Top Shenzhen companies get loans priority
Shenzhen International Trust and Investment Corp is providing priority loans to Shenzhen's best performing listed companies.
With the backing of the Shenzhen municipal government, the non-bank financial institution has called on the top 20 Shenzhen-listed companies to apply for loans to finance working capital.
Companies eligible to apply for the loans have been rated by the Shenzhen Stock Exchange as the best performers for the past year, based on financial statements, earnings prospects and repayment ability.
Lighting product maker Foshan Electrical and Lighting, which trades A and B shares in Shenzhen, topped the list.
The company saw profit rise 32.36 per cent last year to 170.23 million yuan (about HK$157.97 million).
Other B-share companies on the list include Guangdong Electric Power Development, Shenzhen Fiyta Holdings, Shenzhen Konka Electronic Group, Chiwan Wharf Holdings and Chiwan Petroleum Supply Base.
An analyst said: 'For Shenzhen International, it is a commercial decision to have all the best companies in town applying for loans.
'From the viewpoint of the Shenzhen municipal government, this is a pro-active move towards lending its weight to enterprises.' Shenzhen International is indirectly owned by the Shenzhen municipal government through Shenzhen Investment Management Co.
An official with Chiwan Wharf Holdings, who was also a director at Chiwan Petroleum Supply Base, said the move would ease short-term funding needs.
'This underscores the government's support for the bigger and better enterprises,' he said.
The Chiwan Wharf official said the companies had not applied for the loans because they had no need for them at present.
He was expecting other forms of support, such as equity investment for future projects in case massive development funds were needed.