CNFC Overseas Fishing has received its second subsidy of 2021, despite being linked to illegal, unreported, and unregulated (IUU) fishing in a recent report.
The state-owned fishing firm featured recently in a Planet Tracker report listing publicly-traded firms with vessels that appear on the Combined IUU Fishing Vessel List, a consolidated record of all the main IUU vessel lists established by regional fisheries management organizations. CNFC Overseas Fisheries, listed on the Shenzhen Stock Exchange, was named along with Rongcheng Xinlong Aquatic Products Co. and Dongwon Industries.
In early December, CNFC announced to investors it bagged a CNY 117 million (USD 18.7 million, EUR 16.3 million) government subsidy through its parent company, China Agricultural Development Co. Earlier in 2021, it received an additional CNY 77.8 million (USD 12.4 million, EUR 10.8 million) payment from the Chinese government, allowing it to go from a loss to a profit of CNY 47.3 million (USD 7.6 million, EUR 6.6 million) profit in the first half of 2021.
CNFC said 73 percent of its revenue came from fishing, 26 percent of its revenue came from trading, and the rest came from its processing operations in H1 2021. In Q3 2021, CNFC lost CNY 32.3 million (USD 4.8 million, EUR 4.2 million), a 152.3 deterioration compared to Q3 2020. The company’s debt-to-assets ratio now stands at 41 percent.
CNFC Overseas Fishing has said it will seek to raise CNY 400 million (USD 64 million, EUR 56 million) through a placement of shares to 35 investors to fund construction of five new tuna vessels and processing facilities in Zhoushan, China’s busiest fishing port. The announcement pushed the firm further into a rush by Chinese seafood companies to cash in on tuna’s growing popularity in the world’s most-populous country. Ocean Family (Da Yang Shi Jia), which is planning an IPO, is also building a new tuna-processing capacity in Zhoushan. Better known as a processor of tuna for Japanese clients, Da Yang Shi Jia operates its own distant-water fleet and has recently ventured into the seafood import and distribution trade.
Aside from subsidies for its fuel and vessels, state-owned firms such as CNFC have historically enjoyed easier access to funds, given their liabilities are effectively guaranteed by the state. The increasing dominance of the state in the economy – and its absorption of stakes in private firms – have been growing trends in the Chinese economy under the government of Chinese President Xi Jinping. The percentage of loss-making firms in China surged from 12 percent in 2017 to 21 percent in 2020, according to Natixis, but their continued subsidization from the central government allows them to operate at a loss while establishing market share.
Photo courtesy of CNFC
