation ability of listed companies and improve the development quality of listed companies. For listed companies controlled by central enterprises, it is of great practical significance to strengthen the management of market value at present. Recently, the low valuation of some listed companies controlled by central enterprises has attracted market attention. It should be said that there are many reasons for the low valuation of some listed companies controlled by central enterprises, including factors such as the relatively traditional industry and low asset profitability, as well as the unreasonable market valuation system and the strong speculative atmosphere. For listed companies themselves, in addition to actively participating in the improvement and reconstruction of the market valuation system, they should also fully understand the logic of market valuation, make better use of the function of the capital market, strengthen the interaction with the capital market, continuously optimize their own industrial layout and capital structure, and accelerate the improvement of the company's quality and value creation capabilities. In terms of industrial layout, the market often likes the "new" and hates the "old". As the saying goes, to buy stocks is to buy the future. On the whole, most of the listed companies with serious undervaluation are concentrated in traditional industries with prominent overcapacity and greater pressure on environmental protection. Areas with reasonable or high valuations are mainly concentrated in emerging industries. Individually, even some leading listed companies in traditional industries with strong profitability and good cash flow often have a price-to-earnings ratio of less than 10 times. On the other hand, some fast-growing companies in emerging fields, even if their profits are not high or even in the loss stage, the price-earnings ratio can still reach tens or hundreds of times. There are many reasons for this disparity, but the industrial layout is undoubtedly an important reason. In this context, it is necessary to accelerate the layout of strategic emerging industries as an important starting point to promote the listed companies controlled by central enterprises to strengthen market value management and enhance their value creation capabilities. Although central enterprises have made a series of breakthroughs in the layout of strategic emerging industries in recent years, the overall speed is not fast enough, and the advantages are not obvious enough. The capital market is a refractor, which reflects the shortcomings of central enterprises in this regard in a more intuitive valuation way. The capital market has put forward new requirements and provided a large platform. For strategic emerging industries with greater risks, there are often many pain points in relying on self-accumulation or direct financing, but the capital market has a higher tolerance for risks, supporting not only rapid expansion to seize the market, but also cross-border mergers and acquisitions and business transformation. A number of new power enterprises, such as the Internet and new energy vehicles, have risen rapidly by relying on the strong support of the capital market. Practice has proved that by making full use of the market's ability to allocate resources, especially the capital market, we can also concentrate our efforts on accomplishing great things. If there is advance, there must be retreat. To optimize the layout structure, we must not only boldly "advance", but also have the courage to "retreat". It is necessary to fully realize that state-owned capital also has an opportunity cost, and only by advancing and retreating, doing something and not doing something can we achieve the best cost and the greatest return, so as to further improve the core competitiveness and enhance the core function. For traditional industries, it is necessary to accelerate the transformation and upgrading of high-end, intelligent and green, continuously optimize the equity structure, and use reasonable state-owned equity to achieve effective control over enterprises, so as to achieve sustainable and stable development and stable profitability of enterprises, enhance the investment attractiveness of long-term capital, and then enhance market value. For assets that have no hope of turning around losses, areas that do not have competitive advantages, and even businesses and assets that are profitable but not in the direction of strategic development, we must truly dare to "retreat", accelerate the transformation of business structure in the "retreat", and migrate to both ends of the "smile curve". It is necessary to have a sober and correct understanding of advancing and retreating, and optimizing the layout. Needless to say, state-owned enterprises, especially central enterprises, are often in high spirits and making great progress when they "enter," and when they mention "retreat," they look ahead and hesitate. In order to speed up the optimization of the layout and structure of state-owned enterprises, they must not always be "easy to get started and difficult to get rid of." Resources are always scarce, and in order to accelerate the optimization of increments, it is necessary to boldly adjust the stocks. The Zhenlong chess game, which is full of chess pieces, lacks room for movement. Only by daring to "give" can we better "get". Listed companies can make full use of the characteristics of strong liquidity and fair pricing in the capital market, and get started when they should get started, and get rid of when they should get rid of it. In recent years, a number of enterprises, including China Resources, SDIC and China Baowu, have grasped the strategic initiative of development between reasonable advance and retreat. In the final analysis, the acceleration of the advance and retreat of listed companies of central enterprises and the optimization of the layout structure is to respect the laws of the market, an important measure to improve the core competitiveness and enhance the core function, and it is also the due meaning of highlighting scientific and technological innovation and achieving high-quality development. (This article is the frontispiece of the April 2024 issue of "State-owned Assets Report" magazine Author: Liu Qingshan)
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