As of the end of April, the listed companies has finished information disclosure of the 2016 annual report and the first quarter report of this year of. The listed company performance is a mirror of the macro-economic changes. Why did the listed company's earnings accelerate? What are the highlights in the annual report and the quarterly report? Can rapid growth continue? Read the annual report to find some clues.

Why did the listed company's earnings accelerate?

Traditional industries have recovered steadily, and the cyclical industry has turned into a major source of earning growth.

Lens: happiness comes too suddenly! The current situation of steel enterprises is evaluated by the researcher of steel industry. It is still remembered that many iron and steel enterprises have suffered comprehensive loss in 2015.

For the steel industry, in 2016,  Every cloud has a silver lining. With the supply-side structural reform, the market supply and demand relationship has been significantly improved, and the steel price index has nearly doubled in the last year, which has led to a great reversal in the performance of the steel sector. Statistics show that the 30 listed steel enterprises gained 19.7 billion yuan for the whole year, it is the highest since 2011. The average gross profit at 495 yuan, it is the highest since 2009. Hongxing JISCO, which lost 7.4 billion yuan in 2015, achieved a meager profit last year, with a net profit of more than 200 million yuan in the first quarter of this year.

For the shift in performance, Baoshan Iron & Steel explain in its annual report: with the supply side reform of the steel industry, and the strictly environmental protection policy, the domestic steel prices end the unilateral downward trend since 2011. Based on themarketrecovering and the steel and iron prices rising, and steel enterprises structural adjustment, the domestic iron and steel industry turn into gains in 2016.

In fact, the cyclical industries, such as steel, coal and nonferrous metals, were outstanding last year. Among of the 37 coal companies, 27 reported year-on-year net profit growth, and the entire coal sector net profit was nearly 40 billion yuan in last year. Among of the 107 non-ferrous metals companies, 88 reported year-on-year net profit growth, accounting for more than 80 per cent.

The steady recovery of traditional industries has become an important source of growth for listed companies. Tian Lihui, a professor of the institute of financial development at Nankai university, pointed out that according to the 2016 annual report China has achieved some results in stabilizing economic growth、adjusting economic structure and preventing financial risks. The stable growth of our economy is mainly due to the improved performance in traditional industry, nearly 70% of listed companies gained profit year-on-year, especially in non-ferrous metals, steel, coal and other cyclical industries, which means the recovery of china economy is gaining momentum.

Ren Zeping , chief economist in Founder securities pointed out, since 2010, a large number of small and medium-sized enterprises retreat the market in iron and steel, coal, cement, glass, chemical, mechanical, and other traditional industries. The competition pattern in traditional industry is optimized, the capacity utilization rate of Chinese industrial enterprises is gradually bottoming out, and the actual situation of some traditional industries is better than the data.

Is it a flash in the pan or positive in medium term?

The steady accumulation of emerging industries will help to enhance the listed company performance.

Lens: Consumption supports economic growth. In some competitive consumer industries, a group of listed companies has become a marketized blue-chip company with the combination of self-accumulation and extension expansion. In 2014-2016, 116 companies, such as Huashu media and Changan automobile, were reported that the compound growth rate is more than 30%.

Even though listed companies are doing well, there are some concerns. Some argue that in the cyclical industry, A share price growth in the first quarter is a short spring scenery, it will gradually downward.

The steady accumulation in emerging industries will help to enhance the stability of the performance of listed companies. According to Tian Lihui's analysis, the listed companies' annual report shows that emerging industries are growing well. Last year, net profit rose 47% from a year earlier. Net profit in the computer industry rose 37% year on year; Net profit of culture and media industry increased by 27%. The prospects of artificial intelligence, information security, health China and other fields are broad, and the endogenous growth characteristics of emerging industry companies are obvious. This shows that China's economy is upgrading, and the industrial restructuring has achieved periodic results.

According to the research report released by Haitong securities, economic growth can be divided into two phases. One is that Adam Smith's increase, the factors input is driving the growth, which is the growth of quantity. Second, Schumpeter's increase, innovation is driving the growth, which is the qualitative improvement. Looking ahead to the stage of China's economy, it is possible to enter the second stage.

Analysis shows that, at present, the industrial structure of listed companies has changed, in accordance with the direction of the transformation of science and technology and consumer industries. Such as information technology, telecommunications services, optional consumption, daily consumption and health care market, the market value of them have risen from 18.4% in 2010 to 35.1%, the net profit ratio of them risen from 12% in 2010 to 18.2%. However, the reform of state-owned enterprises and supply-side structural reform have also significantly promoted the operation efficiency of traditional industries, and the rate of expense ratio has decreased significantly, and the return on equity returns.

It is worth noting that, in addition to the production capacity, several other aspects of the supply-side reform last year were also reflected in the annual report. According to the information data, the total asset-liability ratio of a-share listed companies reached 84.61% in 2016, and the ratio of asset-liability ratio in the financial sector dropped sharply to 59.93%, which is near the low point of recent years. The real estate destocking has achieved initial results. The share of Shenzhen real estate stocks in total assets decreased from 60.19% in 2015 to 53.96% in 2016.

In the overall good background, there are also some plate performance declines. For example, non-bank financials were underperforming, with net profits decreased 30% last year. Tian Lihui pointed out that non-bank financial sector windfall often comes from huge fluctuations in the market and insufficient regulation of financial innovation, it reflects we strengthen financial supervision and regulation to guard against the build-up and spread of financial risks.

What do investors get?

Cash dividends become the mainstream distribution plan for public company.

Lens: In previous years, the high transfer concept is very hot in the period of the annual report release. This year, due to the strengthened supervision, listed companies have modified high transfer scheme , in the 2016 annual report, nearly 75 percent of listed companies plan to implement cash dividend, which is significantly increased. Under the continuous promotion of supervision measures, cash dividend becomes the mainstream of the dividend scheme for listed companies.

The most typical example is the China Shenhua Energy, paid dividends and special dividends 2.97 yuan per share, and distributed 59 billion yuan in cash to shareholders. At current share prices, China's shenhua Energy dividend yield is about 15%. In terms of cash dividend per share, Guizhou Moutai, Gree Electric Appliances are among the top five. In terms of cash dividends, 433 companies have a dividend payout ratio of over 50%.

However, it is important to note that there are still a lot of iron roosters on the market. According to the data, 32 of the companies listed before 2011 have never implemented a cash dividend since go public. For those who has the ability to share a dividend but not, how to improve their shareholder consciousness through hard measures is a difficult problem to be solved in the future.

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