"Old Trench Gate" Iron And Steel Industry Today And In The Past: Cut Salaries, Divert Resettlement, And Stick To 1 Yuan "Delisting Warning Line".

Many millions of people have missed the days of a "cash wall".

"Bonus and subsidy are not issued. It is time to wait until good times." The same industry, a state-owned steel enterprises grassroots employees to the twenty-first Century economic report feedback message shows.

In the background of declining industry boom in 2019, the first quarter of this year has overlaid the impact of the epidemic on terminal demand, and the whole steel industry has had a hard time.

Before May Day, 600808.SH announced that the company received 123 million yuan subsidy from the Ma'anshan Finance Bureau. The subsidy project was to "resolve excess capacity and divert workers' fees."

Baotou Steel Group (600010.SH) is also affected by the industry downturn, its own share capital is too large, "technical factors", the stock price close to 1 yuan "delisting red line", forced to throw up at most 4 billion yuan of holdings plan.

In the final analysis, cyclical fluctuation is the cause.

Since the end of the rise cycle since 2016 and after the fourth quarter of 2018, there has been no more favorable factors to support the high steel prices.

Where is the "trench" gate in the past?

Fangda steel (600507.SH), the real controller of the company, is the most willing to smash money in the industry.

The "bottom line" comes from the profitability of Fangtai's first ton steel in the industry, plus the income from flat spring steel and automobile leaf spring, which is more stable than other enterprises.

However, even if a single company's business capability is outstanding, it will not be able to completely hedge the risks of the industry.

In the first quarter of this year, Fangda Steel's revenue fell 19.12%, and its return to mother's profit was 271 million yuan, down 42.3% compared with the same period last year. In the three quarter of 2018, the company's single quarterly profit was more than 1 billion yuan.

This is caused by industry factors. In Fangda special steel's income composition of 15 billion 400 million yuan in 2019, 7 billion 600 million yuan income came from rebar and 3 billion 100 million yuan from wire rod.

"In the first quarter of this year, the demand started later than before, and ore prices rose by 10% over the same period last year, resulting in a sharp decline in profitability," Wang Guoqing, director of Lange Iron and Steel Research Center, said in May 8th.

The data provided by her show that the 7 major steel varieties, including thread, declined in the first quarter of this year, and the growth rate of steel enterprises increased by more than one digit.

From the perspective of cycle lengthening, remuneration has begun to decline since the whole industry has peaked in 2018.

According to statistics, 17 of the 35 steel enterprises mentioned above have fallen down in 2019. The annual report data of Fangda steel show that in 2019, the company paid 51 million 327 thousand yuan for employees and 162 million yuan for the same period in 2018.

The "cash wall" of Fang Da's company is also shrinking, especially at the level of ordinary employees.

According to the twenty-first Century economic report reporter, when the red envelopes were released in January this year, the cash workers of the northern heavy industries under the banner of Fang Da were 5000 yuan in cash, 10 thousand yuan in Northeast pharmaceuticals (000597.SZ), and 10 thousand yuan in Tianjin.

In 2017, when graphite electrodes surged, and billions of net profits were made every year, the annual red envelopes of Fangda 600516.SZ and Fangda steel once reached 50 thousand yuan and 30 thousand yuan respectively.

However, the management of Fangda steel is still holding the highest salary of the whole industry, even the entire A shares.

In 2019, Xie Feiming, the former chairman of the company, received an annual salary of 41 million 220 thousand yuan, and an annual salary of 5 directors and former directors exceeded 10 million yuan. In 2018, the annual salary of this person was 31 million 697 thousand yuan.

Dang Xijiang, chairman of Fangda carbon, received a 40 million 770 thousand annual salary in 2018 and dropped to 657 thousand yuan in 2019.

Off duty and self employment

After the May Day holiday, there was also a notice on Masteel's "consensus on the termination of labor contracts between employees and enterprises" and the policy of self employment, which once triggered the suspicion of layoffs.

In view of the company's performance, Masteel shares are the most outstanding listed steel companies in the first quarter of this year.

Net profit in the current period amounted to 377 million yuan, up 350.7% over the same period last year. How can we reduce the number of layoffs?

The above documents point out that attrition is to smooth the transformation of employees' development channels and promote the high quality development of enterprises. The attrition is divided into three categories: consensus termination of labor contracts (hereinafter referred to as synergy), departure from rest and self employment.

A contract with Maanshan Iron and Steel Co., Ltd. has no fixed term labor contract. The working staff who have worked continuously for 25 years can apply for a joint solution. The co workers can get 5 times the average salary of Ma'anshan's social wages. If the average monthly wage of employees is 3 times higher than that of Ma'anshan's monthly average wage, the economic compensation will be paid 3 times according to the average monthly wage of the city. The maximum period of payment for economic compensation is 12 years.

