. Shanghai Clearing House supports financing for small and medium-sized enterprises
Shanghai Clearing House is the financial infrastructure , and it is its responsibility to fully support the development of the real economy. At present, the Shanghai Clearing House has registered a total of 14.7 trillion yuan in credit bonds for custodial companies, accounting for nearly half of the market. In terms of business expansion, the Shanghai Clearing House pays special attention to the development and promotion of bond products directly for small and medium-sized enterprise collective notes, science and technology innovation enterprise collective short-term financing bonds, , and special bonds that financial institutions specifically support small and medium-sized enterprises, rural revitalization, etc., to help the bond market accurately support weak links and key areas of the real economy. In terms of supporting mechanism construction, Shanghai Clearing House has leveraged the advantages of unified custody of multiple products, supported the simultaneous creation of bond financing support tools for private enterprises, increased credit for private enterprises, promoted their bond issuance, and effectively alleviated financing difficulties and expensive financing in a market-oriented manner. Since 2018, the Shanghai Clearing House has used this tool to serve more than 230 companies and successfully issued more than 250 billion yuan of bonds.
In the field of centralized clearing business, Shanghai Clearing House aims at the commodity market and targets the market. In response to the difficulties and pain points such as fund security, counterparty risks, and cross-bank settlements that physical enterprises have long faced in the settlement process of spot commodity trading, we will actively give full play to their professional and centralized advantages in managing capital flows and settlement risks, and explore the multi-dimensional expansion of professional clearing services to a wider range of physical enterprise participants. In 2021, the commodity clearing service launched for the market is one of the typical cases. Since the launch of the business, it has successively connected with a number of compliant and high-quality platforms, serving nearly 3,100 physical enterprises, of which about 9 have become small and medium-sized enterprises, with a cumulative liquidation amount of nearly 560 billion yuan.
. Policies on supporting financing of small and medium-sized enterprises
(I) Ministry of Industry and Information Technology: Promote direct financing of small and medium-sized enterprises and strengthen innovation in bond market varieties
On July 6, 2022, the Ministry of Industry and Information Technology issued the "Plan for Promoting the Development of Small and Medium-sized Enterprises in the 14th Five-Year Plan". The "Plan" mentions that direct financing for small and medium-sized enterprises should be promoted. Steadily carry out pilot projects on regional equity market systems and business innovation, optimize the market-oriented financing mechanism and merger and acquisition restructuring mechanism of the New Third Board, and continuously optimize the listing conditions of enterprises. Improve and give full play to the functions and roles of the three stock exchanges in Shanghai, Shenzhen and Beijing, and broaden the financing channels for listing of high-quality small and medium-sized enterprises.
Organize and cultivate high-quality small and medium-sized enterprises to list, encourage local governments to increase support for enterprises that upgrade to small and standardized, to convert stocks into stocks, and to promote qualified enterprises to connect with the capital market. Strengthen innovation in bond market varieties, steadily promote corporate credit bonds in the field of innovation and entrepreneurship, and improve the credit enhancement mechanism for small and medium-sized enterprise bond financing. Organize and carry out investment and financing docking for small and medium-sized enterprises and roadshows for projects, give full play to the guiding role of government investment fund , etc., and promote social capital to expand the scale of direct investment in high-quality small and medium-sized enterprises.
(II) Shanghai encourages private enterprises to issue credit bonds
Shanghai supports key industrial enterprises to accelerate the upgrading and development and encourages private enterprises to issue credit bonds.
On September 28, 2022, the Shanghai Municipal People's Government issued the "Several Policy Measures in Shanghai to Help the Industry Strengthen the Position and Stabilize Growth" (hereinafter referred to as the "Several Measures"). Based on the "Several Measures in Shanghai to Make All-out Anti-epidemic and Help Enterprises Promote Development" and the "Shanghai Action Plan for Accelerating Economic Recovery and Revitalization", several policy measures in Shanghai to help the industry strengthen the Position and Stabilize Growth. The "Several Measures" mentioned that Shanghai will support key industrial enterprises to accelerate the upgrading and development and support the listing of high-quality enterprises. The upper limit for support for major technological transformation projects in key industries that meet the conditions will be increased to 100 million yuan, and interest subsidies will be provided for the industrial park's "second to second" development loan. The deduction ratio for industries that currently deduct R&D expenses before tax will be uniformly increased to 100% in the fourth quarter of 2022.
