What Is Attracting High-Quality Enterprises To Return To A Shares?

The attraction of science and technology innovation board to domestic top technology enterprises has been further enhanced.

On January 12, 2021, Lenovo Group officially announced the IPO plan of Kechuang board. On the same day, the filing announcement of Beijing Securities Regulatory Bureau showed that Kuangshi technology had signed a coaching agreement with CITIC Securities in September 2020 and planned to be listed on the science and technology innovation board.

Lenovo Group is a global PC giant. In 2013, Lenovo computer sales ranked first in the world and became the world's largest computer manufacturer. The company landed on the Hong Kong Stock Exchange as early as 1994. Kuangshi technology is one of the "four little dragons of AI vision", with a valuation of 30 billion yuan. It launched an IPO of Hong Kong stock in 2019, but it has been stranded so far.

It is not difficult to see that both of them are domestic high-quality science and technology enterprises. At the same time, they announced their plans to list on the science and technology innovation board, which shows that the science and technology innovation board is very attractive.

"The purpose of the two IPO announcements is to raise funds. The background is that the mainland's capital market is heating up, and investment is active. The plan to return to A-share listing will help strengthen the close connection between the company and the capital market and enhance the company's value. " On January 13, Zhang Xiaorong, President of the Institute of deep science and technology, former senior vice president of well-known domestic securities companies and chief Internet analyst, said in an interview with 21st century economic reporter.

In addition, the reporter also noted that the two companies intend to adopt the way of CDR listing on the science and technology innovation board. Up to now, there are only No. 9 companies issued in the form of CDR on the science and technology innovation board. The return of Lenovo and kuangzhi indicates that the innovation and reform of China's capital market are deepening and the inclusiveness is further improved.

The attraction of science and technology innovation board to domestic top technology enterprises has been further enhanced. Visual China.

Return a in the form of CDR to meet the financing needs

On the evening of January 12, Lenovo Group announced that the board of directors had approved the possible issuance of China's depository receipts (CDR) and applied for listing and trading of CDR on the stock exchange's Kechuang board.

According to the proposal, Lenovo plans to issue no more than 10% of the company's expanded common shares. The funds raised will be used for R & D of technology, products and solutions, strategic investment in related industries and supplementary working capital of the company. The overall proposals for the above-mentioned issuance of CDR and listing on the science and technology innovation board depend on market conditions, the approval of shareholders and the necessary approval of relevant stock exchanges and regulatory authorities.

Hong Kong shares of Lenovo Group rose 8.93% to HK $8.05 at the end of January 12, with a total market value of HK $96.9 billion, according to wind data. Hong Kong shares of Lenovo Group continued to rise sharply at HK $8.83, or 9.69%, at the opening of January 13.

Yang Yuanqing, chairman and CEO of Lenovo Group, said that the A-share listing plan will help strengthen the close connection between the company's strategy and the booming domestic capital market, enhance the convenience for mainland investors to invest in Lenovo, further release the value of Lenovo, and better promote the digital and intelligent transformation and upgrading of all walks of life.

Kuangshi technology, another pioneer in science and technology innovation board, is a leading enterprise in the field of artificial intelligence. It is called "four little dragons" in AI computer vision field together with Shangtang, Yitu and Yuncong. According to the Hurun global Unicorn list 2020 released by Hurun Research Institute, Kuangshi has the highest valuation among the four little dragons, reaching 30 billion yuan.

However, the road to technology IPO is rather bumpy. In August 2019, Kuangshi fired the first shot of AI Unicorn listing and formally submitted its prospectus to the Hong Kong stock exchange. On October 8, 2019, the United States will include leniency in the "entity list" of export control. On February 25, 2020, the official website of the Hong Kong Stock Exchange showed that the initial IPO application of kuangzhi technology was invalid. Since then, the market has been particularly concerned about when to restart the listing plan.

At a media communication meeting at the end of July 2020, Kuangshi co-founder and CEO Yinqi once responded that from 2019 to 2020, the international environment has changed greatly. At present, the company has abundant cash flow, and listing is not particularly urgent. However, India said at the time that it had not terminated its listing plan. "We hope that the stock price will be stable after listing, or will we steadily promote the listing at the appropriate time. Listing is a manifestation of the company's business operation and governance confidence, and it is a means rather than an end."

Kuangshi technology has disclosed that it is a good opportunity for the development of Chinese science and technology enterprises to support and encourage the listing of "hard technology" enterprises on the science and technology innovation board, and Kuangshi is actively considering it. This time, Kuangshi accepted the listing guidance, which means that Kuangshi has been listed on the science and technology innovation board.

