Zhongmin vote for “the warlords”

Polaris solar PV net news: seal-branding, root capital for private capital profit-seeking genes, zhongmin voted to take to resolve the excess capacity, reform Pathfinder to strut their stuff.

Late August day in Shanghai on the Bund, in the morning, sunlight through glass onto the Bund International Plaza, covered with a red carpet, just retiring Minsheng Chairman Dong wenbiao, China Minsheng investment joint stock company (hereinafter referred to as ‘ cast) as Chairman of the Board of Directors has once again become the focus. Dong wenbiao, like pledging warriors, confidently made the warlords to 59 private entrepreneurs: “fight for 5 years, people voted to become internationally competitive in the big, respected, sustainable development, investment group. ”

Different from the sunny Shanghai, located in Tangshan, Bohai Sea steel, many steel works hard to reproduce formation splashed scene, looking rusty steel blast furnace, part of the equipment was covered by spread of weeds. Only Tangshan has nearly 100,000 steel workers facing unemployment, entrenched business bad debts banks, idle land lacking development funds. National large and medium sized iron and steel enterprises in the first half of this year sales profit margin of only 0.41%, iron and steel industry has 11 consecutive losses. Similar to the steel industry, PV module capacity utilization was less than 80%, shipbuilding industry is less than 75%, and these industries with surplus production capacity in the deserted market suffering.

September accompanied by continuous rain, people’s enthusiasm of zhongmin cast attention began to turn cold, zhongmin cast and Dong wenbiao, PV of steel, shipbuilding and other industries with surplus production capacity of enthusiasm no reduction at all. This personally approved by Prime Minister Li keqiang, focusing on integrated steel, PV, ships surplus capacity of the private investment firm, much emerged as saying stepped in, through capital operation, to solve excess capacity in chronic illness find a way out.

The Chinese version of the Morgan

“Resolve the essence of overcapacity is who is going to pay for the costs of industrial restructuring, fostering new economic growth point of the problem. “Liu Haimin, Deputy Director of China Metallurgical economic development research center, told reporters. Resolve the overcapacity is an age-old topic has long been not resolved, but growing. Problem is not the industry itself, but the product of macroeconomic development disorders. Between tides ebb in the macroeconomic, industrial economy were stranded on the beach, a shortage of a flow of water, helping the industry off the hook complete the transition and establishment of new economic growth points.

Who is going to provide a flow of water, bear the risk? Is the Government’s fallback, or the introduction of social capital?

During the crucial period of China’s economic reform, in March 2014, a report on the preparations for the vote in Prime Minister Li keqiang, the programme placed the desk. Social capital formation of large private investment firms, through the integration of financial and capital operation means, stimulating industrial assets, resolve excess capacity for industrial restructuring and upgrading. Through industry consolidation, mergers and acquisitions, capital restructuring, financial consolidation, and build a platform of private finance in China.

“(In the cast) to do a Chinese version of the Morgan group. “People voted Chairman Dong wenbiao has openly told the media. That year, Rockefeller in “World War I” during the economic crisis in the world after using the power of finance capital, realized the United States steel industry consolidation. Financial capital in industry, already profit is no longer pumped into a relationship, but through financial reshaping the industry.

Turns out in Dong wenbiao, zhongmin vote will become a holding group, is a collection of Minsheng Bank, China Minsheng lease financial-industrial Empires, people’s livelihood, such as e-commerce companies, participating in domestic infrastructure construction on the one hand, on the other hand hoping to enjoy Government preferential policies, relying on reserves and the State Development Bank credit in support of private enterprises in China to overseas mergers and acquisitions. Set up a private investment bank in China was a bold vision, out of risk concerns, China does not allow direct investment banking industry to directly hold stakes in industrial companies. Therefore, among the programmes submitted to the State Council, zhongmin thrown away the reference to investment banks, and resolve the overcapacity, financial platform solution is proposed.

Or not to batch, is a strategic choice for policy makers. Zhongmin vote again is stirring up a sensitive nerve in the reform of China’s economy. Compared to the 19 years ago, scattered for private capital to participate in reforming State-owned enterprises, resolve corporate debt quagmire of chaos and controversy, now private enterprise groups wanting to build and finance the platform, and then transition to investment banking, course more clear and bold.