This time, the "Several Measures" pointed out that Shanghai will make good use of the national special re-lending and fiscal interest subsidy policies to support the renewal and transformation of equipment in the fourth quarter of 2022 by manufacturing, social services, small and medium-sized enterprises, individual industrial and commercial households, etc., and will also support the healthy development of private enterprises, promote the innovation of bond financing support tools for private enterprises, and encourage private enterprises to issue corporate credit bonds such as technology innovation corporate bonds, innovation and entrepreneurship corporate bonds.
"Several Measures" In supporting the listing of high-quality enterprises, Shanghai will encourage all districts to provide necessary support to enterprises newly included in the "Pujiang Light" science and technology enterprise database and entering the listing guidance period. All districts are encouraged to increase support for enterprises to go public at home and abroad, and reward those who successfully go public.
. Current status of corporate bond issuance in 2022
(I) Issuance overview
As of the end of June, a total of 280 corporate bonds were issued in 2022, with a total issuance scale of 216.677 billion yuan, an increase of 21.7% and a decrease of 1.0% respectively over the same period last year. During the same period, the issuance scale of exchange varieties decreased by 9.9% year-on-year, and the issuance scale of interbank varieties increased by by 35.2% year-on-year, mainly due to the significant increase in the issuance of medium-term notes. The total issuance scale of corporate bonds was RMB 216.677 billion, the total repayment scale was RMB 236.675 billion, and the net financing was RMB 19.998 billion, a decrease of RMB 12.86 billion from the same period last year, and the enthusiasm of corporate bond financing increased. In addition, five corporate bonds were cancelled in the first half of the year, with the original planned issuance scale of 3.45 billion yuan. In the second half of the year, the scale of repayment of enterprises was RMB 215.327 billion, down about RMB 20 billion from the first half of the year, basically the same as the same period last year.
From the perspective of regional distribution, from January to June 2022, there were 12 areas for net issuance. Among them, Zhejiang's net financing was 25.263 billion yuan, far higher than other provinces; Sichuan's net financing was 15.577 billion yuan, ranking second; Shandong, Hunan and Shanghai, the net financing scale was 8.6 billion yuan, 8.075 billion yuan and 7.95 billion yuan, respectively, and other provinces had net financing below 5 billion yuan. Another 15 provinces had negative net financing, of which Beijing's repayment scale exceeded 70 billion yuan, and only issued 700 million yuan; Guizhou's repayment scale was 11.032 billion yuan, and its net financing was 9.862 billion yuan, ranking second to the bottom. As of the end of June, Gansu, Inner Mongolia, Heilongjiang, Qinghai, Yunnan, Liaoning, Hebei, Hainan and Tianjin have not issued corporate bonds. Compared with the same period last year, 19 provinces increased their net financing in the first half of 2022, of which 16 provinces turned from negative to positive, Jiangsu, Hunan and Chongqing increased by more than 10 billion yuan, and Xinjiang, Liaoning and Anhui increased by more than 7 billion yuan; compared with the same period last year, 6 provinces turned from positive to negative, of which Hubei decreased by 6.5 billion yuan year-on-year, higher than other provinces; the other five provinces had negative net financing for both years.
(II) Net financing
Net financing for corporate bonds in the first half of the year was -19.998 billion yuan, a decrease of 12.86 billion yuan from the same period last year, and the popularity of corporate bond financing increased. In addition, five corporate bonds were cancelled in the first half of the year, with the original planned issuance scale of 3.45 billion yuan. In the second half of the year, the scale of corporate bonds to be repaid was RMB 215.327 billion, down about RMB 20 billion from the first half of the year, basically the same as the same period last year. From the perspective of regional distribution, there are 12 regions that achieve net issuance in the first half of 2022, of which Zhejiang had net financing of 25.263 billion yuan, far higher than other provinces; the other 15 provinces had negative net financing. Compared with the same period last year, 19 provinces had increased net financing in the first half of 2022, including Jiangsu, Hunan and Chongqing, which increased by more than 10 billion yuan.