"The fact that the two companies choose to list on the science and technology innovation board shows that the attraction of the board is still relatively large. First, the trading of the science and technology innovation board is relatively active, and the other is that the valuation level is generally high. Domestic investors are more enthusiastic about investing in the listed companies on the science and technology innovation board, which has attracted more and more science and innovation enterprises to return." Yang Delong, chief economist of Qianhai open source fund, told reporters of the 21st century economic report.

It is worth noting that both companies plan to issue on the science and technology innovation board in the form of CDR. Among them, Lenovo is a red chip stock and Kuangshi is a company registered in the Cayman Islands. Prior to this, No. 9 company has become the first stock of CDR on the science and technology innovation board in this way.

Dong Dengxin, director of the Institute of Finance and securities of Wuhan University of science and technology, said in an interview, "in the past two years, China's regulation has given a more inclusive policy to the return of red chips. There are two ways to return red chips: IPO and CDR. In contrast, the IPO process is more complex, the threshold may be slightly higher, the threshold for CDR is relatively low, and the listing procedures are relatively simple. "

"China's existing laws and systems have strict regulations on the direct financing of such companies in the A-share market. Through CDR, these companies can bypass certain restrictions and realize direct financing in the mainland market to meet their financing needs. " Zhang Xiaorong said.

Dai Kang of GF Securities points out that the proportion of CDR issuance in the total equity is generally not very large. For example, the proportion of No.9 intelligent issuance is 10%, so the impact on capital is controllable. Meanwhile, compared with IPO, CDR has the advantages of fast process (no need to dismantle vie structure) and simultaneous financing at home and abroad.

Enhance attraction to high-tech red chip Enterprises

With the further improvement of the system and mechanism of the science and technology innovation board, more and more technology giants are returning to a shares.

Among them, attracting red chip enterprises to return is a highlight and an important mission of the establishment of the science and technology innovation board. From the initial support for the return of red chip enterprises to the effective introduction of policies supporting red chip enterprises by the regulatory authorities, the listing of red chip enterprises has become a footnote for the improvement of the inclusiveness of the science and technology innovation board.

In February 2020, China Resources micro, the largest power semiconductor enterprise in China, officially landed on the science and technology innovation board and became the "red chip first stock". In July 2020, the science and technology innovation board ushered in the chip foundry giant SMIC international, which successfully realized the "a + H" dual listing; in October 2020, the No.9 company went public, which created several "firsts" on the science and Technology Innovation Board: the first enterprise with an agreement control structure (VIE), the first enterprise to apply for public issuance of CDR depository receipts, and the first red chip with ab shares and employee options City company.

Prior to Lenovo Group, Geely Automobile, which is also listed in Hong Kong stock market, plans to list on the board in September 2020. Geely plans to issue no more than 1.731 billion shares initially, and plans to raise 20 billion yuan.

As for Geely's return a, some investment bankers pointed out that "Geely Automobile's landing on the science and technology innovation board reflects the transformation signal of China's self-made automobile industry. If such high-tech red chip enterprises as Geely Automobile return to a share, it will boost the domestic automobile industry. "

"On the one hand, the return of these red chips can enhance the valuation, because the valuation level of the mainland market is higher than that of Hong Kong stocks; on the other hand, it can increase the refinancing opportunities. Lenovo and other enterprises return to a shares in the form of CDR, which I believe will be welcomed by regulators and investors. " Dong Dengxin said.

In addition to the above-mentioned red chip companies returned to a, there are also U.S. stock companies set off a return upsurge.

According to the statistics of 21st century economic report reporters, Trina Solar and SMIC international entered the science and technology innovation board after the delisting of American stocks; Kexing biology, the first Chinese vaccine company listed in the United States, successfully landed on the science and technology innovation board in December 2020. Shengmei semiconductor, the leader of semiconductor cleaning equipment, is the first company to split American shares and land on the science and technology innovation board. The company passed the examination and approval of the municipal Party committee of the science and technology innovation board in September 2020. If it is listed successfully, it will be of great significance for the scientific and technological innovation board to explore the global development.

Industry insiders pointed out that with the gradual improvement of the science and technology innovation board system, "a + n" listing has no policy difficulties.

Zhang Xiaorong said, "the science and technology innovation board is an incremental board, with the new economy as an important feature. It has gathered a large number of high-tech industries and strategic emerging industry companies, showing a strong growth momentum. The registration system enables investors to focus more on the company level, and people will consider more long-term investment. Enterprises with core technology but long-term investment cycle can get more opportunities. For "new" companies, listing in the United States, Hong Kong, China and A-shares may become standard in the future. "

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