On March 16, the financial stability and Development Commission of the State Council held a special meeting to answer market concerns, including the plight of zhonggai shares. The meeting clearly pointed out that the Chinese government continues to support all kinds of enterprises to list abroad.
Subsequently, the CSRC also made clear the deployment, paid close attention to promoting the implementation of new regulations on the supervision of overseas listing of enterprises, supported all kinds of qualified enterprises to list abroad, and kept the channels of overseas listing unblocked.
It seems that the spring breeze blows the spring water. On the same day, well-known enterprises Lepu Medical Technology (Beijing) Co.Ltd(300003) , Gotion High-Tech Co.Ltd(002074) all announced that the company planned to issue global deposit receipts (GDR) overseas and list on the Swiss stock exchange.
The financial Associated Press reporter noted that shortly before the announcement of the above two enterprises, on March 15, the leading enterprise Sany Heavy Industry Co.Ltd(600031) also announced that it planned to issue GDR on the Swiss Exchange It is understood that Sany Heavy Industry Co.Ltd(600031) is the first enterprise to announce its intention to issue GDR overseas after the revision of the rules of Shanghai Luntong. The scope of application of the Swiss Securities Regulatory Commission and the London Shanghai Securities Regulatory Commission has been modified and expanded to December 2021.
When the enterprise went to Switzerland to issue GDR, the announcement admitted that it was mostly to speed up the company’s international strategic layout, build the company’s international brand and image, and meet the capital needs for overseas business development. At the moment, a senior market person pointed out to the financial associated press that the destination chosen by these companies this time is Europe, not the United States, which is worth pondering.
Why go to Switzerland and what can GDR bring? The answers given by the three companies are quite similar, responding to the call of China’s capital market policy, taking the internationalization strategy and expanding overseas financial financing capacity.
Gotion High-Tech Co.Ltd(002074) said that as one of the leading global power lithium battery manufacturing enterprises, the company adheres to the business strategy of “industry first and talent first”, and actively expands the global market while increasing investment in R & D technology. In recent years, the shipment volume of the company’s power battery products has increased rapidly, and the global market share has remained at the forefront. In particular, the order demand of overseas customers for the company’s products has increased significantly. This GDR issuance and listing is a major measure to respond to the call of China’s capital market policy, deepen the interconnection of China EU capital markets, and promote the development of real economy, especially the development of a new generation of manufacturing industry, with the help of overseas capital markets. The company will make full use of the favorable opportunity of China EU capital market interconnection, enhance the company’s global brand influence, broaden overseas financial financing capacity, and ensure the financial needs of the company’s international strategic development.
Lepu Medical Technology (Beijing) Co.Ltd(300003) said that Chinese enterprises’ investment in overseas markets is an important way for China’s opening up and international development. The company plans to build production bases in overseas countries or regions, which will help the company shorten the production radius, reduce production costs, better enter the local countries and global markets, and increase the proportion of overseas sales. In the future, the company will further increase its investment in developing countries. The issuance of GDR is a bridge connecting China and the world. Through such overseas financing, the company will meet the needs of overseas funds, enhance the popularity of the international market and enter the overseas market. Through the global international innovative product R & D, production and sales system of “point to area”, the company will get rid of the development path of relying solely on cost advantage and practice the company’s international development strategy.
Sany Heavy Industry Co.Ltd(600031) also said that the purpose of the overseas issuance of GDR is to promote the internationalization strategy, make full use of the support of the capital market and improve the level of corporate governance. The funds raised from overseas listing will be mainly used for its international business, especially in the European and American markets.
Sany Heavy Industry Co.Ltd(600031) further pointed out that the overseas issuance and listing of global depositary receipts is an important measure for the company to respond to the policy call of China’s capital market, deepen the interconnection of China EU capital markets, and use overseas capital markets to promote the development of real economy. The company hopes to make full use of the favorable opportunity of capital market reform and the strong support of policies to realize direct connection with overseas capital markets, improve the company’s overseas brand awareness, enhance multi-channel financial ability, and provide sufficient funds and financial resources for the company’s international strategic development.
At present, the issuance of GDR by the three enterprises may be of great significance. Taking Sany Heavy Industry Co.Ltd(600031) as an example, Gf Securities Co.Ltd(000776) Dai Kang and Ni Geng believe that Sany Heavy Industry Co.Ltd(600031) proposed GDR fully demonstrates the openness and innovation of China’s capital market interconnection reform.
Dai Kang and Ni Geng believed that Sany Heavy Industry Co.Ltd(600031) proposed to issue GDR is of far-reaching positive significance to the reform and development of China’s capital market. Under the market’s fear that the continuous outflow of funds going north and the continuous sharp decline of Chinese stocks in overseas markets will affect the market sentiment, it will undoubtedly help to greatly boost the confidence of a shares.
First, demonstrate confidence in capital market reform. In February 2022, the CSRC issued the regulations on the supervision of the interconnection of depositary receipts business between domestic and foreign stock exchanges, expanding the scope of recognition from the UK to Switzerland and Germany. This is a simple new channel for overseas secondary listing, and Sany Heavy Industry Co.Ltd(600031) is an important “first demonstration”; Second, deliver important market signals. At present, the policy connotation is not to suppress and restrict Chinese enterprises from listing abroad, but to make up for the regulatory gap, and the breakthrough of GDR is also conducive to accelerating the pilot of CDR; Third, the two-way opening of the capital market is conducive to enhancing the long-term global competitiveness of Chinese advantageous enterprises and promoting the vitality of the private economy and the brand power of made in China.
Will more enterprises choose the same path? Financial associated press reporters will continue to pay attention. However, the three companies have first disclosed the risks in the announcement, “the issuance scale, issuance scheme, purpose and use feasibility of overseas issuance of global depositary receipts and listing are still under demonstration, and there is still great uncertainty.”