As of the end of June, a total of 280 corporate bonds were issued in 2022, with a total issuance scale of 216.677 billion yuan, an increase of 21.7% and a decrease of 1.0% respectively over the same period last year. During the same period, the issuance scale of exchange varieties decreased by 9.9% year-on-year, and the issuance scale of interbank varieties increased by 5.2% year-on-year, mainly due to the significant increase in the issuance of medium-term notes. The fluctuation in the issuance scale of each month decreased compared with the previous year. Overall, the number of corporate bond issuance entities increased in the first half of 2022, and the scale of financing was basically the same as the same period last year, maintaining stability. The scale of corporate bonds accounts for 3.4% of the total credit bond market, basically the same as last year. The exchange market fell by 3 percentage points year-on-year to 26.3%, and the interbank market accounted for 70.3%. In the first half of the year, no substantial default occurred in the corporate bond market.
From the perspective of net financing, from January to June 2022, the total issuance scale of corporate bonds was 216.677 billion yuan, the total repayment scale was 236.675 billion yuan, and the net financing was -19.998 billion yuan, a decrease of 12.86 billion yuan from the same period last year, and the popularity of corporate bond financing increased. In addition, five corporate bonds were cancelled in the first half of the year, with the original planned issuance scale of 3.45 billion yuan. In the second half of the year, the scale of repayment of enterprises was RMB 215.327 billion, down about RMB 20 billion from the first half of the year, basically the same as the same period last year.
From the perspective of regional distribution, from January to June 2022, there were 12 areas for net issuance. Among them, Zhejiang's net financing was 25.263 billion yuan, far higher than other provinces; Sichuan's net financing was 15.577 billion yuan, ranking second; Shandong, Hunan and Shanghai, the net financing scale was 8.6 billion yuan, 8.075 billion yuan and 7.95 billion yuan, respectively, and other provinces had net financing below 5 billion yuan. Another 15 provinces had negative net financing, of which Beijing's repayment scale exceeded 70 billion yuan, and only issued 700 million yuan; Guizhou's repayment scale was 11.032 billion yuan, and its net financing was 9.862 billion yuan, ranking second to the bottom. As of the end of June, Gansu, Inner Mongolia, Heilongjiang, Qinghai, Yunnan, Liaoning, Hebei, Hainan and Tianjin have not issued corporate bonds. Compared with the same period last year, 19 provinces increased their net financing in the first half of 2022, of which 16 provinces turned from negative to positive, Jiangsu, Hunan and Chongqing increased by more than 10 billion yuan, and Xinjiang, Liaoning and Anhui increased by more than 7 billion yuan; compared with the same period last year, 6 provinces turned from positive to negative, of which Hubei decreased by 6.5 billion yuan year-on-year, higher than other provinces; the other five provinces had negative net financing for both years.
(III) Market Analysis
. Zhejiang's issuance scale in the first half of the year, and the issuance scale in Chongqing, Hunan and Anhui has increased significantly year-on-year. Sichuan and Zhejiang have maintained high levels for two consecutive years. From January to June 2022, a total of 20 provinces issued corporate bonds, with a relatively high issuance concentration. Among them, Zhejiang issued 36.55 billion yuan, accounting for 16.9%; followed by Sichuan, with issuance of 22.88 billion yuan, accounting for 11.5%; Hunan, Jiangsu and Shandong issued 23.227 billion yuan, 21.19 billion yuan and 19.01 billion yuan, respectively, and the total issuance scale of the top five provinces accounted for 57.6%. Compared with the same period last year, the issuance scale of 12 provinces increased year-on-year. Among them, Xinjiang, Jilin and Chongqing increased by 920%, 488.2% and 110.7% respectively due to low base issuance scales, followed by Hunan and Anhui, with year-on-year growth of 70.9% and 68.9% respectively. In addition, Shanxi and Guizhou, which were not issued last year, were successively issued this year. Compared with the same period last year, the issuance scale of 11 provinces decreased year-on-year, among which Beijing, Guangdong and Fujian decreased by 84.4%, 57.0% and 49.8%, respectively, with a significant decline. Judging from the changes in the proportion, the proportion of issuance scale in Hunan, Jiangsu, Shandong, Shanghai, Sichuan and Zhejiang in the first half of 2021 and the first half of 2022 has increased significantly, especially in Sichuan and Zhejiang.
