Abstract Few people suspect that under the multiple pressures of falling steel prices, falling profits, and rising debt ratios, steel companies that continue to slump are still in the most severe winter. Under this circumstance, many steel companies have announced their interim results in the near future. Up to now, 35 companies in Shanghai and Shenzhen have...
Few people suspect that under the multiple pressures of falling steel prices, falling profits, and rising debt ratios, steel companies that continue to slump are still in the most severe winter. Under this circumstance, many steel companies have announced their interim results in the near future. Up to now, among the 35 listed companies with steel as their main business in Shanghai and Shenzhen, 19 listed steel companies have announced interim results, including 7 Loss, 12 profit. Although the situation is still not very optimistic, but from the performance point of view, there has been some warmth. 
On the evening of August 26, WISCO announced its first-half performance report. In the first half of the year, WISCO’s operating income was 44.398 billion yuan, down 2.01% year-on-year; however, the net profit attributable to shareholders of listed companies was 461 million yuan, a year-on-year increase of 241.32%.
It is worth noting that WISCO’s non-operating income in the first half of the year was 46.397 million yuan, of which government subsidies totaled 42.534 million yuan.
The phenomenon of government subsidies to modify performance is not an isolated case. In the first half of this year, apart from WISCO, enterprises such as Linggang and Xiaohang Steel were all subsidized by the local government to varying degrees.
According to statistics, in 2012, among the 35 steel enterprises in the Shanghai and Shenzhen stock markets, the government's total financial subsidies for steel enterprises reached 6.145 billion yuan, of which 6 were over 100 million yuan, and the largest subsidy was Chongqing. Steel is 2.01 billion yuan.
Real subsidy
On August 26, WISCO’s first-half results report showed that WISCO received a government subsidy of 42.534 million yuan in the first half of the year. In addition, the data shows that in 2012, WISCO achieved a total profit of 112 million yuan, while government subsidies reached 345 million yuan.
Linggang's interim results are equally beautiful. Linggang's interim report shows that its accumulated operating income in the first half of the year was 7.33 billion yuan, a year-on-year increase of 10.96%, and net profit was 36.927 million yuan, a year-on-year increase of 115.92%, turning losses into profits, and last year. In the same period, the loss was 232 million.
In the first half of the year, Linggang received a huge subsidy of 380 million yuan from the local government. On June 4 and June 27, it received government subsidies of 31.8 million yuan and 3.5 times respectively. 100 million yuan.
In addition, in the first half of the year, Hangxiao Steel, which has a net profit attributable to shareholders of listed companies of 7.39 million yuan, also received a government subsidy of 3.02 million yuan in the first half of this year.
In the past three years, as the net profit of the steel industry has been declining year by year, the amount of financial subsidies received by steel companies has also increased year by year. According to statistics, 35 steel companies in Shanghai and Shenzhen stocks received government subsidies in 2010, 2011 and 2012 respectively. 1.143 billion yuan, 3.057 billion yuan, and 6.146 billion yuan.
Among them, the largest amount of subsidies is Chongqing Iron and Steel. In 2012, Chongqing Iron and Steel received a government subsidy of 2.02 billion yuan, and its annual loss amounted to 2.045 billion yuan.
Analyst Hu Yanping said that steel mills are generally core enterprises in the local area, and they have a relative contribution to profits and taxes and GDP, but most of the government subsidies are state-owned enterprises. For the whole industry, the situation in the steel industry itself is poor. Under the subsidies, state-owned enterprises and private enterprises are not at the starting line, which will be no small pressure for private enterprises.
Sheng Zhicheng, deputy secretary-general of the Steel Logistics Professional Committee of the China Federation of Logistics and Purchasing, said that when steel enterprises are generally difficult, government subsidies are a normal phenomenon. Steel enterprises are not only big profits and taxes, but also have a pulling effect on local employment. Secondly, in terms of environmental protection, in general, state-owned enterprises have more social responsibilities than private enterprises, and the social contribution to local governments is greater than that of private enterprises.
Pseudo warmth
In response to this warming sign of optimistic performance through government subsidies, Hu Yanping said that this warming is certainly not very real. The performance in the first half of last year was very poor, so it seems to be a little better this year.
Relevant persons of China Steel Association also said that in the first half of the year, although the whole industry still had a small profit, the business operation situation did not improve much compared with last year. The total profit this year increased by 30.4%, mainly due to the low base last year.
Judging from the profits realized in each month of the first half of the year, the fact that the industry’s vicious price competition has led to a significant decline in the economic benefits of the steel industry is unquestionable.
Zhang Changfu, vice president of China Iron and Steel Association, said that in the first half of this year, the economic benefits of the industry decreased month by month. In addition to January and February, the profits of large and medium-sized enterprises reached 1.338 billion yuan and 998 million yuan respectively. A large amount of release has caused the price of minerals to rise, steel inventories to increase, steel prices to fall, and corporate profits to decline. In March, the profit was 267 million yuan, in April it was 153 million yuan, and in May it was 149 million yuan. In June, the financial newsletter, large and medium-sized enterprises realized profits of 690 million yuan, and the whole industry faced losses. By the end of June, the company's loss reached 40.7%, with a cumulative loss of 11.679 billion yuan.
The data shows that in the first half of 2013, the member steel enterprises achieved a profit of 2.267 billion yuan after the profit and loss, and the sales profit was only 0.13%. If the non-main business profit was removed, the main business was actually a loss. At the same time, the asset-liability ratio of key enterprises rose to 69.5%, the highest since 2006.
In addition, Hu Yanping said that the steel circulation industry has further deteriorated, the number of steel traders has further decreased, the enthusiasm of existing traders to participate in steel mills has declined, and various pressures are shifting to steel mills.
She introduced that 80% of Shanghai steel traders are reducing their scale, reducing the number of steel mills, reducing costs by changing office locations and cutting staff, and gambling market quotients are becoming less and less, and some companies are in name only. . Compared with the most prosperous period, steel traders in Shanghai have decreased by about 50%, and Tianjin in North China has decreased by 15%-20%.
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