中国上市公司盈利能力研究(1)

ProfitabilityofChineselistedcompanies1ProjectexecutivesDongTaoWuBolingShiZhengfuProjectcoordinatorLuWenyingProjectMembersCreditSuisseFirstBostonDongTaoSheilaYipFudanUniversityWuBolingShiZhengfuYangMingqiuDongHongleiAbstractTheaimofthisprojectistolookintotheprofitabilityofA-shares,B-shares,H-sharesandRedChipsintheperiodof1995~2001.Wechosereturnonequityandnetincomemarginasproxiesforprofitability.WecomparetheresultsfromChineselistedcompanieswiththosefromtheUS,EuropeandJapan.Further,webrokedownthedataintovariouscategories,inanattempttocapturethecoreanddevelopingtrendsoflistedChinesecompanies.Ingeneral,wefoundtheprofitabilityofChineselistedcompanieswasnotthatmuchlowercomparedtoitsinternationalpeers.TheA-sharesseemtohavebettermarginsthanHongKonglistedcompanies.However,thereseemstobeanalarmingtrendofdeclineinROEamongsttheA-shares,andtosomeextenttheB-sharesaswell.ThisreflectstheviewthatChineseexecutivesarenotmanagingtheirequitybaseswellafterproceedsareraised.Typically,Chineseexecutiveswanttoholdontoasmuchequityaspossibleandsometimestendtospreadtheirresourcesbeyondthecorebusinessesoftheirowncompanieswithoutproperreturns,loweringtheefficiencyofshareholders’capital.ThenetincomemarginsoftheChinesecompaniesaresubstantiallyhigherthantheirinternationalcounterparts,buttheratioshavebeenonthedecline,inasimilarveintotheROEratios.Thisismostevidentinthemanufacturingandconsumerproductsectors.TheChineseutilitycompanieshavethesteadiestmarginsamongstthesurveyedcompaniesandtheirprofitabilityissignificantlybetterthanthoseintherestoftheworld.ThereisnoclearevidencethatHongKonglistedChinesecompaniesareafflictedbydecliningmarginslikethemainlandlistedones,despitehavinggrappledwithseverecyclicalpaincausedbytheAsianFinancialCrisis.MarginsofChinalistedcompaniestendtofalloncethelistingprocessiscompleted.Wedividedcompaniesbytheiryearoflisting.From1994to2000,eachandeveryclasssawtheirROEpeakingineithertheyearimmediatelybeforelistingorinthelistingyear.Mostclassesrecordedconsecutivefallsinprofitabilitysincethen.All45overseasand12domesticinstitutionalinvestorsthatweinterviewedinoursurveyrankprofitabilityasahighpriorityfortheirinvestmentdecisionsandmostoftherespondentsbelieve1ThispaperisareportforShanghaiStockExchangeJointResearchProgram.Viewsexpressedinthisreportareauthorsownbasedontheirresearchandacademicjudgements,whichdonotreflecttheofficialstanceofCreditSuisseFirstBostonorFudanUniversity.2themarginsofChinesecompaniesareprobablybelowtheworldaverage.DomesticinvestorsareeagertoinvestintheHongKongmarket,oncetheproposedQDIIschemeallowsoffshoreinvestment.However,onlyonethirdoftheinternationalinvestorsrespondedpositivelytoinvestingintheA-sharesmarketswhenQFIIopensuptheA-sharesmarketstothem,whileanotherthirdindicatedthattheyhadnoimmediateplanstoinvestintheA-shares.TheremainingthirdsaidtheywereundecidedeveniftheyareallowedtobuyA-shares.WeconcludethatChinaandtheChinesemarketsmustplaceahigherpriorityonprofitabilityandreturnonequity.Thefallinmarginsinkeysectorsmustbeeradicated.AndlistedcompaniesmustremainfocusedonROEandmargins.Earningsarethefundamentalsofacompany,asROEisthefoundationoftheinvestmentselectionprocessinamaturedcapitalmarket.TheseissuesarelikelytobecomemorepressingasChinaopensitsdomesticcapitalmarkettoforeigninvestorsandallowsdomesticinvestorstoinvestinoverseasassetclasses.Theprocessofliberalisationincapitalflowsisexpectedtomakeinvestorsmoreselectiveinchoosingwhichassettoinvestin,orwhethertoinvestatall.Improvingprofitabilityandshiftingfrom“quantitativeexpansion”toproductivityenhancementarealsocrucialforChinatoensureitsgrowthmomentumissustainable.31Profitabilitystudy:Significanceandkeyconclusions1.1SignificanceofprofitabilitystudyProfitsarethecoreofbusinessoperationsinamoderneconomy.Driveforprofitskeepproducersproducingandretailersselling.Ascompaniesexpand,capacityexpansionstartstogrowbeyonditsownmeans.Fundraisingbecomesanecessity.Thiscanbeachievedthroughloans,bondsorstocks.Thekeyforbankloansorbondissuanceiscreditworthiness,orborrowers’abilitytopaybackdebt.Forthestockmarket,thefocusisonpresentandfutureprofitability,intermsofearnings,earningsgrowth,cashflows,marginsandmarketshares.Inthedirectcapitalmarket,capitalinvestmentdestinationsaredeterminedthroughcomparingreturnonequity(ROE).Companiesthatcandeliverearningsandcreatemaximumreturnoninvestmentdeservethetoppicks.Unliketheoriginalcapitalistorentrepreneur,moneyatthestockmarketlevelhasmanychoicesofinvestment.Itismuchlessattachedtotheoriginalinvestmentplanandtypicallylesspickyaboutwhichindustryormanagement(smartinvestorsdocareaboutsectorandmanagement,butmainlyfromaninvestmentperspective,notfromapersonalone)itwillinvestin.Moneyiscommittedtomakemoney.Thehigherandthestrongerprofitsare,thebiggerthereturnstheinvestmentwillreap.WhileROEprofitabilityisatthecentreofequitymarketsworldwide,lessemphasistoithasbeengiveninChina.TheshortlifespanofChina’sstockexchange,excessivedomesticliquidityinthepastyearsandrestrictionsoncapitalflowallappeartohavedirectedattentionawayfromprofitability.ManagementofsomelistedChi