Original title: How to apply the listing rules for the first spin-off of the Beijing Stock Exchange after the opening of the Beijing Stock Exchange
Introduction: The first case of “A North Demolition” has attracted much attention from the market, and once again the issue of whether the company’s listing on the North Exchange needs to comply with the spin-off and listing rules is thrown out.
On the evening of November 15th, Nangang (600282.SH) issued a spin-off and listing plan, and the company plans to spin-off its holding subsidiary Gangbao shares to the Beijing Stock Exchange.
Although Gangbao (834429.NQ), which was subsequently listed on the NEEQ, failed to simultaneously disclose relevant content on its official website, which constituted a violation of information disclosure, the National Equities Exchange and Quotations quickly adopted regulatory measures. However, it still constitutes the case of the first A-share listed company to spin off a subsidiary to be listed on the Beijing Stock Exchange after the opening of the Beijing Stock Exchange.
On November 17, driven by the expectation of listing on the Beijing Stock Exchange, Gangbao shares surged after the resumption of trading.
Fosun’s steel companies ate “A Demolition North” head soup
The National Equities Exchanged Corporation will implement an emergency suspension of Gangbao shares before the market opens on November 16, 2021, and require the listed companies and the sponsoring brokers to supplement relevant announcements, truthfully explain the specific progress of the incident, and fully remind the relevant risks. On the same day, Nangang also received a supervisory work letter from the Shanghai Stock Exchange.
But even if the letter was punished for violation of the rules, it could not conceal the market’s pursuit of the first “A Demolition North” target. On November 17, one day after the emergency suspension, the stock price of Gangbao shares still rose sharply. The company’s stock price rose from 10 yuan per share before the suspension to around 15 yuan per share. As of the close of November 17th, Gangbao shares closed up 50.1%, and the company’s total market value increased from about 1.5 billion yuan to 2.2 billion yuan.
Public information shows that Nanjing Iron and Steel is one of the world’s largest single plate production bases and a domestic competitive special steel long product base, with a comprehensive production capacity of 10 million tons of steel per year.
According to the announcement of Nangang Steel, Gangbao focuses on the online retail and personalized customization of steel products such as medium and heavy plates, and has built a professional steel e-commerce platform “Jinling Steelbao.com”. The specific business includes new retail. Business and C2M customized business. It is worth mentioning that, for upward penetration of equity, the actual controllers of the two companies, Nangang and Gangbao, are Guo Guangchang, the executive director and chairman of Fosun International Co., Ltd.
“Gangbao uses an e-commerce platform to solve the problem of asymmetry of supply and demand information between upstream production and circulation companies and downstream consumer companies, especially the application of advanced technology to solve the problem of storage management and delivery.” Nangang said.
“Under the traditional steel sales model, the demander usually goes to the factory’s warehouse or dealer to find goods. Now many steel companies are building online sales companies or steel trading companies to realize the docking with downstream end users on the platform. Realize the closed-loop transaction of steel products.” Some people in the steel industry introduced to the 21st Century Business Herald reporter. The e-commerce of business saves a lot of labor costs, the sales process is further shortened, and there is no opaque price, which improves the overall operation and management efficiency of the enterprise.
However, people in the industry also said that the steel enterprise e-commerce platform is currently the standard configuration of many large steel companies, and there is no shortage of large-scale platforms such as steel network and Lange steel in the steel e-commerce. Gangbao shares are in the industry. The particularity is not significant.
According to the 21st Century Business Herald reporter, there is a high probability that Gangbao shares will be listed on the Beijing Stock Exchange under the first set of financial standards in the future.
According to the financial data of Gangbao Co., Ltd., from 2018 to 2020, the company’s operating income reached 5.61 billion yuan, 5.62 billion yuan and 6.61 billion yuan, and the current period achieved net profits of 61.47 million yuan, 65.76 million yuan and 81.33 million yuan respectively. Calculated based on the net profit attributable to the company’s common shareholders, the company’s weighted average return on net assets in 2020 is 21.22%. The total market value before the suspension on November 16 has exceeded 1.5 billion yuan.
These are all in line with the first set of financial standards listed on the Beijing Stock Exchange, that is, “The estimated market value is not less than 200 million yuan, the net profit in the last two years is not less than 15 million yuan, and the weighted average return on equity is not less than 8. %, or the net profit in the most recent year is not less than 25 million yuan and the weighted average return on equity is not less than 8%”.
How do the spin-off listing rules apply to the Beijing Stock Exchange?
The first case of “A North Demolition” has attracted market attention, and once again the issue of whether the company’s listing on the Beijing Stock Exchange needs to comply with the spin-off and listing rules has been thrown out.
