On the first day of listing, a company announced that it would use 4.5 billion over raised funds to buy financial management, which aroused thousands of waves.
Under the background of the reform of registration system and the marketization of inquiry mechanism, there have been “three highs” phenomenon of high issuance price, high P / E ratio and superb raising of new shares recently.
According to the statistics of the securities times, according to the comparison between the actual fund-raising amount and the funds required for the planned fund-raising projects, 80% of the IPO projects of Listed Companies in Shanghai and Shenzhen have been over raised since this year. Data show that among the 465 listed enterprises in Shanghai and Shenzhen this year, 398 projects are expected to raise 294 billion yuan, the actual fund-raising is 402.1 billion yuan, and the over raised funds account for 108.1 billion yuan, accounting for about 37%.
The phenomenon of over raising of new shares has also existed in the market before. The super high price issuance of companies represented by Shenzhen Hepalink Pharmaceutical Group Co.Ltd(002399) and other companies in that year, as well as the phenomenon of superb raising, also caused heated discussion in the market.
GUI Haoming, a senior market person, said in an interview with the securities times that the over raising phenomenon reflects that there is still a certain deviation between the market expectation and the actual situation of enterprises in the capital market. This requires enterprises to make better planning and further improve the level of information disclosure. The phenomenon of over raising has its positive significance and some negative effects, which need to be treated dialectically.
“The marketization of IPO pricing is the result of the final vote of investors. The so-called excess fund-raising is the voluntary choice of investors and a pure market behavior. Adhering to the reform of registration system, we should adhere to the basic principle of marketization.” Dong Dengxin, director of the Institute of Finance and securities of Wuhan University of science and technology, pointed out that the higher the degree of marketization of IPO, the greater the independent option of investors to vote with their feet or hands, which will have a substantial impact on the pricing of IPO in the market.
Chen Xin, a professor at Shanghai Institute of advanced finance of Shanghai Jiaotong University, believes that the over raising phenomenon has damaged the interests of minority shareholders to a certain extent. If there is no suitable fund-raising investment project, the utilization efficiency of funds will be reduced.
more than 80% of enterprises in Shanghai and Shenzhen stock markets raised too much during the year
As of December 22, a total of 506 companies (including those listed on the Beijing stock exchange) had been listed this year, including 465 listed companies in Shanghai and Shenzhen, with a total fund-raising of 518.711 billion yuan.
It is worth noting that, compared with the fund-raising amount of the company’s projects, more than 80% of the newly listed companies in Shanghai and Shenzhen this year have raised too much. According to the data, as of December 22, of the 465 newly listed companies in Shanghai and Shenzhen, 398 IPO projects were over raised, accounting for 85%.
The above 398 companies are expected to raise a total of 294 billion yuan, but in fact, the fund-raising reaches 402.1 billion yuan, and the over raised funds account for about 37% of the total expected fund-raising scale of the project.
Specifically, Baiji Shenzhou, the leader of innovative drugs, topped the list of over raised scale, and the baiji Shenzhou project raised 20 billion yuan. However, after exercising the over allotment option in full, the total fund-raising of Baiji Shenzhou reached 25.484 billion yuan, and the over raised scale was 5.484 billion yuan, but the over raised proportion was not high.
For the two new shares that have successively refreshed the issuance price record in history, the over raised amount ranks second and third respectively. Among them, the over raised amount of Hemai shares, the most expensive new share in history, is 5.02 billion yuan, and the over raised amount of Sino Biological Inc(301047) the second highest priced new share in history is 4.08 billion yuan. The over raised scale of DEA shares, Cofoe Medical Technology Co.Ltd(301087) , Dongxin shares, Liaoning Chengda Biotechnology Co.Ltd(688739) etc. is more than 2 billion yuan.
From the proportion of over raised funds in the total fund-raising, the overall over raised level of A-Shares is not very obvious. There are only 42 companies with an over raised proportion of 1 time or more, accounting for 9% of the listed companies in Shanghai and Shenzhen this year. Among them, Hemai shares topped the list of over raising proportion this year, with an over raising proportion of 9 times.
Sino Biological Inc(301047) the proportion of over raising exceeded 4 times. The company raised 900 million yuan for its projects, but the total amount raised reached 4.98 billion yuan. The over raised proportion of core guide technology, Hangzhou Alltest Biotech Co.Ltd(688606) , Dongxin shares and Guangting information is more than 3 times.
Dong Dengxin, director of the Institute of Finance and securities of Wuhan University of science and technology, pointed out that the marketization of IPO pricing is the result of investors’ final vote. The so-called over fund-raising is the voluntary choice of investors and a pure market behavior.
Dong Dengxin believes that after the offline inquiry rules are improved, it can be expected that the pricing of new shares will be closer to the market, and the pricing of new shares will be more balanced, more reasonable and more rational. Naturally, it will reduce the price difference between the primary and secondary markets, and increase the risk of subscription of new shares. The recent breaking of new shares and IPO over raising in the market are actually normal phenomena.