In March 2014, China special report to the State Council leaders on many occasions and explained. Eventually, zhongmin vote was aimed at “private fund” and “Morgan” plans were downsized as investment joint-stock company, position and focused on leading the transformation of private economy, excess capacity in the integration industry.

On August 21, voted zhongmin was formally established, actual registered capital of 35 billion dollars, led by the Federation of industry and commerce, 59 domestic private enterprises jointly sponsored, funded, and every company that owned stocks on average less than 2%.

In a sense, zhongmin vote capital structure more like a smaller version of the Investment Bank. Raise the funding pattern for all, turned into a small range of corporate investment. In order to adapt to the upper limit of the number of corporate shareholders 60, zhongmin investment fund shareholders is limited to 59, including the suning appliance, Oceanwide construction, ZONGSHEN and other well-known companies.

“If you combine real bullish on excess capacity in business, 50 billion yuan in registered capital, enough that the company split, and even spend will intervene. However, each not exceeding 1 billion yuan of investment, with an obvious temptation means. After all, nobody wants to miss the first bus of the future private investment bank in China. “The Chinese Academy of Social Sciences Institute of industrial economics, industrial development Office Director Zhao Ying told reporters, Li approved of the Prime Minister, opened the new attempt of the private economy. However, it is also in the cast of warlords, which must use concrete actions to prove the value of China’s industrial and economic development.

To complete the tasks resolve the overcapacity, zhongmin on financial holding Group’s financial investment Corporation also plans to set up under the Civil Union of iron and steel, mining and logistics, navigation between the Republic of China in and new energy, such as specialized investment of 9 subsidiaries. Among these, the new energy business started early.

Blood transfusion in PV

On August 28, after listing as the first item, zhongmin investment reach the fertile hetao plain. Zhongmin investment plans to invest 3GW~5GW photovoltaic power generation project in Ningxia, a total investment of 30 billion ~500 billion yuan.

“Ningxia is a cornucopia of the photovoltaic industry. “Meng Xiangan introduces China renewable energy society, average annual sunshine time of 2,974 hours in Ningxia, frost-free period of 168 days, the maximum temperature 38 ℃, are light and heat resources-rich parts of the country, effectively generating light longer than almost nearly 50%, Hebei, Shanxi and Inner Mongolia.

Meanwhile, Ningxia’s coal, oil and gas resources, is a leading energy base in Western China. Difficulty with grid-connected PV power plant in Inner Mongolia, Xinjiang is different, without isolated operation in Ningxia’s embarrassment. In the “Silicon” above the waves as a mirror of the PV power station, State grid of transmission lines and lined, straight to the Southeast. Both resources and the grid, Ningxia has a unique advantage.

“Photovoltaic plant investment institutions all over the country to seize the resources of Ningxia. “Meng Xiangan said. However, Ningxia power grid, renewable energy capacity was around 1.6GW, near-saturation of the annual plan. In this case, zhongmin access 3GW~5GW in Ningxia project approval “flagging”, can be described as a miracle.

Zhongmin these persons declared: “this is a special approval from the national development and Reform Commission project. “Only get a” flagging “of PV projects in order to grid, received government subsidies. Prior to this, insiders say, zhongmin investment Ningxia photovoltaic power plant in the coming years, “flagging” almost entirely in the Pocket. Zhongmin investment picked up a whole cornucopia.

Although Dong wenbiao later denies this, and vowed that the subsidies as “double edged sword”, not conducive to the healthy development of the industry, but it cannot be denied is that PV power station completed, subsidies will bring real money cash flow.

According to the current price/kWh for grid-connected PV power plant in Ningxia 0.9 Yuan, 3GW~5GW PV project, zhongmin cast will bring 6 billion ~105 billion per year in cash flow. Life calculation based on 20 power generation, generating operating profit of 120 billion ~2100 billion yuan, even adjusting for capital cost and operational cost, project profits in the billions of Yuan. People voted in the vast capital guarantee the integration of upstream industry’s power and strength.

Trina Zhang MI, head of media relations, told reporters, zhongmin investment and industrial capacities currently directly involved in upstream of polycrystalline silicon, photovoltaic modules, photovoltaic industry may not, however, based on available resources, by means of financial resources is quickly turning into a capital vote in strength.

