"Once In Five Years": A Game Of State Owned Assets In Shanghai Under The Second Mixed Reform Of Greenland

On the evening of July 20, Greenland Holding Group Co., Ltd. (600606. Sh, hereinafter referred to as "Greenland") announced that it had received the notice from the shareholders of Shanghai real estate (Group) Co., Ltd. and Shanghai Urban Investment (Group) Co., Ltd., and Shanghai real estate group and Shanghai urban investment group were planning matters related to their control structure. On the same day, Greenland holdings will suspend trading immediately after the market opening, and the suspension time is expected to be no more than 5 trading days (including July 20).

Green this sudden suspension event, is called "five years wait for a return". Five years ago, Greenland was listed on the back door as a pilot project of the mixed reform of the state owned assets supervision and Administration Commission of Shanghai; five years later, faced with the policy dividend of accelerating the reform of state-owned enterprises by the central government and stepping into the deep-water area of Shanghai's mixed reform of state-owned assets, Greenland has entered the second mixed reform stage again. Industry insiders believe that this can be seen as a key step in accelerating the mixed reform of state-owned assets in Shanghai. Through the secondary mixed reform of Greenland and the introduction of new war investment, the equity of Greenland will be more diversified. At the same time, Shanghai state-owned assets will release funds to promote the mixed reform of other state-owned enterprises.

In fact, although in the state-owned assets reform in the leading position in the country, Shanghai's state-owned assets reform model has been only Greenland. It can be said that the depth of the reform of Shanghai's state-owned enterprises is going on. Shanghai's state-owned assets move is to free up funds to make other state-owned assets mixed reform. The second is to accelerate the diversification of Greenland's equity, accelerate the liquidity of the capital market and improve the market value.

"We have to wait for the final plan of the SASAC." On the evening of July 20, 21st century economic report learned from reliable sources that SASAC had conducted a long-term research on green space.

In the past nearly a month (from the trading day on June 29 to the suspension on July 20), Greenland has increased by more than 40% due to rumors of applying for tax-free license. The announcement disclosed that the suspension time for five trading days, in other words, the earliest this Friday night, Greenland's new campaign investment will be unveiled. In the near future, it is possible for the central enterprises to apply for tax-free business license in combination with green space.

Green space has entered the second mixed reform stage again, which can be seen as a key step to accelerate the mixed reform of state-owned assets in Shanghai. Figure IC Photo

Second mixed reform bonus

In the second half of this year, the overall idea of the mixed reform of state-owned assets in Shanghai is to step into the deep-water area. In September last year, the implementation plan for Shanghai to carry out the comprehensive reform experiment of regional state-owned assets and state-owned enterprises was officially published, which clearly improved the state-owned assets management system and vigorously promoted the reform of mixed ownership.

From the perspective of central policy, the mixed reform has also entered a comprehensive deepening stage. The Third Plenary Session of the 18th Central Committee of the Communist Party of China clearly pointed out that "the state-owned capital, collective capital, non-public capital and other cross shareholding and integration". On July 16 this year, the office of the State Council of the people's Republic of China held a press conference on the economic operation of central enterprises in the first half of 2020. Peng Huagang, Secretary General of the state owned assets supervision and Administration Commission of the State Council and spokesman, elaborated on the changes in the economic operation of central enterprises and the future implementation plan with detailed data and clear action plans. According to reports, since May, the production and operation of state-owned enterprises have accelerated to improve. In the second half of the year, the goal of SASAC and SOEs is to strive for positive growth in the overall efficiency of SOEs. In addition, SASAC is further improving the three-year action plan for state-owned enterprise reform, and will implement the three-year action plan for state-owned enterprise reform in the second half of the year.

Since the reform and opening up, the reform of state-owned assets and state-owned enterprises has always been one of the central links of China's economic system reform, and has been widely concerned by all walks of life. Even today, the reform of state-owned assets and state-owned enterprises is still the core issue of China's economic and social reform and development.

State owned enterprises are not unique to China. In fact, there are state-owned enterprises all over the world, but the proportion is different. For example, public utility companies in many European countries are state-owned enterprises; Hannover, a German Convention and Exhibition giant, whose controlling shareholders are state and municipal governments; Temasek, controlled by Singapore's Ministry of finance, manages Singapore's huge state-owned capital. Even the United States, after the 2008 financial crisis, has become the controlling shareholder of American International, Citigroup, general motors, Fannie Mae and Freddie Mac.

The above-mentioned people further said that as the first sample of mixed reform in Shanghai, the release of dividend of mixed reform policy is undoubtedly a great benefit to Greenland. As early as 1997, Greenland Group successfully completed the restructuring according to the requirements of modern enterprise system, forming the equity structure of state-owned holding and employee holding. In 2015, Greenland completed the first mixed reform and went public smoothly. The "state-owned capital" is transformed into "state-owned capital" and "state-owned enterprises". At the same time, five strategic investors including Ping An and CDH were introduced, and social funds of 11.73 billion yuan were introduced.