. The proportion of 7-year scale in the first half of the year increased year-on-year, while the proportion of short-term and long-term varieties decreased
From January to June 2022, the term of corporate bonds was distributed among 7-year and other term varieties. Among them, 203 7-year varieties were issued, accounting for 72.5%, with an issuance scale of 137.3 billion yuan, accounting for 63.4%; 43 5-year varieties were issued, accounting for 15.4%, with an issuance scale of 44.33 billion yuan, accounting for 20.5%. Compared with the same period last year, the three-year varieties fell by 5.2 percentage points, the proportion of the 7-year varieties increased by 7.4 percentage points, and the proportion of the long-term varieties for more than 7 years has decreased. The main reason is that the number of corporate bond issuances in urbanization construction has increased, and it is mainly 7 years.
, the proportion of high-level bonds and other entities in the first half of the year both increased
The credit rating of corporate bonds issued from January to June 2022 is mainly AA+ and above. The number of high-level varieties with AA+ and above accounts for 92.5%, an increase of 1.63 percentage points from the previous year, mainly due to the increase in the credit increase ratio.
From the perspective of issuance entity level, from January to June 2022, the issuer of corporate bonds was mainly AA+ and above, accounting for 48.3%, an increase of 2.8 percentage points from the same period last year. Specifically, there are 34 AAA-level entities, accounting for 14.2%; 82 AA+-level entities, accounting for 34.2%; 114 AA-level entities, accounting for 47.5%; and 9 AA-level entities, accounting for 3.75%.
, corporate bond interest rates at AA+ and above levels interest rate spreads slightly decreased, and the interest rate spreads of 3-year AAA and 7-year AA+ grades were relatively low
From January to June 2022, the issuance rate and interest rate spreads of corporate bonds without credit enhancement were significantly different. Among them, the volatility range of interest rate spreads of AAA bonds has increased, showing a slight decline; the interest rate spread of AA+ bonds has been relatively stable, with a slight decline; the volatility range of AA bond issuance interest rates has increased, maintaining the upward trend in the second half of the previous year.
installment period, bond spreads with different periods of the same credit rating show different characteristics, and the 3-year AAA-level and 7-year AA+ level spreads are relatively low at all levels.
5. The credit increase ratio of corporate bonds in the first half of the year was 50%, an increase of 6.5 percentage points from the same period last year; the guarantee ratio of professional guarantee companies increased by 8.1 percentage points, with high concentration; credit enhancement may be extended bond issuance maturity
From January to June 2022, there were 141 bonds with credit enhancement in corporate bonds, accounting for 50.4%, an increase of 6.5 percentage points from the same period last year, mainly due to the increase in the credit enhancement ratio of AA+-level entities. By subject level, the proportion of bonds selected for credit-enhancing issuance among AA+-level entities was 27.3%, an increase of 16.9 percentage points from the previous year; the proportion of bonds selected for credit-enhancing issuance among AA-level entities was 83.9%, an increase of 3 percentage points from the previous year. By month, the proportion of credit enhancement in the first half of 2022 showed a significant upward trend, and the proportion of credit enhancement in the AA-level credit enhancement to the AAA-level increased by 5.5 percentage points compared with the same period last year.
From the perspective of the type of guaranteed guarantor, the guarantee ratio of professional companies in the first half of 2022 was 84.7%, an increase of 8.1 percentage points over the same period last year. Specifically, in 2021, 30 professional guarantee companies have participated in the corporate bond market, with 24 AAA-level companies, including Jiangxi Credit Financing Guarantee Group Co., Ltd. and Jiangxi Financing Guarantee Group Co., Ltd. has been upgraded from AA+ to AAA after the capital increase in 2022. Judging from the scale of new corporate bond guarantees in 2022, a total of 22 guarantee institutions participated in the corporate bond market in the first half of the year. Among them, Jiangsu Credit Re-guarantee Group Co., Ltd., China Investment and Financing Guarantee Co., Ltd. and Hubei Financing Guarantee Group Co., Ltd. ranked in the top three, followed by Anhui Credit Financing Guarantee Group Co., Ltd. and Chongqing Sanxia Financing Guarantee Group Co., Ltd., with the guarantee scale of the top five professional guarantee institutions accounting for 60%.