Wang Jiyue, a well-known investment banker, pointed out that the over raising is mainly due to the rules. If a listed company needs to issue only 1 million shares in order to reduce the dilution of the shareholding ratio of original shareholders, but 1 million circulating shares do not meet the proportion of social public shares required by the listing rules, so the company has to issue at least 10 million shares, resulting in the temporary idleness of funds.
over raised investment bank income
As a related party of interest, the recommendation and underwriting fees of investment banks are linked to the fund-raising amount of listed companies. With the increase of over raised IPOs, the income of investment banks is also rising.
According to the reporter of the securities times, as of December 22, Citic Securities Company Limited(600030) projects had the largest number and amount of over raised 398 IPO projects. Among the listed companies sponsored by Citic Securities Company Limited(600030) , 48 have over raised, with a total over raised amount of 20.981 billion yuan, including 6 projects such as Hemai shares, Sino Biological Inc(301047) , Liaoning Chengda Biotechnology Co.Ltd(688739) , Wayz Intelligent Manufacturing Technology Co.Ltd(688211) , Tianneng Battery Group Co.Ltd(688819) , Puya Semiconductor (Shanghai) Co.Ltd(688766) with an over raised amount of more than 1 billion yuan.
The total over raised amount of the projects sponsored by Huatai Securities Co.Ltd(601688) and China International Capital Corporation Limited(601995) exceeded 10 billion. Among the projects sponsored by Huatai Securities Co.Ltd(601688) , Haili wind power, Zwsoft Co.Ltd(Guangzhou)(688083) , Jiangsu Hualan New Pharmaceutical Material Co.Ltd(301093) , Huaqiang technology and other four projects raised more than 1 billion yuan. Among the projects sponsored by China International Capital Corporation Limited(601995) , the over raised amount of Baiji Shenzhou, Xinjiang Daqo New Energy Co.Ltd(688303) , Rumere Co.Ltd(301088) and other projects exceeded 1 billion yuan.
growing industries attract more money
By industry, computer, light industry manufacturing, electrical equipment, national defense and military industry, medicine and biology and other industries are more prone to over raising, and these industries are all industries with high growth.
In the computer industry, the over raised amount of listed companies this year reached 7.137 billion yuan, and the over raised proportion was close to 68%; The over raised proportion of light industrial manufacturing exceeds 60%; The proportion of over raised funds in electrical equipment, national defense and military industry, medicine, biology, electronics and other industries exceeded 50%.
There are few cases of over raising in traditional industries such as banking, non bank finance, transportation, media and mining, even if the proportion of over raising is not high.
what did you do with the over raised funds?
In the market-oriented issuance of registration system, it is difficult to avoid over raising or insufficient raising. However, if over raising occurs, how to use the over raised funds? This issue is a topic of great concern to investors.
After the over raising of the “most expensive” new stock Wo Mai shares in history exceeded 5 billion yuan, it immediately decided to carry out cash management of the large amount of over raised funds, which pushed the discussion of relevant topics to the forefront.
The reporter checked the announcements of Listed Companies in recent years and found that if the IPO of listed companies is over raised, the over raised funds generally have several directions, including permanent replenishment of working capital, cash management, investment and construction of new projects, etc.
The reporter found that from the situation of the companies that issued the announcement on the investment of over raised funds in December this year, most of them are permanent replenishment of working capital and cash management. However, there are still some companies that will invest in new projects with over raised funds, or do or acquire equity of the company for other purposes.
For example, Montage Technology Co.Ltd(688008) the recent announcement shows that the company plans to use the over raised funds to invest in the R & D and industrialization projects of the new generation PCIe heavy timer chip. The total investment amount of the project is expected to be about 520 million yuan, and the proposed investment of over raised funds is about 478 million yuan (including the interest of some over raised funds). The excess is invested by the implementation subject with its own or self raised funds. It is announced that the project plans to develop PCIe 5.0 heavy timer chip and realize industrialization, and then further develop PCIe 6.0 heavy timer chip. The chip developed by the project adopts advanced analog and digital signal conditioning technology, which can compensate channel loss and eliminate the impact of various jitters, improve the integrity of PCIe signal and increase the effective transmission distance of signal.
Traffic Control Technology Co.Ltd(688015) the recent announcement also shows that the company plans to use the remaining over raised funds of 24.6159 million yuan for the fund gap of “construction project of independent virtual marshalling operation system” in the project of raising and investing A-Shares to specific objects in 2020. The company said that after the use of the over raised funds, the special account for storing the over raised funds will no longer be used, and the company will go through the account cancellation procedures.
