"This year, the central enterprises generally maintain the 'one profit and five rates' target management system unchanged" and "strive to complete more than 70% of the main tasks of a new round of state-owned enterprise reform actions within the year"... At the meeting of the heads of central enterprises held recently, the State-owned Assets Supervision and Administration Commission of the State Council clarified the business objectives and reform tasks of central enterprises this year.

In addition, Zhang Yuzhuo, director of the State-owned Assets Supervision and Administration Commission of the State Council, said at the meeting that central enterprises should pay more attention to enhancing the value of added value, functional value, economic added value, the proportion of income and added value of strategic emerging industries and the value of five aspects of brand value. What is the meaning behind these demands?

We will increase the contribution of central enterprises to national economic growth

The added value and functional value measure the comprehensive contribution of enterprises to a country's economic and social development from different dimensions

The value added of enterprises reflects the value created in the production process, which can directly reflect the incremental contribution of enterprises to the national economy. Functional value mainly reflects the political utility and social function played by enterprises in addition to creating economic value.

As the "pillar" of the national economy, central enterprises shoulder three kinds of economic, political and social responsibilities. In the past year, they have played the role of "ballast stone" in actively implementing major investment, major project construction and stabilizing the economic market:

From January to November 2023, central enterprises achieved an added value of 9.1 trillion yuan, an increase of 203 billion yuan year-on-year; The total investment in fixed assets (including real estate) was 4.1 trillion yuan, up 9.1% year on year, including infrastructure projects with large investment and long cycle, as well as key core technology research and development projects with high risks and uncertainties. In addition, state-owned central enterprises continue to increase the basic security of energy and electricity, and protect the lights of millions of families with practical actions and practice the mission.

Practice has proved that whether consolidating the dominant position of public ownership or giving play to the leading role of state-owned economy, central enterprises are required to have a considerable scale and maintain a certain volume.

Experts believe that the meeting emphasized that more attention should be paid to improving added value and functional value, which is to hope that central enterprises can further establish the correct concept of development and political performance, on the one hand, continue to improve the contribution of central enterprises to China's economic growth, on the other hand, strengthen strategic awareness and functional orientation, and better play a strategic supporting role.

We will raise capital efficiency and curb blind investment

Economic value Added (EVA) refers to the difference between the net operating profit after tax and the weighted average cost of capital of the enterprise, which is the "real profit" created for investors.

Compared with the total profit, net profit and other indicators, this indicator not only excludes the cost of debt, but also considers the opportunity cost of equity investment, which can more truly and objectively reflect the value creation ability of enterprises.

Since 2010, the State-owned Assets Supervision and Administration Commission of the State Council has fully implemented EVA assessment. Between 2010 and 2022, central enterprise EVA increased from 71.4 billion yuan to 842 billion yuan. However, overall, compared with world-class enterprises, the return level of China's state-owned capital still needs to be improved.

Yi Xuandong, director of the Research center of the State-owned Assets Supervision and Administration Commission of the State Council, wrote that the meeting emphasized more attention to improving economic added value, intended to guide central enterprises to pay attention to "first calculate and then invest", pay attention to the "full cost" including debt capital and equity capital, optimize capital investment and layout, reduce inefficient and ineffective capital occupation, generate real economic profits, and enhance long-term value creation ability.

Actively layout new track, develop new quality productivity

At present, a new round of scientific and technological revolution and industrial transformation is reshaping the global economic structure, and strategic emerging industries are a new track for countries to compete.

The recently held Central Economic Work Conference set the agenda for 2024 economic work, proposing to build a number of strategic emerging industries such as bio-manufacturing, commercial aerospace, and low-altitude economy, and open up a new track for future industries such as quantum and life sciences.

Overall, the central enterprises have a solid foundation in the traditional industrial field, but the constraints such as resource bottlenecks facing the sustainable development of the industry are increasing. In the face of the new situation, in 2023, state-owned central enterprises went all out to develop strategic emerging industries, and completed 1.6 trillion yuan of investment in strategic emerging industries from January to November, an increase of 31.8%.

If EVA shows the current management quality of the enterprise, then the proportion of revenue and added value of strategic emerging industries reflects the future growth potential of the enterprise to a certain extent.

"The emphasis on paying more attention to increasing the proportion of revenue and added value of strategic emerging industries is to hope that central enterprises can further strengthen the sense of crisis and urgency to accelerate industrial upgrading and build a modern industrial system." Zhang Yuzhuo said that central enterprises should speed up the shift to innovation-driven conformance growth, vigorously promote new industrialization, create new industrial pillars, and increase efforts to develop new quality productivity.

Benchmarking world class, enhance brand value

Brand is an important intangible asset of an enterprise and an important embodiment of the competitiveness of an enterprise and even a country. Accelerating the construction of world-class enterprises and building outstanding brands is the proper meaning.

In recent years, the State-owned Assets Supervision and Administration Commission of the State Council has taken management promotion as the starting point, concentrated on improving the enterprise brand management ability, and systematically implemented the brand building work of state-owned enterprises from the perspective of brand structure, brand identity, brand communication, brand protection, brand assessment, and value management, and achieved positive results.

According to a report released by the Research Center of the State-owned Assets Supervision and Administration Commission of the State Council, the number of central enterprises entering the top 500 global brand value increased from 13 in 2012 to 21 in 2022, creating a number of national business cards with independent intellectual property rights such as high-speed rail, nuclear power and UHV. It has cultivated a number of enterprise brands with "leading force", "added value", "gold content" and "reputation".

"The emphasis on paying more attention to the promotion of brand value is to hope that the central enterprises will further put brand construction in a prominent position, and continuously improve the added value of enterprise brands and brand leadership through the improvement of their own value creation ability, and accelerate the construction of world-class enterprises." Clothing learning east said.

The industry believes that the value of added value, functional value, economic added value, the proportion of revenue and added value of strategic emerging industries, and the value of brand value are closely related, intrinsically unified, and mutually promoting, showing the overall development level of enterprises from different dimensions. Central enterprises should effectively enhance the value of these five aspects, further enhance core functions, improve core competitiveness, and promote high-quality development.

Source: State-owned Assets Supervision and Administration Commission of the State Council