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2016 is the first year of China’s 13th Five-Year Plan and a difficult crucial year for promoting the supply-side structural reform. The listed companies on SME Board, as representatives of China’s outstanding SMEs, have energetically promoted technical innovation, product upgrade and industry transformation, delivering total operation revenue of around 3 trillion yuan and total net profit of 22.4888 billion yuan in 2016. On average, their 2016 operating revenue and net profit are 3.526 billion yuan and 264 million yuan respectively, with respective year-on-year growth being 17.16% and 30.32%. Both of revenue growth and profit growth have hit the record high in recent five years and the overall performance increases at a steady pace.
In 2016, the quantities of SME Board companies featuring increased operating revenue and net profit are 647 and 608 respectively, accounting for 76% and 71% of the total, and the number of companies gaining dual growth is 527, accounting for 62% of the total. In the year, 54 companies gained over 10-billion-yuan operating revenue and 43 had over one-billion-yuan net profit. Among the top 20 net profit winners, nine companies, including BYD, Tianqi Lithium, Muyuan and KDX, have net profit growth of more than 50%. More and more companies are making use of the SME Board platform to grow better and stronger in sustainable development.
The companies on SME Board have a history of distributing high-ratio cash dividend to pay back investors. 656 companies (77.09%) have worked out 2016 cash dividend plans and the proportion of average cash dividend to same-period net profit is 30.48%. 151 companies have their total cash dividend amounting to more than 100 million yuan. Eight companies including Hikvision and Yanghe Brewery distributed a total of over one-billion-yuan cash dividend. 28 companies have their cash dividend-to-net profit ratio of more than 100%. On SME Board, there are 35 companies whose accumulated dividend distributed surpasses accumulated financing amount. For example, Yanghe Brewery has distributed total dividend of 14.5 billion yuan since listing in 2009, which is 5.37 times of its total financing. Hikvision has distributed total dividend of 10.7 billion yuan since listing in 2010, which is 3.15 times of its financing.
SME Board companies have been optimizing capital structure and have intensified efforts on “deleverage”. In 2016, the overall asset-liability ratio is 57.54%, down by 2% from on a year-on-year basis and the quick ratio and the current ratio have respective year-on-year growth of 5% and 3%, indicating that companies are improving their debt paying ability. The average net cash flow arising from operating activities is 393 million yuan, a year-on-year growth of 47%, ensuring payback to control debt risks.
Among the 16 industries on SME Board, 12 industries including agriculture-forestry- husbandry-fishery, manufacturing, and software & information technology service gained year-on-year increase in 2016 net profit. The quantities of manufacturing enterprises account for 77% and their average operating revenue and net profit in 2016 are 2.886 billion yuan and 216 million yuan, with their income and net profit having respective year-on-year growth of 19.56% and 36.81%. After cutting overcapacity and destocking, most manufacturing companies have steady improvement in their market demand and supply while the subsections they falling into have rebounding prosperity on gradual rise and gain favorable results in promoting supply-side structural reform.
There are 661 enterprises engaging in high technologies and 249 in strategic emerging industries. They stick to innovative development, value R&D investment, and become an important force of driving independent innovation, product upgrade and technical advance. In 2016, the net profit of hi-tech enterprises and strategic emerging companies has respective year-on-year growth of 32% and 36%, featuring promising prospect. Corporate R&D investment totals 86.8 billion yuan, a year-on-year growth of 21.05%, and the average R&D input is 102 million yuan, accounting for 2.89% of operating revenue. Among the 249 strategic emerging companies, their R&D input averages 171 million yuan, a year-on-year growth of 23.16%, and their R&D input to income ratio is 4.86%.
In 2016, 78 SME Board units completed major assets restructuring. Active M&A and restructuring not only optimizes resource allocation and improves resource utilization efficiency, but also improves corporate performance. The 78 companies have their average operating revenue and net profit increase by 57% and 223% on a year-on-year basis respectively. In the year, the SME Board companies who implemented and completed their equity incentive plans gained average operating revenue of 3.441 billion yuan and average net profit of 265 million yuan, respective year-on-year increase of 26.28% and 43.48%, enjoying positive influences of reasonable and efficient incentive mechanisms on their performance expansion.
From 2016 onward, there have been 81 newly listed companies adding to the SME Board. On the whole, these new companies experienced growth both in operating revenue and net profit whose respective year-on-year increase is 12.73% and 11.83%, higher than the market increase of 8.54% in operating revenue and 7.23% in net profit.
Since its inception 13 years ago, SME Board has cultivated many quality companies and become the major platform for the listing of industry flagships. At present, 381 companies of the board are ranked among the top three across China and 109 leading products (services) among the top three of international market. Among them, Hikvision, BYD, Suning Commerce, Goldwind Science and Technology, Anhui USTC Iflytek and Yanghe Brewery have grown into leaders of their industries.
SME Board companies focus on developing their main businesses, from which more than 80% of the corporate performance is derived, keep enlarging their operation scale and undergo stable increase in operating performance, showcasing pleasing growth potential. Since its establishment in 2004, SME Board has gained accumulated operating revenue of 14.25 trillion yuan and experienced increase in average operating revenue from 651 million yuan to 3.526 billion yuan, achieving growth in every year and growing at the average compound rate of 15.12%. The board net profit has accumulated to one trillion yuan and increased from 40 million yuan to 264 million yuan on average, with average annual compound growth rate of 17.03% and year-on-year increase in all years except 2012 when economic structure adjustment causes year-on-year drop. It is with the support of constant growing performance that SME Board companies are recognized by the market and have higher valuation than main boards of both Shenzhen and Shanghai market.
SME Board was born in a difficult time for the development of SMEs. In the past 13 years of expansion, it has undergone the tests from financial crises, industrial adjustment and economic transformation and grown and transformed amid the complicated changing world economic environment, displaying the strong economic vitality and sound profitability of quality Chinese SMEs.