On one hand, zhongmin investment through large-scale PV power station construction, pull the upstream of production, play a role in transfusions. Enterprises can reduce costs through further research and development in the upper reaches of the order, such power station construction and the upstream industries form a positive interaction. The other hand, zhongmin cast could use capital operation directly upstream of several corporate restructuring or mergers and acquisitions, through financial reform spin off debt, integrated industrial chain so as to eliminate backward production capacity, optimize the industrial structure.

On May 19, the people voted in only 10 days after registration, zhongmin on photovoltaic products and technology providers and operators of Concord Group’s primary industry reached 10 billion yuan fund agreements through capital Union over professional operators and instead cut into the upper reaches of the PV industry and polycrystalline silicon industry.

“Through its cash, capital operation and larger, transfer of capital, industry consolidation. Zhongmin invested in photovoltaic industry consolidation in foreign languages has been clear. Now the key is, how resources are to be realized, the formation of variable capital. “Shanghai Securities Senior Ni Jiwen, a researcher told reporters. At present, China PV power plant has no means for realization of assets, not mortgages, loans, market.

In this regard, zhongmin vote seems to have figured a way out. Dong wenbiao has confessed to the media, zhongmin PV power plant project capital costs only about 5%, so low financing costs could bring zhongmin started large-scale PV power plant project courage and ability. However, what kind of financing to be able to guarantee the financing of such low costs?

PV of 30 billion ~500 billion yuan Investment Bank apparently does not reality. In addition to national development banks can provide a small amount of low interest loans, but no banks willing to take that step in PV industry, finance is even less practical, 5% interest even banking earnings.

“People could rely on its own capital and other joint investments in enterprise, advance development, on the choose the financing channels, for example, through finance leases, trusts, funds, securities, lowering the cost of financing and, finally, realize PV asset securitization. “Ni Ji smell analysis.

In March this year, Dong wenbiao at the “two sessions”, to capacity as the CPPCC put forward proposals for further promoting securitization of credit assets in China. For now, Dong wenbiao recommendations have not yet been answered. Capital cannot be securitized, through exports of financial operations, zhongmin once ate too much resources and projects, as he himself brave General of the beast, topples the funding risks.

Cautious of the market for asset-backed securitization in China and zhongmin cast only a detour. Dong wenbiao bluntly stated that the current cast also is hoping to obtain financing through low-cost bonds issued outside, at the same time, the establishment of capital markets and private equity business, creating private equity investment funds, play a direct financial advantage and leverage. This is undoubtedly people voted present a better choice.

Ulterior meaning is not “steel”

Cornerstone photovoltaic industry earnings as profits in the future, step by step to advancing capital operation, zhongmin’s logic as investment an untapped gold mine, government resources, raising startup capital, dissolve the temporary overcapacity is not difficult.

However, if zhongmin is facing a gold that has been mined out, and what to do with it?

Ningxia’s “Silicon Valley” hot construction site, turning miles of steel city Tangshan. It was August hot weather there is some silence. Tangshan xingye industry and trade, one of hundreds of small steel mills hospital, rusty distant blast furnace, chimney once stood in last year’s “environmental remediation” were destroyed. Three-storey office building locked, freight yard, steel has been roped in to debt, leaving only one man high grass. Summer insects would whisper and talk to Porter’s sound clearly audible.

“The mills have long stopped almost two years without pay, still owes the workers ‘ funds raised more than 30 million Yuan. “The watch-man told reporters. Because of lagging sales and nearly 200 million yuan in credit extension, two years ago, Mills was unworkable, desperation to workers and local villagers collected money of 30 million Yuan, to regroup. In 2012, steel prices have slumped and letting Mills total defeat, land mortgage in the Bank right now. In 2013, the breaking capacity to dispose of the mills in Hebei province, blast chimney was blown up, but due to unpaid bills too many steel mills failed to complete collapse. Waiting list of more than 2000 workers or small business, the local government issued regular food and heating subsidies, allowing workers to eke out a living.

Similar to the situation in small and medium steel enterprises in Tangshan and minority. According to statistics, from 2009 until now, due to overcapacity and pollution of troubled steel, Tangshan and shutting steel mills have nearly 100 involving 40 million tons of steel capacity, nearly 100,000 people employed, involving nearly 600,000 people in Hebei province as a whole.

