Hundreds Of Billions Of Foreign Exchange Companies Lost Billions Of Dollars: RMB Continued To Depreciate

Recently, many enterprises reported half a year, and many enterprises lost profits because of the loss of foreign exchange.

Among them, the loss of steel, energy and aviation enterprises is particularly serious.

The reason for the huge exchange losses of these enterprises is the continued depreciation of the yuan since the beginning of this year.

According to media reports, before the temptation of low interest rates in overseas markets, many Chinese enterprises have launched into the overseas capital market in large numbers. But since the beginning of this year, the continuous devaluation of the RMB has made these enterprises pay a heavy price for this.

People pointed out that the continued depreciation of the renminbi, like a sharp arrow, pierced the Achilles heel of these industry giants sharply and rapidly.

Serious loss of foreign exchange in some enterprises

In the interview, the reporter learned that many semi annual reports of foreign-related enterprises showed losses caused by exchange rate fluctuations, and they lost hundreds of thousands of yuan and lost hundreds of millions of dollars.

Li Daxiao, chief economist of the British Securities Research Institute (micro-blog), told the China enterprise daily that "the loss of foreign exchange in larger enterprises, such as aviation, shipping, steel and export, will be very serious."

The semi annual report issued by China International Airlines (hereinafter referred to as "Air China") showed that in the first half of the year, the company's operating income was about 49 billion 100 million yuan, an increase of 7.11% over the same period last year, while the net profit attributable to shareholders of listed companies was 57% lower than that of the same period last year, with a net loss of 721 million yuan.

China Southern Airlines (2.85, 0.03, 1.06%) Company (hereinafter referred to as "China Southern Airlines") is not optimistic.

Data showed that the exchange loss of China Southern Airlines [micro-blog] was 1 billion 52 million yuan in the first half of this year, compared with 1 billion 435 million yuan in the same period last year.

As the leader of China's steel industry, the exchange losses in the first half of the year were as high as 270 million yuan, compared with 470 million yuan in the same period last year.

In addition, the larger proportion of trade enterprises is also seriously damaged.

According to CICC analysis, Xiamen Jian FA shares (6.07,0.05, 0.83%) increased 2014 in the first half of the year, and the net profit fell by 5.3% compared to the same period last year, mainly due to the loss of foreign exchange losses. (8.5%)

Large foreign currency interest bearing debt is the main cause.

Insiders pointed out that these companies with huge losses in foreign exchange have a common feature, that is, these enterprises have large foreign currency interest bearing debt, and the proportion of US dollar debt is very high.

It is reported that the liabilities of Baosteel, China Southern Airlines and Air China have exceeded 70% of the total foreign currency interest bearing debts, while Eastern Airlines has reached 96.2%.

Over the past ten years, China's three largest state-owned airlines have been benefited from the steady appreciation of the Renminbi for a long time.

Data show that since the beginning of this year, the RMB has depreciated more than 1% against the US dollar. In April 30th, the renminbi reached a minimum of 6.2676 in two years.

Insiders pointed out that the impact of RMB exchange rate fluctuations on domestic airlines is particularly obvious.

On the one hand, most of its revenues come from the domestic market, but on the other hand, most of the debts of fuel and aircraft purchases are priced in US dollars.

Since 2005, the RMB has entered the appreciation channel against the US dollar. Baosteel has gradually replaced RMB financing with us dollar financing with relatively low interest rate and controllable exchange rate risk.

The company's current interest liabilities are below RMB 55 billion yuan, of which the US dollar debt ratio has exceeded 70%.

Real estate companies have also suffered a great deal of pressure because of the depreciation of the renminbi.

It is understood that due to the mainland property market cooling, industry risk exposure, developers increasingly difficult to obtain funds through traditional financing channels, overseas capital market has become the choice of more and more developers.

Wu Xiaoxuan, CEO of Greater China in Yunnan nuclear variable Financial Education Consulting Co., Ltd., in an interview with the China enterprise daily, said that because some enterprises, especially airlines, had large amounts of US dollar debt, the appreciation of the renminbi meant that they had less and less money, and the exchange losses would be caused by the acceleration of the internationalization process of the people's currency, the devaluation of the exchange rate and the two-way fluctuation.

Experts: we should focus on the construction of wind control departments.

Reporters learned in the interview that exchange loss is an industry phenomenon, but there are also special cases.

Some companies that have responded swiftly to exchange rate fluctuations are not only suffering from exchange losses but rather profitable.

According to media reports, the exchange rate of the US group (20.40, 0.15, 0.74%) reached 223 million yuan in the first half of the year because of the establishment of a wind control department specializing in foreign exchange hedging.

Wu Xiaoxuan believes that the dilemma faced by enterprises is the two-way fluctuation of RMB. Enterprises should strengthen the construction of wind control departments and learn from the industry.

The main reason is that many enterprises fail to realize the importance of building wind control departments.

Another industry pointed out that in addition to the operation of the technology level, the State Administration of foreign exchange and the central bank [micro-blog] should consider how to develop and improve our foreign exchange and financial derivatives market from a global perspective.

It is understood that before 2009, China's airlines can participate in the futures hedging pactions of aviation oil to hedge against the adverse effects of devaluation.

However, since the Singapore Airlines Company participated in hedging pactions in 2009 and caused huge losses, regulators began to strictly control airlines' participation in similar pactions.

Industry experts believe that China, the world's largest trading entity and the world's second largest economy, should be in line with the world's largest daily trading market and financial derivatives market.

Another industry believes that the depreciation of the RMB exchange rate losses, enterprises should do everything possible to deal with.

Chen Zhanyun, vice president of Shanghai Investment Association, believes that enterprises should first predict what the RMB exchange rate will be in the next six months. If we continue to depreciate, we can take some financial instruments, such as options and so on, so that when the RMB depreciates, we can take corresponding measures. Secondly, we should adjust our structure, such as pferring some less profitable businesses to China. Finally, we should do a good job in strategic research, consider recent goals, phased goals and future long-term goals, and try to improve the competitiveness of enterprises.

Li Daxiao suggested that for more foreign exchange enterprises, hedge should be hedged to balance risks.