Compared with the whole year of last year, the guarantee scale of professional guarantee institutions in the first half of 2022 was 73% of that in 2021. Among them, 8 companies have added guarantees this year to 100% or more of the previous year.
AAAA-level entities mostly choose to issue 3 years and 5 years (here is the term before when the date of exercise, the same below); AA+-level entities mostly choose to issue directly, but the proportion of choice of guarantees has increased since 2022, and the proportion of 3 years and 5 years has increased in terms of term, and the proportion of 7 years has increased in terms of term, since 2022; AA-level entities mostly choose to increase credit to AAA, with a term of 7 years and 5 years has increased in terms of term. Compared with uncreditated bonds, the issuance period of bonds after credit enhancement has been extended.
6. In the first half of the year, 89 innovative varieties were issued, and the issuance of corporate bonds for urbanization construction and small and micro credit-enhancing collective bonds increased significantly; the issuance of corporate bonds for urbanization construction dropped, and the proportion of credit-enhancing declined
From January to June 2022, a total of 89 innovative corporate bonds were issued, with a total scale of 65.43 billion yuan. First, the National Development and Reform Commission’s special corporate bonds are still the main innovative varieties, with the issuance scale reaching 64% of the whole year last year. Among them, urbanization construction enterprise bonds are the main varieties, with a total of 32 issued, with an issuance scale of 21.79 billion yuan. Since its implementation in 2021, the issuance progress in 2022 has been significantly improved; 12 parking lot special bonds were issued, with an issuance scale of 7.64 billion yuan, only 26.7% of the total issuance scale of the previous year; in addition, Double Innovation incubation special bonds and pension industry special line bonds have not been issued this year. Second, green bonds are the second largest variety, with 16 issuances and 13.98 billion yuan, which is 35% of the whole year of the previous year. Third, 13 collective bonds for credit enhancement of small and micro enterprises were issued this year, with an issuance scale of 9.7 billion yuan, exceeding the whole year of the previous year.Overall, in response to the policies of "revitalizing rural areas" and "supporting financing for small and medium-sized enterprises", the issuance scale of new urbanization enterprise bonds and small and micro credit-enhancing collective bonds has increased significantly this year.
From the perspective of the subject level, 48.9% of innovative varieties issued in the first half of the year were AA+ and above, an increase of 4.3 percentage points over the previous year, mainly because the proportion of AA+ levels increased by 13.9 percentage points to 40%. From the perspective of credit enhancement ratio, the AA+-level entities have a credit increase of 22.2%, 5.1 percentage points lower than the AA+-level credit increase ratio in the entire market; the AA-level entities have a credit increase ratio of 82.2%, 1.7 percentage points lower than the AA-level credit increase ratio in the entire market. Mainly, the issuance of bonds in urbanized enterprises is low, and the proportion of credit enhancement among new bonds this year has dropped significantly. Compared with the same period last year, the credit enhancement ratio of AA and AA+ entities has increased.
7. In the first half of the year, corporate bonds were mainly used for industrial parks and housing projects. borrowed new and old , focusing on new urbanization construction field
From January to June 2022, the funds raised by corporate bonds were mainly used for industrial parks and housing projects, and the scale was much larger than other fields. Secondly, borrowed new and old, parking lots, and rail transit are the second largest sectors. Among them, because the scale of rail transit and parking lots are large, bond issuance overall has the characteristics of "not large in quantity, but large in scale". Compared with the same period last year, small and micro enterprises have seen significant growth in transfer loans, logistics-related, agriculture-related, and industrial parks; secondly, borrowing new and repaying old and cultural tourism and sports fields have also seen significant growth; while rail transit, parking lots, and comprehensive pipeline corridors have seen significant declines. In addition, since 2020, the recent increase in bonds invested in rental housing has been increased, mainly related projects in Shanghai.
It can be seen that the investment direction of corporate bonds is consistent with policy guidance. It is currently concentrated in the field of new urbanization construction, mainly in the fields of industrial cultivation, commercial development, support for small and medium-sized enterprises, and rural agricultural support.
