Original title: The issuance reserve price is reduced by up to 40%!A number of companies planning to be on the Beijing Stock Exchange have urgently adjusted their IPO plans. These three companies have already passed the meeting.
On the eve of the meeting, two companies to be listed on the Beijing Stock Exchange urgently lowered the issuance reserve price, and Silane Technology reduced the issuance reserve price by 40%. Tianma New Materials, which has already passed the meeting, also quickly announced a reduction in the issuance reserve price.
Recreation Guard, which set a record of “high price” for the issuance reserve price, also announced to revise the public issuance plan, but this time the company added an over-allotment option.
Emergency adjustment of the issuance reserve price
On the eve of the meeting, Zhongke Meiling and Silane Technology also announced the adjustment of the public offering plan of the Beijing Stock Exchange, mainly involving the adjustment of the base price of the offering.
Zhongke Meiling announced that according to the situation of the securities market and the need to maintain stock price stability, the company plans to adjust the issuance reserve price in the specific plan for this issuance and listing, that is, the issuance reserve price will be adjusted from 17 yuan/share to 16 yuan/share. Except for the above adjustments, other contents of the specific plan for the issuance and listing remain unchanged.
Silane Technology also stated that according to the situation of the securities market and the need to maintain stock price stability, the company plans to adjust the issuance floor price in the specific plan for this issuance and listing, from 7.8 yuan / share to 4.7 yuan / share, a decrease of 39.74%. Other contents of the specific plan for this issuance and listing remain unchanged.
Zhongke Meiling and Silane Technology have both successfully passed the meeting on August 5th. It is worth mentioning that Silane Technology is the second meeting this time.
Tianma New Materials also quickly announced the adjustment of the issuance reserve price a few days after the meeting, becoming the second company after Zecheng Electronics to lower the issuance reserve price after the meeting. Tianma New Materials will adjust the issue reserve price from 26.16 yuan / share to 21.38 yuan / share, a reduction of 18%.
Except for the adjustment of the issuance reserve price, the other contents of the specific plan for the issuance and listing of Tianma New Materials remain unchanged. After the issuance reserve price is lowered, the company expects that the total amount of funds raised will also decrease, and the company will adjust the planned investment amount of the project accordingly.
Tianma New Materials’ adjustment to the public offering plan still needs to be reviewed and approved by the company’s shareholders’ meeting, and the registration application will be submitted to the China Securities Regulatory Commission after the adjustment of the base price of the offering is passed. Previously, Zecheng Electronics adjusted the issuance reserve price after the registration application was approved by the China Securities Regulatory Commission, and the public issuance process was therefore extended.
Recently, the issue price of new shares on the North Exchange is generally determined at or slightly higher than the issue reserve price. Lowering the issue reserve price means lowering the issue price. The above-mentioned measures of companies to be listed on the Beijing Stock Exchange before the issuance may be related to the frequent breakouts after the listing of new shares.
On the secondary market, Zecheng Electronics has continued to fall below the issue price since its listing. After barely holding the issue price of 10.8 yuan at the close on August 4, the stock closed below the issue price again on August 5.
Some companies planning to apply for listing on the Beijing Stock Exchange have already acted in advance to adjust the issue reserve price. After receiving the first round of review and inquiry letter, Qiule Seed Industry recently announced the adjustment of the public offering plan of the Beijing Stock Exchange, and the base price of the offering will be adjusted from 7.9 yuan per share to 6 yuan per share.
Industry insiders believe that the recent decline in the market has caused companies to repeatedly lower the issue price. Enterprises should adjust the issue reserve price before the meeting, so as not to affect the process of public offering after the meeting.
Added “green shoes” mechanism
Recreation Guard, who is in the inquiry stage, has also revised the public offering plan of the Beijing Stock Exchange, mainly setting up an over-allotment option (also known as the “green shoe” mechanism).
The company’s previous issuance plan is: based on the company’s current total share capital of 133.6 million shares, the number of shares to be issued does not exceed 44.53 million shares, which is not higher than 25% of the total share capital after the issuance.
The specific plan for the revised issuance is as follows: the proposed issue does not exceed 38.7217 million shares (without considering the exercise of the over-allotment option), or not more than 44.53 million shares (including the exercise of the over-allotment option). The company and the lead underwriter may choose the over-allotment option according to the specific circumstances, and the number of shares issued by the over-allotment option shall not exceed 15% of the shares issued this time (that is, not more than 5,808,300 shares).
The reserve price of Recreation Guard is still RMB 77.68 per share. The company also stated that the final issue price will be determined by the board of directors and the lead underwriters authorized by the general meeting of shareholders to comprehensively consider market conditions, company growth and other factors as well as the inquiry results when issuing, and negotiate with reference to the transaction price for a certain period before the issue; In the event of major changes in the environment, the company will adjust the issuance reserve price as appropriate.
It is worth noting that the issuance reserve price of Recreation Guard has set a record for the issuance price of new shares on the Beijing Stock Exchange and the issuance reserve price of companies to be listed on the Beijing Stock Exchange. In the secondary market, after the company announced the above-mentioned issue reserve price, the company’s stock price fell, and the company’s issue reserve price was significantly higher than the closing price (57.97 yuan) the day before the company’s trading suspension.
In the listing review and inquiry stage, whether the issuance reserve price is reasonable and whether to set up an over-allotment option are mandatory questions. In the first round of inquiries, the company was pointed out that it did not have an over-allotment option, so it was asked to explain the basis for determining the issuance reserve price, its rationality, and its relationship with the trading price before the suspension; whether the existing price stabilization measures could be effectively implemented Stabilizing effect; reason for over-allotment option not considered. The company is also required to comprehensively analyze and explain whether the current issuance scale, pricing, price stabilization measures and the unapplied over-allotment option are unfavorable to the public offering and listing on the Beijing Stock Exchange in light of the investment value of the enterprise and the restricted sale of shares. influences.
Before the implementation of the public offering of the new shares of the Beijing Stock Exchange, all the over-allotment options were set up. The industry believes that the “green shoe” mechanism has effectively played a role in stabilizing the stock price. Many new shares listed in July this year, due to continuous breakout after listing, many companies have not exercised or not fully exercised the over-allotment option.
Chenguang Cable, which was listed on July 12, recently announced that as of the end of July 25, 2022, the authorized lead underwriter has used part of the funds obtained from the over-allotment of this issuance to purchase the company from the secondary market through auction transactions. There are 7 million shares, and the number of shares purchased is the same as the number of over-allotment options implemented this time. Therefore, this over-allotment option has not been exercised, and there is no new issue of shares involved.
Zecheng Electronics, which was listed on July 6, has partially implemented the over-allotment option: As of the end of August 4, 2022, Industrial Securities has used part of the funds obtained from this over-allotment issue to trade from the secondary market through auction transactions. The market bought 1,057,200 shares of the issuer, and the issuer added 1,192,800 shares at the issue price of 10.80 yuan per share, thus expanding the total number of shares issued to 16,192,800.