BEIJING, Oct. 31 -- A number of large State-owned
enterprises (SOEs) are qualified to fully list on the stock markets by floating
both A shares and H shares, Ji Xiaonan, chairman of the Board of Supervisors
with Large Key SOEs, noted in an article published on the China Securities News
Tuesday.
Full listing can boost SOE performance and value
premium, according to the article. By the end of 2006, total assets of the
central government-owned enterprises amounted to 12.2 trillion yuan (1.63
trillion U.S. dollars). Meanwhile their net totaled assets 3.6 trillion yuan,
sales revenue 8.1 trillion yuan, profits 750 billion yuan.
Domestically-listed central enterprises had combined
assets of 2.6 trillion yuan, net assets of 700 billion yuan, sales revenue of
4.9 trillion yuan, and profits of 400 billion yuan. Full listing of such a large
number of high-quality assets will remarkably raise the Chinese domestic stock
market value.
Ji advised SOEs to inject their assets into as many
listed units as possible and spin off the non-related assets first before full
listing. Enterprises planning full listing step by step should be cautious about
initially listing only part of their assets, and avoid partially listing their
main business, he said. It is better for them to issue A shares and H shares
simultaneously with the same number and price, he added.
There are still problems on full listing for large
SOEs, according to Ji. The first is who will be the shareholding entities after
listing, the State-owned Asset Supervision and Administration Commission of the
State Council or State-owned asset management companies.
The second problem is parent companies' functions.
Parent companies will be responsible for restructuring assets. Also problematic
is determining what role full listing can play in perfecting company structure
and transferring operations mechanisms. The last problem is controlling the
number of listed subsidiaries.
(Source: China Daily)