Chart 1: List of companies successfully issuing corporate bonds
. Financial analysis of companies successfully issuing bonds
May 2022 Baosteel The bonds of shares are the first low-carbon transformation green corporate bond in the country. The issuance scale is 500 million yuan, the issuance period is 3 years, and the issuance rate is 2.68%
In order to help enterprises prepare the conditions for issuance of bonds and formulate reasonable bond issuance strategies and plans, we selected the financial indicators related to credit bonds of Baoshan Iron and Steel Co., Ltd. for analysis for reference for companies that intend to issue corporate bonds.
(I) Historical repayment of interest-bearing liabilities and surplus
Based on the company's financial status and profitability in the past three quarters, the amount of interest-bearing liabilities that the company is able to repay is: RMB 8790,17774 million in the first quarter of 2022, and RMB 8,416,971.0 in the fourth quarter of 2021. 10,000 yuan, 8405,1247,600 yuan in the third quarter of 2021, and the interest-bearing scale that needs to be repaid for each period is: 4503,743,080 yuan in the first quarter of 2022, 4503,729,510 yuan in the fourth quarter of 2021, and 3618,114,410 yuan in the third quarter of 2021. It can be seen that the company's profits in the past three quarters can all repay the interest-bearing liabilities that need to be repaid in the current period, and there is a surplus.
Chart 2: Repayment of interest-bearing liabilities
(II) The profit margin based on sales revenue is stable
Baoshan Iron and Steel Co., Ltd.'s gross sales profit margin in the first quarter of 2022 was 9.88%, sales profit margin was 6.15%, and net sales profit margin was 5.06%. Compared with the same period last year, the gross sales profit margin, sales profit margin and net sales profit margin have not changed much, indicating that the company's profit level is relatively stable and no major changes have occurred.
Chart 3: Changes in sales gross profit margin, sales profit margin and net sales profit margin
(III) Operating income growth rate has increased
Overall, Baoshan Iron and Steel Co., Ltd.'s operating income has shown a continuous growth trend in the past three years, but the growth rate in the first quarter of 2022 was slower than the growth rate in the first quarter of 2021. Among them, the operating income growth rate in the first quarter of 2022 was 3.85%, a decrease of 34.22% compared with the same period last year, indicating that the company's market expansion ability has weakened compared with the same period last year and the product market share has decreased.
Chart 4: Operating income change chart
(IV) Investment income increased
Investment income in the first quarter of 2022 was 1142.7309 million yuan, a significant increase compared with 682.7728 million yuan in the first quarter of 2021, an increase of 67.37%. Enterprise investment income has shown a continuous upward trend in the past three years, and the increase was large that year.
Overall, although the investment income has increased significantly, the total amount of foreign investment has also increased significantly. Relatively speaking, the profitability of foreign investment business has not improved.
Chart 5: Investment income trend change chart
(V) The revenue revenue capacity of enterprises has improved
net cash flow for operating activities in Baoshan Iron and Steel Co., Ltd. in the first quarter of 2022 was 8898.7617 million yuan, a significant decrease from the same period last year, a decrease of 36.50%; the average total assets were 383,954.9102 million yuan, an increase of 6.94% over the same period last year. In the first quarter of 2022, the company's asset cash recovery rate was 2.32%, a decrease of 1.58% from the same period last year, and the company's capital management capabilities decreased.
In the first quarter of 2022, the company's operating income was RMB 86260.7252 million, and the cash received from selling goods and providing services was RMB 97037.1216 million. The ratio of the two was 112.49%, an increase of 4.48% over the same period last year, indicating that the revenue capacity of the company has improved.
Chart 6: Changes in revenue capacity of operating income
Chart 7: Changes in revenue capacity of company's operating income analysis and industry standard value comparison
To sum up, the company has the ability to repay short-term interest-bearing liabilities in 2021, and the source of profits based on surplus funds and sales revenue is relatively stable, investment income is on the growth trend, and there are good bond issuance conditions. After the bond issuance, the operating income growth rate has increased and the revenue capacity has improved. Therefore, after the company successfully issues corporate bonds in 2022, it will reduce the financing costs of the company while helping the company grow, thereby increasing the company's operating income.
