Leaving the old and welcoming the new, looking at the performance of the A-share market in 2021, the IPO report card is bright: the number of new shares issued and listed has increased significantly, the financing scale has increased steadily, and equity financing has achieved remarkable support to the real economy.
Experts believe that with the comprehensive promotion of the reform of the registration system, the multi-level capital market system will be further improved. The A-share IPO is expected to speed up in 2022, and more high-quality enterprises of different types and different development stages will run out of the “acceleration” of development with the help of the “living water” of direct financing.
continuous progress of reform –
the pace of IPO accelerated
With the steady progress of the reform of the registration system and the establishment of the Beijing stock exchange, the camp of A-share new shares continued to expand and the financing scale increased significantly in 2021. According to statistics, as of December 31, 2021, a total of 524 new shares of A-Shares have been listed, and the total amount of funds actually raised in the initial public offering has reached 546.6 billion yuan, both in quantity and amount, reaching a new high in recent years.
“The substantial increase in the scale of IPO Financing during the year is inseparable from the accelerated promotion of China’s capital market reform. The Beijing stock exchange established and synchronized the pilot registration system, and the science and innovation board and the gem accelerated the reform of the registration system, broadening enterprise financing channels and improving financing efficiency. More enterprises can go to the A-share market for financing as soon as possible and grow rapidly.” Tian Lihui, Dean of the Institute of financial development of Nankai University, said.
While the number of new shares issued has reached a new high, the ecology of the capital market is also changing. The reform of new share price formation mechanism, survival of the fittest mechanism and normalized delisting mechanism have achieved positive results.
The myth of “unbeaten new shares” has been broken. “The price of new shares can better reflect the actual value of enterprises, and the efficiency of price discovery has been significantly improved. Companies in different industries and different textures are facing greater valuation differentiation, and the issue pricing is close to the fundamentals. After the shares are listed, the turnover is more sufficient, and the breaking phenomenon has increased.” Li Zhan, chief economist of China Merchants Fund Research Department, said.
The market survival mechanism has been gradually improved, and the support for value investment has become more prominent. According to Li Zhan’s analysis, the registration system has effectively changed the expectation of short supply of new shares in the market in the past, the phenomenon of “speculation” and “speculation difference” in the market is decreasing, the “shell value” of stocks is gradually declining, and the stocks of high-quality companies are more popular.
The construction of normalized delisting system has been continuously promoted. In 2021, more than 20 A-share companies have delisted, an increase over previous years. At the same time, the delisting channels are gradually diversified, and there are many delisting situations, such as board transfer delisting, compulsory delisting and M & A delisting, which further forms a benign market ecology of both entry and exit.
It is worth mentioning that with the deepening reform of the capital market, the return of red chip enterprises has become a major attraction of the A-share market. In August 2021, China Telecom Corporation Limited(601728) landed a shares. Recently, China Mobile announced the results of the initial public offering of a shares. The number of shares issued is 845.7 million, and the total fund-raising is expected to be 48.695 billion yuan. “The return of China Mobile and China Telecom Corporation Limited(601728) to A-Shares is an important manifestation that enterprises are optimistic about the development of China’s capital market. With the continuous improvement of the policy environment, the return of red chip enterprises will become a major trend.” Tian Lihui said.
The system is becoming more and more perfect –
science and innovation enterprises have benefited significantly
From the perspective of fund-raising investment direction, emerging industries such as new energy, new materials, medicine and biology and high-end equipment manufacturing have become the hot spots of new share fundraising in 2021. The role of capital market in supporting innovation and entrepreneurship is prominent, promoting the continuous influx of capital, technology and talents into the field of innovation.
“The dislocation development of the science and innovation board, the gem and the Beijing stock exchange and the pattern of moderate competition provide listing options for more different types of innovative and entrepreneurial enterprises.” Li Zhan said. According to statistics, as of December 31, 2021, the number of new shares listed on the gem is the largest, reaching 199, with a financing scale of about 147.5 billion yuan; 162 new shares were listed on the science and innovation board, with a financing scale of about 202.9 billion yuan; The total amount of IPO and fund-raising of the two companies is about 350.4 billion yuan, accounting for 64% of the total amount of IPO and fund-raising in 2021.
