One of China’s leading fishing companies has booked more than CNY 100 million (USD 15.1 million, EUR 12.8 million) in government subsidies for 2017.
CNFC Overseas Fishery Co., Ltd announced to its shareholders that the payment was received and would have a “material effect” on the firm’s profits for the year.
CNFC badly needed a break after seeing the price of its shares collapse from CNY 14.00 (USD 2.11, EUR 1.80) in June to CNY 8 (USD 1.21, EUR 1.03) in July due to ongoing uncertainty over the risk posed to the company by a lawsuit filed against one of its subsidiaries. The company’s valuation dive also coincided with an ongoing examination of the company’s books by the Chinese stock market regulator.
Government subsidies have become vital to the profitability of China’s large state-owned fishing firms, which also benefit from access to low fuel prices for their long-haul fishing operations in international waters.
CNFC had a negative operating margin of 8.8 percent in 2016, but still managed to turn a profit margin of 5.27 percent.