Zhang Yuliang, chairman and President of Greenland, once said that it is best to form a "Golden Triangle" equity structure of state-owned capital, social capital and employee stock ownership. At present, in the equity structure of Greenland, Shanghai Greenland, the employee shareholder representative headed by Zhang Yuliang's management, holds 3.545 billion shares of Greenland, accounting for 29.13%; as of the first quarter of 2020, Shanghai Real Estate Co., Ltd. holds 3.142 billion shares of Greenland holding, accounting for 25.82%, which is the second largest shareholder of Greenland holding; Shanghai urban investment holding 2.5 billion shares, accounting for 20.55%, is the third largest shareholder More than 46% of the total equity. The remaining social capital held 2.98 billion shares of Greenland, accounting for 24.5%. Such a shareholding ratio is also in line with the state's existing regulations, that is, the total amount of employee shareholding is not higher than 30% of the company's total share capital in principle.

The market value of green land will rise

Zhang Yuliang once pointed out that the core of the mixed reform of state-owned assets is the shareholding ratio of state-owned capital. He believes that it is better to reduce the shareholding ratio of state-owned capital to less than 51%, that is, the state-owned capital no longer holds absolute control, so as to maintain a considerable proportion of social capital and employee stock ownership. Otherwise, it is easy to "dominate by one share", which is not conducive to the long-term development of enterprises. Before the introduction of state-owned assets, such as green space, the introduction of the strategic layout of Shanghai, and the rapid completion of a business card.

This is an effective imitation of local state-owned enterprises. Greenland has also taken the opportunity to participate in the mixed reform of state-owned assets of many central enterprises and local infrastructure enterprises. In recent years, Greenland has invested in the original Baosteel construction, Guizhou construction engineering, Jiangsu provincial construction, Tianjin Construction Engineering, Xi'an construction engineering, Henan highway engineering company, as well as state-owned enterprises such as China Eastern Airlines Logistics Co., Ltd. and Shanghai Airlines International Travel Service Co., Ltd.

As a leader in the reform of state-owned assets in China, many local governments are still in the first stage of exploring the mixed reform of state-owned assets. At present, Shanghai's state-owned assets have entered the second stage. The above-mentioned core source points out that it is reasonable to choose Greenland, an enterprise that has completed the first stage of mixed transformation, to carry out the second mixed reform.

As we all know, the slow pace of mixed reform of local state-owned assets is mainly due to the lack of capital promotion. Therefore, it is the only choice for local state-owned assets to obtain capital injection through the introduction of war investment. Just like five years ago, Greenland introduced Ping'an and other war investment, and obtained 10 billion funds to promote the national strategic layout. After five years of listing, the company will enjoy the new dividend. With the addition of new war investment, the shareholder structure of Greenland has changed, and the original board seat of state-owned assets may also change. This is perhaps the most concerned thing in the capital market.

An executive of the top ten enterprises in the real estate industry pointed out from an onlooker's point of view that the mixed reform of state-owned assets needs to go through the property rights exchange procedure, unless it is a transfer; if not, the shares of Greenland held by Shanghai state-owned assets must be listed on the local property exchange. Therefore, the final introduction of one or two war investment, as well as the proportion of Shanghai state-owned assets transfer of equity, can only wait for the announcement.

A question that stands in front of investors of green space is how much space does the market value of green space have? Since its listing, the market value of Greenland has been falling all the way; recently, due to the rise of stock price, the market value of Greenland has increased to nearly 100 billion yuan. The second round of tax-free license and tax-free tax-free applications are expected to stimulate investors. However, some investors who have been observing Greenland for a long time pointed out that once the board seat changes in the secondary mixed reform, the subsequent trend of Greenland's share price is still unknown.

According to the above-mentioned core sources, a small amount of equity transfer is not enough to cause the suspension of Greenland for a week, and the absolute controlling right of Shanghai state-owned assets will not change. Therefore, it is most likely that Shanghai state-owned assets will transfer part of their shares and introduce 1-2 war investment companies to "achieve win-win situation for all parties at the minimum equity cost".

The fact can be seen is that the half year report performance express released on July 21 shows that the contract sales amount of Greenland in the first half of the year is 133 billion yuan, which is still a certain gap compared with 167.7 billion yuan in the same period of 2019. However, Greenland has continued to make efforts in the first half of the year, with a collection rate of 125.7 billion yuan, which has reached 95%, an increase of nearly 15% over the same period of last year. Compared with the same period last year, the collection rate was only 79%, and the cash utilization rate was effectively improved.

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