China Equity Strategy:SOE Reform Part 1–A cross-sectoral review

类别:投资策略 机构:德意志银行 研究员:Michael Tong,Luka Zhu 日期:2017-12-04

SOE reform: why, when, how and who.

    Since SOE reform was brought up as a key priority at the third plenum in 2013,a string of policy guidelines has been released with several groundbreakingcases announced across sectors and in various forms, including mixedownership and mergers among central SOEs. After the conclusion of the 19thParty Congress, we believe SOE reform will accelerate further in 2018-19. Inour first report on the SOE reform-related investment theme, we focus on thecontext, objectives, guidelines, progress, case studies and implications.

    Moreover, we have identified a basket of 20 stocks as likely beneficiaries ofthe SOE reform to be implemented.

    SOE reform: objectives, guidelines, features and progress.

    The key objective of SOE reform is to improve the capital efficiency andproductivity of SOEs, through multiple functional targets such as diversifyingthe shareholder base, improving corporate governance, breaking monopolies,expediting supply-side reform and enhancing competitiveness. Despite thepivotal role played by SOEs, there is significant room for SOEs to catch up withPOEs (privately owned enterprises) in many aspects. The government has setup the reform agenda and a “1+N” policy framework, and a number ofgroundbreaking deals have been announced. Compared to previous reforms,we see three main differences in terms of macro backdrop, method and scope.

    SOE reform is gathering pace at both central and local levels. The third-batchmixed ownership reform list is likely to be announced soon.

    SOE reform: key modes and case studies.

    We have recapped over a dozen SOE reform cases across the telecom, power,coal, energy, airline, shipping, metal, consumer, and industrial sectors since2013. Among these, the main modes adopted are mergers between centralSOE groups and mixed ownership reform at group/subsidiary levels with threesub-types of mixture method. We have also reviewed cases that took the formof asset injections, non-core asset disposals, employee share ownership plans(ESOP), and debt-to-equity swaps.

    SOE reform: preliminary observations on benefits.

    Although it is still too early to draw any conclusions on overall effectiveness,some qualitative arguments of the potential positive impacts can be outlined.

    So far, the reform has led to scale benefits, better pricing power, reducedovercapacity, cost synergy, enhanced operating efficiency, and rising marketliberalization. Nevertheless, there have been a few cases that either did not gothrough or which failed to win the support of minority shareholders.

    Identifying SOE reform plays.

    We highlight a basket of 20 stocks that could be beneficiaries of the SOEreform to be implemented in the near term. They span various sectorsincluding utility, energy, materials, industry, telecom, transportation, autos andhealthcare. Their SOE reform is likely to take the form of: 1) mergers (HuadianPower, Huadian Fuxin, China Power Int’l, Datang Power, Chang’an Auto,Harbin Electric, CNBM); 2) mixed ownership with new shareholders (ChinaUnicom, PetroChina, Sinopec, China Eastern Airline); 3) parentco assetinjections (AviChina, Sinopec Kanton, Guangshen Railway, Longyuan Power,Angang Steel); 4) ESOP (Sinopec Engineering); or 5) non-core asset disposal(Universal Medical). In addition, as SOEs account for 56% of total corporateloans, big banks can also benefit via SOEs’ enhanced debt servicing capability.

    Thus, we also include CCB in our SOE reform basket.



华体科技 买入 -- 研报
剑桥科技 持有 -- 研报
烽火通信 买入 -- 研报
亿联网络 买入 -- 研报
移为通信 持有 -- 研报
红相股份 持有 -- 研报
光环新网 持有 -- 研报
中际旭创 持有 -- 研报
海能达 买入 -- 研报
海格通信 持有 -- 研报
沪电股份 买入 -- 研报


老凤祥 1.16 1.29 研报
周大生 0 0 研报
开润股份 0 0 研报
珀莱雅 0 0 研报
上海家化 0.90 1.22 研报
跨境通 0.96 0.82 研报
银座股份 0.56 0.50 研报
新华百货 1.24 1.33 研报
南极电商 0.74 0 研报
欧亚集团 1.01 1.24 研报
大东方 0.48 0.34 研报


中信证券 34 持有 持有
贵州茅台 32 持有 买入
隆基股份 32 买入 持有
华泰证券 32 持有 持有
伊利股份 31 持有 买入
万科A 30 买入 买入
格力电器 30 持有 买入
五粮液 30 持有 买入
上汽集团 29 持有 买入
通威股份 28 买入 持有
泸州老窖 28 持有 持有
三一重工 27 持有 持有
美的集团 27 持有 中性
中信证券 26 持有 持有
中国国旅 25 持有 持有
华能国际 24 持有 持有
当升科技 24 持有 持有


电子信息 586 79 299
汽车制造 510 37 293
建筑建材 432 53 211
金融行业 430 28 192
电子器件 410 55 234
钢铁行业 371 29 166
化工行业 366 61 112
机械行业 319 41 107
生物制药 304 49 143
房地产 282 31 202
家电行业 275 11 132
酿酒行业 258 15 110
煤炭行业 241 23 103
有色金属 230 48 75
服装鞋类 230 18 110
食品行业 201 23 68
酒店旅游 194 20 56