In order to encourage employees to cooperate, Maanshan Iron and Steel Co., Ltd. also issued different employment subsidies in accordance with the different months of co operation. If the employees were co operated in May, Ma Steel shares would issue a one-time subsidy of 50 thousand yuan, which gradually decreased with the extension of time and reduced to 20 thousand yuan in December 2020.

Employees can also choose to go to rest and start their own businesses. Those who have been working for 10 years or more in a company can choose to start their own businesses. The treatment of independent entrepreneurs is only to pay social security and provident fund for Maanshan Iron and steel group. They will no longer pay any other remuneration for a period of two years. After the expiry of the agreement, Ma steel will terminate the labor contract and pay no compensation.

In response to this, the Publicity Department of Masteel group verified the authenticity of the document to reporters on 8 May, and responded that "the allocation of resettlement is initiated by the company since 2016, after all, the industry is very competitive."

In April 29th, Ma Steel shares also announced that the company received the 123 million yuan financial subsidy issued by the Ma'anshan Finance Bureau. The subsidy project was to "resolve excess capacity and divert workers' fees."

Looking back at the historical announcement, it can be seen that from 2017 to 2019, the company received similar subsidies, such as the 170 million yuan paid in 2017 by the special fund for productivity award, and 155 million yuan and 176 million yuan in 2018 and 2019 respectively.

Therefore, there is little relationship between the staff diversion and the change of industry prosperity in Maanshan Iron and steel group.

Although the overall profitability of listed companies has been unable to compare with past vertices, such as the profit scale of over 2 billion yuan in the three quarter of 2018, but fortunately, the industry has not yet entered the profit and loss balance line.

1 yuan "warning line" embarrassment

Compared with Fangda and Masteel, Baotou Steel shares are not very optimistic.

In the first quarter of this year, Baotou Steel shares suffered a loss of 324 million yuan.

The two tier market is even more tragic. The three quarter of 2018 was the peak of the industry's profit scale, but Baotou Steel shares had fallen back as early as the three quarter of 2017.

"One fall is three years." An industry insider regrets.

Baotou Steel shares fell from a high of 3.15 yuan to 1 yuan, and in April 29th, it once hit a new low of 1.04 yuan.

According to the relevant provisions of the Shanghai Stock Exchange Listing Rules, if the daily closing price of a company's stock is lower than the face value of the stock for 20 consecutive trading days, it will touch the termination of the listing.

On the evening of May 6th, Baotou Iron and Steel Group announced that Baotou Steel Group, a controlling shareholder, plans to increase its shareholdings through the Shanghai stock exchange trading system within 12 months from the date of the announcement, with a sum of not less than 2 billion yuan and not more than 4 billion yuan.

You know, the total market capitalization of Baotou Iron and Steel Group is only 50 billion yuan, and the increase of 2 billion to 4 billion yuan is equivalent to the increase of 4% to 8% of the shares of listed companies.

As a result, the effect of the tray was not very satisfactory. After a slight rebound in May 7th, it fell again in May 8th. The reasons are not only industry and company factors, but also some "technical problems" of equity.

First of all, steel prices dropped in the first quarter compared with the same period last year. Compared with the coastal steel enterprises, the advantage of Baotou Steel's cost end is in coke, but coke prices continued to fall in the first quarter of this year, and the cost of ore has obviously recovered, which has superimposed higher freight charges and thus has adverse effects on the inland steel enterprises.

Secondly, Baotou Steel shares the highest number of shares in 35 listed steel enterprises, with a total capital stock of more than 45 billion 500 million shares, which is equivalent to two times the 600019.SH level of Baoshan Iron and steel group.

The high share capital makes the company's earnings per share largely diluted. Even if the profit scale of 2017 exceeds 2 billion yuan, its earnings per share is only 0.045 yuan, which can bring support to the company's share price.

Moreover, the company's single quarter net profit has shifted to a loss in the four quarter of 2019, and has continued to the first quarter of this year.

This is an old problem, Baotou Steel shares are also tackling. In March 23, 2020 this year, the company implemented the first repurchase, after the company planned to buy back the scale from 100 million to 200 million yuan. By April 30th, the company had repurchased 49 million 980 thousand yuan.

In contrast, the latest market value of the company is 51 billion 100 million yuan, and how many problems can be solved by repurchase at most 200 million yuan? Why not buy back when the profitability is high in 2017 and 2018?

As of the end of 2019, Baotou Steel shares still have 5 billion 885 million yuan in cash and cash equivalents. If the recent controlling shareholder's holdings of up to 4 billion yuan still do not work, what other actions will there be?