Benefits Street – a notorious UK TV show – depicted a street in Britain where residents had become dependent on government handouts. Our research into Chinese corporates shows an increasingly similar picture. We estimate almost a quarter of Chinese companies (ex-financials, property) derived at least 20% of profit from direct subsidies, and hidden subsidies mean we are likely underestimating the full impact. Spring Airlines, ZTE, Beijing Capital Int’l Airport and Geely Autos are some of those highlighted in our report. Shareholders should not pay demanding valuation multiples for companies reliant on government largesse.