Shareate Tools Ltd(688257) in mid December, it was announced that the company used the over raised funds of 70.8 million yuan to acquire 60% equity of Zhuzhou Weikai cutting tools Co., Ltd. (hereinafter referred to as “Zhuzhou Weikai”) from Zhuzhou Jinwei cemented carbide Co., Ltd. (hereinafter referred to as “Zhuzhou Weikai”), and planned to use the over raised funds to jointly increase the capital of Zhuzhou Weikai with Liu Changbin, the shareholder of Zhuzhou Weikai. According to the data, Shareate Tools Ltd(688257) listed in October this year, the total amount of IPO funds raised by the company was about 1.445 billion yuan, and the actual net amount of funds raised was about 1.352 billion yuan, of which the over raised funds were nearly 700 million yuan.
There are also A-share companies that plan to use over raised funds to increase the investment amount of raised investment projects. As Ropeok Technology Group Co.Ltd(688619) announced not long ago, the company plans to use part of the over raised funds of 58.95 million yuan to increase the investment in Shanghai of the raised investment project – R & D center construction project, which is used to supplement the purchase and decoration expenses of the office space of Shanghai R & D center and pay for supporting infrastructure.
how to use the over raised funds?
After over raising, how should the idle funds be used? Hemai shares announced that it would use over raised funds to purchase financial products, which immediately aroused heated discussion in the market.
According to the company’s announcement on the proposal on using some temporarily idle raised funds for cash management, it is agreed that the company and its subsidiaries use temporarily idle raised funds up to RMB 4.5 billion (including this amount) for cash management under the premise of ensuring that the implementation of investment projects with raised funds and the safety of raised funds will not be affected for the purchase of high security, good liquidity Investment products with Principal Guaranteed agreements (including but not limited to principal guaranteed financial products, structured deposits, call deposits, time deposits, large certificates of deposit, agreed deposits, etc.) shall have a service life of no more than 12 months.
It is obviously unreasonable to “lie” a lot of funds on the account, but it is suspected of wasting social resources to buy financial management and eat interest. How should listed companies deal with it?
Dong Dengxin believes that how to use the over raised funds should be determined by the enterprise’s internal supervision mechanism. Since investors are given the right to vote with their feet and hands, they should be respected. Rational use of over raised funds may create excess returns for listed companies; However, if the investment is too radical, it may bring some operational risks to the listed company; The most common is to buy financial products. Although there are some disputes, the safety margin is high.
GUI Haoming said that the over raised funds will not be unusable, but a lot of money may not be planned or exceed expectations. The use efficiency of this part of funds may be relatively low, and the market dispute is also here. However, if a company does have a future, the roe of the company may decline in the short term after capital investment, but this situation will improve over time. Therefore, the key depends on the development potential of the industry and the company. He believes that when planning the investment direction of IPO raised investment funds, enterprises should have a wider perspective, be flexible, have a plan in advance, make detailed planning, and improve the efficiency of capital use.
Wang Jiyue, a well-known investment banker, proposed that the first is to allow the company to repurchase shares with over raised funds. This is because it is required to issue no less than 25% of new shares during IPO, but only no less than 25% of social public shares after listing, and social public shares include some shares held by non actual controllers or directors, supervisors and senior managers who are still in the lock-in period. Therefore, most companies will have some repurchase space; In addition, the shares can be expanded to more than 400 million shares, so that the proportion of social public shares can be reduced from 25% to more than 10%, with enough repurchase space.
Second, the company is allowed to use the over raised funds to subscribe for the offline strategic placement funds raised by the public for the IPO of other companies. The risk of offline strategic placement fund is relatively small. Listed companies can obtain higher returns with less risk, and the funds can also return to the market to support the IPO issuance of other companies, which can also be regarded as funds to support the development of the real economy.
Chen Xin, a professor at Shanghai Advanced Finance School of Shanghai Jiaotong University, said that the over raising phenomenon has damaged the interests of minority shareholders to a certain extent. If there is no suitable fund-raising investment project, the utilization efficiency of funds will be reduced. Moreover, over raising is unfavorable for screening inefficient companies, because once inefficient companies over raise, they can live for many years with these funds.
How to solve the problem of over raising? Wang Jiyue proposed that we should use rules to guide, use market-oriented solutions, and do not directly interfere with prices. 1. The rules allow the repurchase of over raised funds. When the restrictions on public shares are touched, it is allowed to use the capital reserve to expand shares to more than 400 million shares before repurchase. This is different from the high transfer of ordinary companies, which is to solve the problem of waste of idle funds; 2. Let the idle funds return to the market through public funds to support more real economy IPOs; 3. Modify the rules to increase the actual circulation at the beginning of listing by means of securities lending, so as to reduce the issue price and solve the problem of distorted pricing; 4. Further accelerate the supply of new shares and lower the issue price.
Chen Xin also believes that the current pricing mechanism for A-share new shares is reasonable, but considering the characteristics of the current market, a transition period can be set to limit the number of shares sold on the basis of price determination and meeting the standard of public shareholding ratio. As for the use of the raised funds, the decision-making power is in the hands of the listed companies after the money reaches the listed companies. Therefore, it is impossible to ask the listed companies how to use the money. Moreover, generally speaking, the listed companies basically have no incentive to buy back and war allocation funds.
(Securities Times)