In December 2019, the China Securities Regulatory Commission officially issued the “Regulations on the Pilot Domestic Listing of Subsidiaries of Listed Companies in the Spin-off” (referred to as the “Separation Regulations”), which provides a basis and policy support for A-share companies to spin off their subsidiaries to list domestically. , Also listed various indicators required for spin-off and listing, including: continuous listing for 3 years; continuous profit for the last 3 years; after deducting the net profit of the spin-off subsidiary, the company’s 3-year cumulative net profit is not less than 600 million Yuan; the net profit of the spin-off subsidiary in the most recent year shall not exceed 50% of the parent company’s net profit, and the net assets shall not exceed 30%, etc.
When the “Separation Regulations” were issued, the Beijing Stock Exchange had not yet appeared. How the previous policy applies to the newly born Beijing Stock Exchange has attracted attention.
In September this year, the China Securities Regulatory Commission also stated that, given that the “Regulations on the Pilot Domestic Listing of Subsidiaries of Listed Companies in the Spin-off of Subsidiaries” were formulated without transfer listings, whether transfer listings need to meet the spin-off requirements is the “Regarding National SMEs” “Guiding Opinions on the Transfer of Listing of Companies Listed on the Share Transfer System” and new issues after the release of specific transfer rules. The market is more concerned about this, and the China Securities Regulatory Commission has conducted in-depth research and will disclose the relevant system and rules to the market in a timely manner to protect the legitimate rights and interests of investors, especially small and medium investors.
Compared with Gangbao, the previous case of Zhongbing Communication (837567.NQ) “stepping on” to apply for a listing on the selected layer is more typical.
On November 5, 10 days before the opening of the Beijing Stock Exchange, China Soldier Communications, a company listed on the innovation layer of the New Third Board, announced that it had submitted application materials for the public offering of shares to the National Equities Exchange and was listed on the select layer, and initiated the suspension of trading. program. On November 12, the application for listing on the select floor of China Soldier Communications was accepted. The company’s controlling shareholder is North Navigation (600435.SH), a listed A-share company.
According to the “Separation Regulations”, it can be found that although North Navigation has been listed for three years and has been profitable for the past three consecutive years, the company’s cumulative net profit in the past three years is only 150 million yuan, and the cumulative net profit after deducting non-recurring gains and losses is even greater With only less than 80 million yuan, even if the net profit of China Soldier Communications is not deducted, it cannot meet the split requirements.
The bigger problem is that the performance of subsidiaries is very high, and China Soldier Communications is the “performance cow” of North Navigation. The company’s net profit attributable to shareholders of the listed company in 2020 will reach 201 million yuan, which is more than three times the net profit of North Navigation. As of the end of 2020, the net assets of China Soldier Communications have reached 1.046 billion yuan, and the net assets of North Navigation during the same period are only 2.220 billion yuan. It can be said that from the criteria of “the net profit of the spin-off subsidiary in the most recent year shall not exceed 50% of the net profit of the parent company, and the net assets shall not exceed 30%”, the A-share listed company North Navigation does not comply with the domestic listing of China Soldier Communications. Related requirements.
“Zhongbing Communication rushed to apply for the selection layer before the opening of the Beijing Stock Exchange and was accepted. It cannot be ruled out that there is an idea of’gamble’ in the policy convergence period. This is because once the application is accepted, Zhongbing Communication will act as a fine The selected company under review has also become a listed company of the Beijing Stock Exchange.
Some insiders suggested that companies that did not meet the spin-off conditions, such as Baterui (835185.NQ), Senxuan Pharmaceutical (830946.NQ), and Suzhou Shares (430418.NQ), would move to the selected layer after listing. For listing on the Beijing Stock Exchange, considering the fairness before and after the market, it should adopt the principle of dividing the old and the old to exempt the subsidiary companies of some listed companies that have planned a select-tier IPO from the spin-off review.
“In the future, when the new regulations are revised, it will not be ruled out that the new and the old will be divided. This batch of companies that have been listed on the Beijing Stock Exchange or have been accepted should not be restricted. However, in the future, relevant companies will transfer to the Science and Technology Innovation Board or start a business. When the board is listed, it will not be affected, and the supervision needs to give a clear answer.” A domestic small and medium-sized brokerage firm said the NEEQ business personnel.
Zhou Yunnan, founder of Beijing Nanshan Investment, also said that the new law should consider the new and old divisions, that is, companies that have been accepted before the implementation of the new law can be exempted, and companies that declare afterwards must comply with the new spin-off rules.
In Zhou Yunnan’s view, it is expected that after the re-revision of the spin-off rules, the NEEQ listed companies’ applications for listing on the Beijing Stock Exchange will be included in the management measures. The company has spun off a large number of subsidiaries and listed on the New Third Board and reported the listing of the Beijing Stock Exchange, squeezing the remaining financing space for small and medium-sized enterprises.
“Squeezing the financing space is one aspect. The spin-off rules are supposed to ensure that after the spin-off, the parent and subsidiary companies have the ability to independently face the market. After the spin-off is not possible, the parent company will become an empty shell, which is also harmful to the interests of investors. “A senior investment banker in Beijing said.
(Author: Man Le Editor: Zhang Yujie)