(Yicai Global) April 7 -- Central China's Hubei province, the former epicenter of the coronavirus pandemic, is encouraging businesses to restart production as the situation eases. Ensuring sustained operations and continuous cash flow are two big challenges for listed companies in the region.

Though the long-term fight against the epidemic has caused operational difficulties, some firms' employees have been working from home, ensuring some degree of business activities during the outbreak, Yicai Global learned.

"Our company made contingency plans at the end of January, and the government also introduced related policies, but the implementation of the policies takes time," said an executive at a listed services company in Wuhan, Hebei's capital.

Listed firms in Hubei have also eased their cash flow pressures by cutting expenditure and raising funds through financing. Hubei Sanxia New Building Material and Humanwell Healthcare have terminated or postponed on-going stock repurchases to save money.

Another method to ease cash flow pressure is direct financing. Though the province was hit hard by the virus, some pharmaceutical firms and makers of anti-Covid-19 supplies have seen a peak in demand and need huge funds to support research and development as well as new product manufacture. Chinese patent drugmaker Jumpcan Pharmaceutical and automatic temperature testing product supplier Wuhan Huazhong Numerical Control have chosen to issue new shares to raise money from the capital market.

Some firms have issued anti-Covid-19 bonds to secure much-needed funds based on the central government's preferential policies for companies in hard-hit areas. Hubei firms had issued 47 such bonds as of Jan. 23, and most plan to use the money to supplement liquidity or meet demand for working capital arising from containing the virus, per statistics from corporate information provider Wind.

But non-listed companies, small and medium ones in particular, have encountered more difficulties than listed firms. Some consumer goods makers have chosen to sell products on e-commerce platforms and even hired well-known internet celebrities to promote sales. But such cloud-based marketing does not apply to all industries.

The pandemic has had a greater impact on small and medium science and tech firms in Hubei, which have had to shelve their innovation process because they cannot resume operations for some time. Venture capital financing activities in Hubei's primary market are still in a cooling-off period because companies cannot negotiate with their investors for offline financing.

As of March 13, Hubei startups had received just five VC investments, raising a total of CNY82 million (USD11.6 million), compared with 68 investments, totaling CNY5.7 billion (USD805 million), in the same period of 2019, according to statistics from PEdata's private equity database Simutong.

"We're investing in previously won projects because we cannot do due diligence on site for new ones," Xinding Capital Chairman Zhang Chi told Yicai Global, adding that new PE and VC projects are still facing difficulties because of the pandemic.

Editors: Tang Shihua, Peter Thomas