The science and Innovation Board continues to play the role of “experimental field” of reform, and actively encourages enterprises to use innovative systems for orderly financing, excellence and strength. The relevant person in charge of the Shanghai Stock Exchange told reporters that the science and innovation board has optimized the refinancing system arrangements such as issuance conditions, small quick financing limit and approval validity period, further widened the financing channels of listed enterprises, and promoted the refinancing of “hard technology” enterprises such as Advanced Micro-Fabrication Equipment Inc.China(688012) , Sinocelltech Group Limited(688520) to break through the limit of 30% supplementary working capital ratio. At present, 11 companies have completed refinancing issuance, A total of 25.4 billion yuan was raised, and 11 enterprises tested the water for microfinance.
The vitality of the GEM market has been continuously stimulated, and the quality of listed companies has been further improved. According to the relevant person in charge of Shenzhen Stock Exchange, at present, the listed companies in the new generation of information technology, biomedicine, new materials and high-end equipment industries on the gem account for nearly 50%, and have cultivated a number of high-quality enterprises with core technology and innovation ability, such as Contemporary Amperex Technology Co.Limited(300750) , Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) . With obvious industrial cluster effect, it has become an important platform for service innovation driven development strategy.
“The development of the science and innovation board, the growth enterprise market, the Beijing stock exchange and the reform of the registration system have widened the financing channels of scientific and technological, innovative and growing enterprises. The listing of these enterprises has released the liquidity of the primary market and indirectly supported the development of other start-ups, which is of great significance to form a virtuous circle of financial support for the development of science and technology.” Li Zhan said.
While the multi-level capital market system provides enterprises with all-round investment and financing services, we should also be vigilant against concept speculation. With the development of the new generation of information technology, such as big data and artificial intelligence, more and more new technology concepts are favored by the capital market. There is no lack of bubbles. The market should be vigilant, take corresponding measures to standardize, guide the medium and long term value investment orientation, reduce the hype of subject matter, and further promote the high quality development of the real economy.
gradual ecological optimization –
enterprise expectations are more clear
The central economic work conference in 2021 clearly proposed to fully implement the stock issuance registration system. Recently, when conveying and learning the spirit of the central economic work conference, the Party committee of the CSRC proposed to comprehensively deepen the reform and opening up of the capital market under the guidance of the reform of the whole market registration system. Looking forward to 2022, the market expects that with the comprehensive promotion of the registration system reform, the number of IPOs in the A-share market will continue to grow, and the proportion of direct financing is expected to continue to increase.
“From the reform pilot in the past three years, the registration system has performed well and has been proved to be an effective system conducive to the prosperity and development of the capital market. Further promotion is necessary.” Li Zhan said that the full implementation of the registration system and the scientific and reasonable normalization of IPO will bring more financing water and help more enterprises solve the financing difficulties with the help of the A-share market.
Deloitte China capital market service department predicts that with the support of the rising number of new shares on the science and innovation board, the gem and the Beijing stock exchange, the A-share new share market will continue to grow in 2022, and most of the new shares will come from small and medium-sized manufacturing and technology enterprises.
“China’s capital market has undergone a number of major reforms in recent years. We are optimistic about the prospect of the new share market in 2022 and the next few years. The market expects that the full implementation of the new share issuance registration system will create a more favorable environment for enterprises to raise funds more effectively in the domestic capital market to support business development.” Tong Chuanjiang, managing partner of A-share listing business of Deloitte China capital market service department, said.
In order to support more high-quality innovative and entrepreneurial enterprises to obtain financing support, Li Zhan suggested that we should accelerate the full implementation of the registration system and set more diversified listing standards, especially for the new generation of information technology industry, biological industry, new material industry, new energy industry and other strategic emerging industries, we can set the listing standards with growth as the core, In order to comply with the development laws and characteristics of science and innovation enterprises and improve the market tolerance and pertinence.
Of course, with the increase of the number of newly listed enterprises, the liquidity pressure of A-Shares can not be ignored. Supporting A-share IPO on a larger scale still needs to rely on the further reform and opening up of the capital market. Tian Lihui suggested that in the future, we should continue to promote the high-level reform and opening-up of the capital market, constantly improve the construction of market infrastructure, and promote the standardization and transparency of market ecology, so as to further attract foreign investors, absorb more medium and long-term funds for the A-share market, and better promote the high-level cycle of science and technology, capital and industry.
(Economic Daily)
