China Equity Strategy:Featuring PPP Part 4,An inflection point after three-year high growth

类别:投资策略 机构:德意志银行 研究员:Michael Tong,Luka Zhu 日期:2017-11-30

We resume our PPP thematic series reports focusing on recently announcedtightening regulations on PPP projects. After three years of rapid PPPdevelopment, the government has become increasingly concerned that localgovernments may misuse PPP as a disguised borrowing vehicle to circumventpolicy restrictions. Since May, Ministry of Finance (MOF) has announced threemajor notices in order to strengthen PPP project controls (Documents No. 50,87 and 92). Document 92, announced last Friday, is a more concrete guidelinefor removing unqualified projects from PPP database, which has been on acontinuous uptrend since 2014. Although we expect modest impact on FAIoutlook in 2018 due to the small percentage of reduced investment within totalFAI, the growing PPP momentum is set to face an inflection point. We providea list of companies with significant PPP order exposure (>Rmb7bn).

    On 16 November, MOF issued Regulating Public-Private Partnership (PPP)Integrated Information Platform (Document No. 92). The Notice urges financedepartments at all levels to exert scrutiny on PPP projects from the databaselist, i.e. tightening the standards of new projects and cleaning up unqualifiedexisting projects by March 2018. Three key regulations are highlighted below.

    1) The payment linked to results appraisal should not be less than 30% of thetotal project cost, which is to prevent social capital from earning excessiveprofits at the construction stage but bearing little responsibility at theoperation stage. This means lengthened payment terms for PPP projectparticipants and the amount of payment will be more closely linked tooperation performance, rather than construction status.

    2) The project’s “two assessment” (value for money and fiscal affordability)should be conducted properly with full procedures; the upper limit of 10%local government general fiscal expenditure cannot be exceeded.

    3) The government is prohibited to provide illegal debt guarantee to socialcapital, including the pledge to repurchase principal and compensate loss,fixed-rate-return guarantee and any form of guarantee for the project debt.

    This is to prevent PPP turning into another debt burden after LGFV debts.

    We also highlight a few other regulations targeting tighter controls on PPPproject eligibility and financing, including Jiangsu government’s localguideline, SASAS’s notice on SOE’s PPP risk control and the draft for guidelineon asset management businesses (investment funds as key PPP stakeholders).

    According to the latest data release from the MoF, total planned PPPinvestment increased Rmb1.4tr to Rmb17.8tr by 3Q17. Quarterly landing ratereached a new high at 35.2% in 3Q17. Total investment of landed PPP projectsin 8M17 represents 3.9% of total FAI in China. We also see an increase inquarterly delisted projects from database and a slowdown of net newly listedprojects in database, mainly due to stricter regulations. Meanwhile, MoF ismulling the fourth batch of demonstration projects focusing on ruralconstruction and ecological environment, which should be announced soon.



云南白药 买入 84.36 研报
长安汽车 买入 10.74 研报
金溢科技 中性 -- 研报
汇纳科技 买入 -- 研报
齐翔腾达 持有 -- 研报
科大讯飞 持有 42.34 研报
贵州茅台 中性 -- 研报
中青旅 买入 -- 研报
元祖股份 中性 -- 研报
桃李面包 中性 -- 研报
绝味食品 中性 -- 研报


云南白药 1.75 2.18 研报
长安汽车 0.45 0.25 研报
金溢科技 0 0 研报
汇纳科技 0 0 研报
齐翔腾达 1.54 0.80 研报
科大讯飞 0.60 0.55 研报
中青旅 0.72 0.79 研报
养元饮品 0 0 研报
桃李面包 0 0 研报
大北农 1.23 0.96 研报
汤臣倍健 1.73 1.40 研报


五粮液 35 持有 中性
万科A 31 买入 买入
泸州老窖 31 持有 中性
隆基股份 30 买入 买入
比亚迪 29 持有 持有
三一重工 28 持有 买入
长安汽车 28 买入 买入
伊利股份 27 持有 持有
中国国旅 27 持有 买入
宋城演艺 27 持有 买入
中信证券 26 持有 买入
万华化学 26 买入 买入
瀚蓝环境 26 持有 买入
格力电器 26 买入 买入
恒生电子 25 买入 买入
中国太保 25 持有 买入
亿纬锂能 25 持有 买入


电子信息 492 84 280
汽车制造 357 36 186
建筑建材 346 45 183
电子器件 339 49 219
金融行业 296 26 141
机械行业 292 44 114
酿酒行业 247 16 134
化工行业 242 45 104
生物制药 242 44 153
交通运输 220 26 106
钢铁行业 213 28 110
房地产 200 28 131
食品行业 188 25 66
家电行业 185 14 117
煤炭行业 184 31 83
商业百货 170 33 97
酒店旅游 152 19 50