In contrast, the system of domestic capital market is undergoing great changes. For the companies with medium or red chip structure, the current system structure and regulatory inclusiveness are more than ever welcome to return to domestic listing.
To the crossroads again
If the above changes give new consideration to Chinese stocks that have already been listed in the United States, it is said recently that Nasdaq will set a minimum threshold for the IPO scale of some countries and regions, which are slowly changing the choice of red chip companies to list in the United States.
Our statistics show that the vast majority of IPO companies with financing size below US $25 million are from China, and some companies with small size and unable to list in China are also keen to go to the United States for listing. Cao Gang, Ze Haos investment partner, told reporters.
The overseas listing environment is changing, and the domestic capital markets acceptance of the red chip structure and the return of Chinas equity has exceeded any time in history.
First, institutional arrangements. In 2018, the State Council and the CSRC successively issued the notice of the general office of the State Council Transmitting the CSRCs opinions on domestic issuance of shares or depository receipts by innovative enterprises and the announcement on relevant arrangements for domestic listing of innovative pilot red chip enterprises, which opened up institutional barriers for the return of red chip structure.
With the establishment and maturity of science and technology innovation board, the board that accepts red chip enterprises has also emerged. Up to now, science and technology innovation board has completed the listing of a red chip enterprise, namely China Resources Microelectronics. In addition, the gem registration system reform also mentioned to reserve listing space for red chip enterprises. In the future, regulators will also issue detailed listing rules for enterprises with red chip structure to facilitate the return of such enterprises to domestic listing.
It is worth noting that on April 30, the CSRC revised the contents of relevant arrangements for the listing of innovative pilot red chip enterprises in China, further optimizing the conditions for the return of red chip structure, especially the listed red chip structure enterprises to the domestic capital market.
Since last year, we have observed that many Chinese stocks have returned. With the implementation of the domestic registration system, the reform of the capital market is getting deeper and deeper, and the attraction for the return of red chips is also increasing. He Ying, KPMGs tax partner in Chinas M & A and restructuring, said.
In this case, it also makes a clear difference between 2015 and the return of the potential Chinese companies and red chip companies. The label of 2015s return is Privatization and dismantling of the red chip architecture, which is more efficient than who thinks carefully. In the process of struggling, many enterprises have never recovered.
The label of this return trend is that enterprises with red chip structure will be accepted by the system or listed overseas. The huge change of market supervision concept behind this means that domestic capital market welcomes such enterprises to return to domestic capital market very much. From the past returns of general shares, the domestic capital market environment is the most relaxed time. A partner of a large private equity institution in Beijing told reporters.
But according to the reporters sorting and interview, the channel of return is not open to all companies.
The top companies are facing the most abundant choice in history. Shanghai, Shenzhen, US and Hong Kong stocks are all options. The core of the choice is how to be more beneficial to the company. However, small and medium-sized IPOs that are not new economy and have technology content in the industry are not in trouble.
In fact, in addition to NASDAQ, the Hong Kong Stock Exchange also announced projects in 2019 that restrict the financing scale and have the possibility of becoming shell companies.
The competition among Shanghai, Shenzhen, US and Hong Kong stocks is the resources of head enterprises, new economy and high-tech enterprises. However, for some investment institutions driven enterprises seeking to go public, each exchange is not very popular, and many problems have arisen in the past few years. Cao Gang told reporters.
The same is true in the domestic capital market. The reporter learned from the insiders of the CSRC that although the return of the domestic capital market to red chip and Zhongwei shares is more relaxed than before, the CSRC also made it clear that based on the current policy requirements, there will not be a large number of red chip enterprises listed.
The person said: at present, the regulations on the listing of China equity or red chip enterprises in the domestic capital market show that high domestic listing requirements are set for technological innovation enterprises willing to be listed in the domestic market, which need to meet various innovation attributes and industry limits; at the same time, the listing of domestic sectors such as science and technology innovation board must also conform to the sector positioning and issuance of relevant sectors City conditions. On the whole, this adjustment is a measure to support science and technology enterprises. It is highly targeted and requires high standards, so there will be no large number of enterprises applying for it.