The Financial Effects Analysis Of Iron And Steel Enterprises Under Supply-side Structural Reform

As an important representative of China's secondary industry,the steel industry is essential for the China's national economy and a pillar industry in the process of industrialization.In recent years,the steel industry has experienced rapid expansion of production capacity.Meanwhile,the industrial concentration has also been decreased.The homogenization of the products have become more and more serious.At the same time,under the new normal of China's economy,the proportion of the tertiary industry's service industry has surpassed that of the secondary industry,and it has become a new driving force for economic growth.These changes have decreased the demand of the steel and made consumption growth weaker.Therefore,China's enterprises are facing an unprecedented contradiction between supply surplus and demand reduction.In November 2015,President Xi Jinping took the leading in proposing "supply-side structrual reforms",which is of great significance to enhancing the sustained and steady development of the Chinese economy.In January 2016,China clarified the five major tasks of supply-side reforms: "de-leverage,de-capacity,destocking,cost reduction,and short-board",which is able to help energy-oriented enterprises to transform and upgrade.As a strategic focus of China's supply-side structural reform,the steel industry is closely related to the effectiveness of the reform.In this paper,we have adopted the factor analysis to analyze the the changes of financial performance of steel enterprises before and after the supply-side reform.Based on the test of the policy effects,it provided the data support for the development of the subsequent reforms.We analyze the changes of the Shougang Steel in financial performance before and after the supply-side reform as an example of our proposed method.Then we summarize its advantages and disadvantages,and finally propose improvement suggestions.Firstly,we have illustrated the background,the definition and the meaning of financial performance evaluation of the supply-side reforms.Then we have also explained the practice of the supply-side reform of the steel industry,as well as the principal-agent theory and the new supply theory.On this basis,we have designed the financial performance index system of iron and steel enterprises from the perspective of supply-side reform,and adopted the factor analysis to analyze and evaluate the financial performance of steel enterprises for 10 years before and after the supply-side reform.Finally,we have taken the Shougang Steel as an case in our paper.In this paper,we have analyzed the changes in the financial performance of Shougang Steel before and after supply-side reforms,as well as the advantages and disadvantages.In addition,we have put forwards some suggestions for expanding the advantages and improvements of the Shougang Steel,as well as continuing to promote the supply-side reforms from four aspects of enhancing asset liquidity,improving profitability,enhancing operational capacity,and optimizing asset structure.Through the research,we have drawed the following conclusions: Judging from the changes in the comprehensive scores of the factors before and after the reform of the supply side of the iron and steel enterprises,the supply-side reform has played a positive role in the development of the steel industry,and the steel industry should continue to work hard to promote supply-side reform.The profitability,the asset liquidity and the operational capacity of the Shougang Steel needs to be strengthened after the supply-side reforms.In addition,the asset structure is at risk in some degree.Shougang Steel should grasp the advantage of strong profitability,expand the gap with other steel enterprises,and strive to improve the operational capacity of enterprises and enhance their ability to resist their risks.