Zhao Ying on reporter said, currently China of capacity excess main is divided into two species, a is similar PV industry of relative excess, due to market development not mature, although needs growth is high, but capacity to timely conversion for products sales, as long as fake to time difficult not difficult solution; another a is is as steel industry of absolute excess industry, not only market needs growth near saturated, excess of capacity often to conversion for market value, and exists personnel placed and debt burden, large history burden.

Integrated steel production capacity will not only need to pay the cost of investment, but also pay huge social costs. This also means that resolve the excess steel capacity would become the toughest vote in future “hard stuff.”

As envisaged by the zhongmin cast in steel plate, zhongmin vote chose fangda group, DeLong steel group, Dragon group and Sichuan chuanwei Group 4 private iron and steel company as a platform for mergers and acquisitions and industry consolidation through mergers and acquisitions, control over 100 million tons of steel production capacity in the country. Meanwhile, zhongmin voted according to national and local situations, replacement, land inventory of steel production capacity of integration, and business development.

“For absolute excess capacity businesses, apart from the few companies also have industrial value, most businesses are reflected in the value of land and productivity indicators, and even some production enterprises have not even index. So-called industrial restructuring of the vast majority of that is land development. “Economic Zuo Dapei, a researcher at Chinese Academy of social sciences, told reporters. Alongside the old steel mills in China are concentrated in the cities, and even some steel mills have already surrounded by the city, once industrial land into commercial land, values have risen sharply.

However, under the existing national land policy, land property changes value, not the property, on the one hand could not be reflected in the companies ‘ assets, not trading cash; the other hand once the deal would hit a sensitive nerve of the privatization of State-owned assets.

Different from 19 years ago, the State-owned enterprise reform, zhongmin cast the opening to “liberal-minded” many say land development was no longer a taboo subject. From a marketing standpoint, huge stock capital was buried under steel mills and the irrational allocation of resources. And both land development, or the disposition of excess capacity, personnel placement need to pay huge amounts of money, through an open, fair and transparent market, and to liquidize the assets, you can solve the problem of capital.

Tangshan xingye industry and trade to steel mills, for example, its nearly 400 acres of land used for steel production has been surrounded by the city, adjacent to the steel mill across the street on the West side is a high-tech Park in Tangshan City and Motor City, less than 100 metres east of the business district, the Government floor price of land up to 3000 Yuan/sq m, property price up to 6000 Yuan/square meter. In Tangshan, here is the letter of the prime location. Xingye industry and trade steel mill once it is integrating, land will only generate nearly 3 billion yuan of value-added space.

Planing to repay funds, bank loans, overdue taxes, resettlement workers, along with about 400 million dollars to the cost, minus costs of initial development and governmental land leasing cost about 2.3 billion yuan, the project will still have more than 10% of the Maori. Financing cost restructuring process at a relatively low level, overall project profitability, if a local government development project implementation package, profitability can be further improved.

Aim land wealth, investment structure that can be seen. Docked in people voted in private iron and steel company as a mergers and acquisitions platforms at the same time, jiaye real estate company in the layout. According to the industry’s plan, will focus on the development of a city core area of land, new planning and land development in second-tier cities, listed in 35 years, a decade of real estate leaders. Ulterior meaning is not “steel”.

Capital “aircraft carrier”

In addition to land, according to the integrated steel industry overcapacity, zhongmin cast also has an ambitious goal, it is steel, mining, shipping, transportation vertical integration of four main.

Follow the simple logic of industry, steel overcapacity in the shipyard can provide cheaper steel, thereby activating assets; and the shipyard produced ships, through the Organization of fleet, can manage the shipping prices, reduction in iron ore charges; ‘s control over the price of iron ore resources and shipping, which in turn can reduce iron ore costs steel.

After the four industries into a platform for capital formation jijiaozhishi, overcapacity will not only be eased, industry voice in the global market, China will also be greatly enhanced. People voted in this is not wishful thinking, but the main pattern of the world iron and steel industry development. Japan, and Brazil, or the three major international mining giants, are taking advanced combination of mode of operation. The most typical is Japan Consortium system. Japan Consortium not only with Japan national finance and politics are closely linked, and in the field of combination is even more extreme.

