Just now, the central bank and the State Administration of Foreign Exchange jointly launched a crazy policy to directly relax the cross-border financing market, which has brought super benefits to countless overseas companies!
On April 15, the two departments officially issued a notice that the overseas loan leverage ratio of domestic wholly foreign-owned banks, Sino-foreign joint venture banks, and domestic branches of foreign banks would be directly raised from 0.5 to 1.5, a full three-fold increase, an increase of up to 200%!
At the same time, the Export-Import Bank’s overseas loan leverage ratio has also been increased from 3 to 3.5, and the minimum loan balance limit of a single bank has been directly raised from 2 billion yuan to 10 billion yuan. This is unprecedented!
Many people may not understand, what does this adjustment mean?
To put it simply, the “loan ammunition” in the hands of foreign banks is directly doubled and expanded!
In the past, banks could only lend 0.5 yuan in overseas loans for every 1 yuan of tier-one capital. Now, they can lend 1.5 yuan. The scale of overseas loans that can be issued is directly expanded by three times. Enterprises no longer have to worry about running out of money or insufficient quota for overseas financing!
This wave of policy dividends is not just a general talk, but targeted at these industries and companies. Hurry and see if your company is included!
1. Belt and Road Infrastructure/Overseas Engineering Enterprises
The first to bear the brunt are the central enterprises and leading private enterprises that are deeply involved in overseas infrastructure and undertake Belt and Road projects!
China Communications Construction (601800), China Railway Group (601390), China State Construction (601668), and Northern International (000065).
Whether it is overseas road construction, bridge construction, power station repair, or large-scale project contracting, these types of enterprises have always had huge capital needs, and in the past they were often limited by overseas financing quotas.
Now that foreign banks’ lending quotas have been liberalized, financing efficiency has been greatly improved, and capital costs have dropped directly. Project advancement will be accelerated across the board, and order fulfillment and profit realization will reach a new level!
2. Leading high-end manufacturing exports
Manufacturing companies that go abroad, such as new energy, engineering machinery, home appliances, and automobiles, will usher in major benefits!
Sany Heavy Industry (600031), CRRC (601766), Daikin Heavy Industries (002487), Dongfang Electric (600875), and Midea Group (000333).
In recent years, domestic manufacturing has gone crazy overseas. Building overseas factories, mergers and acquisitions, expanding global channels, and laying out overseas production lines all require a large amount of cross-border financial support.
After the policy is implemented, the financial bottleneck for overseas expansion of enterprises has been broken, and they can more smoothly seize the global market, increase their international share, and directly press the accelerator button for performance growth!
3. Overseas development enterprises of energy resources
Overseas resource development enterprises such as oil and gas, mining, and electric power are capital-intensive industries. The development and operation of overseas projects are inseparable from long-term and stable cross-border financing.
CNOOC (600938), PetroChina (601857), China Molybdenum (603993), Zijin Mining (601899), and China Oilfield Services (601808).
This increase in the leverage ratio can effectively alleviate the company’s overseas funding pressure, shorten the project development cycle, optimize cash flow, help companies accelerate global resource deployment, and directly maximize long-term profitability!
4. Leading foreign trade/cross-border e-commerce companies
Enterprises engaged in global trade and cross-border e-commerce finally have the good news of capital turnover!
Anker Innovation (300866), Focus Technology (002315), Commodity City (600415), Jihong Holdings (002803), SF Holding (002352).
Overseas stocking, overseas warehouse construction, cross-border settlement, and overseas market expansion all require working capital support.
The liberalization of overseas loan quotas for foreign banks will make financing more convenient and lower-cost, which can greatly ease the capital turnover pressure of enterprises, increase the capital turnover rate, and further expand the scale of overseas business!
5. Transnational operations and foreign-funded affiliated enterprises
Relying on the global service network of foreign-funded banks, the cross-border capital allocation and overseas project financing of multinational companies and foreign-funded enterprises will be more flexible. Whether it is overseas investment or cross-border business expansion, they will receive more sufficient financial support and their operating efficiency will be greatly improved!
6. The banking sector directly benefits
Domestic foreign-funded banks, Sino-foreign joint venture banks, and the Export-Import Bank directly reap policy dividends!
HSBC Holdings (00005.HK), Standard Chartered Group (02888.HK), Bank of China (601988), Xiamen International Bank, Shanghai Pudong Development Bank (600000).
The expansion of overseas loan business has brought about growth in interest income, cross-border settlement, financial services and other intermediary business income, opening up new space for performance growth. Bank performance is expected to continue to recover!
Industry insiders bluntly said that this is a key move for the country to help enterprises “go global”. It not only clears up cross-border financing blockades, but also accelerates the globalization of Chinese enterprises, which will be a long-term benefit to cross-border trade and overseas investment!
Next, the capital market will also usher in a wave of market conditions. The above-mentioned benefit sectors and leading companies will most likely become the focus of market attention!
With this wave of super dividends, which type of companies are you most optimistic about?
Let’s chat in the comment area!