Japan’s Nippon Steel Corporation steel, Mitsubishi heavy industries, shipbuilding and shipping, Mitsui is responsible for investment in Brazil, and Australia’s iron ore. In Japan’s steel, shipbuilding, shipping and overseas mine belonging to the independent’s table behind both Nippon Steel and the Mitsubishi, Mitsui, in fact belong to a Japan the chaebol system. Through cross shareholding between the chaebol and dispatch of personnel, capital and personnel management as a whole. The peak in the 1990 of the 20th century, Japan six consortia of above average internal shareholding ratio almost 50%.

Consortium banks become the industry’s settlement Center, steel, mining, shipping, shipping companies were largely settled by the same banking system, and by the same system commands directly through securities, shares, loans or multiple channels, such as allocation of resources, coordinate the interests of all affiliates.

This is not a power structure based on the head office and branch office, but a collection of capital, financial, administrative, and even military architecture. In the enterprises development, banks help companies secure rights, business development; enterprise performance deteriorates, enterprises will transfer rights to the Bank, the Bank is responsible for rescue.

Zhongmin was to emulate the organization management mode, covering iron and Steel Union, people in mining investments in logistics, navigation, between the Republic of China in several plates, the formation of professional management, the investment team. Meanwhile, the equity Alliance, some private steel companies, shipbuilders, logistic companies, sales companies, investment companies by way of capital, the cross-shareholding Alliance. Zhongmin investment capital intended to make the whole industry chain “aircraft carrier”.

The ancients is easier said than done. Throughout the capital consolidation of people voted in the current operation and financial strength, zhongmin vote can eventually create “aircraft carrier” remain uncertain.

Financial industry lacks strength, people voted in the uneven integration platform is the biggest problem. Currently, zhongmin total registered capital of 50 billion yuan of investment, as a private enterprise scale is not small, but as a financial business is a drop. If zhongmin can’t get through connecting with the Minsheng Bank total assets of more than 3 trillion yuan, to integrate large-scale industrial chain early.

As zhongmin investment and industrial integration platform of the private enterprises are also alleged to have put together. Iron and steel industry, since the beginning of May this year, zhongmin layout details of the cast have been announced in the steel industry, fangda group, DeLong steel group, Dragon group, chuanwei Group 4 private iron and steel company as a platform for integration of acquisitions and investments. However, four privately-run iron and steel enterprise in China’s iron and steel industry basically doesn’t rank high on title, and rarely even in civil-owned enterprise leaders.

6 months ago, DeLong steel setbacks in haixin iron and steel restructuring. In June, China fangda Group senior anti-corruption event in Jiangxi province. In July, the chuanwei group generated 27.2 billion dollars debt hole, was ordered to “judicial reorganization.” Only Tailwinds that jianlong steel, zhongmin vote solicitation “we first get their own business right,” Deans.

In the field of shipbuilding, zhongmin vote again at a steady Foundation. On May 6. Zhongmin cast Shi Yuzhu subscription rongsheng heavy industries, one of the sponsors, be understood as people voted in by boat lift. However, under the influence of bad shipping environment, rongsheng heavy industries for more than 30 billion yuan of debt problems remained to be addressed.

“Shipping is the international trend towards the poor situation. Currently State-owned large-scale shipyard orders with high-end boats, offshore equipment support, dominated by low-end bulk carriers private shipbuilding enterprise would make it difficult to turn a chance. “Zhao Ying told reporters. Even if people voted through the capital operation and the integration of the private shipbuilding industry, as long as the South and North, two State-owned shipbuilding Giants keep side, China’s shipbuilding industry is hard to beat.

Steel, shipping case of domestic industries in the area, dominated by global giants such as mining, shipping field is the storm of unpredictable. Zhongmin investment and lack of industrial Foundation and the weakness of the industry titans help out significantly without continued support at the national level, zhongmin invested in industry consolidation inevitable twists and turns.

As a litmus test of resolve the overcapacity, zhongmin vote has put a dent in the market, but would become the cure “leftover” weapon, has yet to be fuzhongzhiyuan.

Original title: people vote for “the warlords”

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