The collapse of the “invincible myth” of new shares has tilted the balance of the market towards M & A.
Since last year, the breaking of new shares on the first day of listing has occurred repeatedly, and many investors began to reconsider the M & a market. In its view, the breaking risk superimposes the cost of IPO queuing time and sales restriction time, and the way of M & A is worth a try.
The report released by the securities M & a business department of the Federal Reserve recently predicted the A-share M & a market in 2022.
report believes that under the trend of declining IPO valuation advantages, the spring of A-share M & A is coming. At the same time, in the context of shell price depreciation, “a eats a” will also become the norm
ipo valuation advantage no longer
companies to be listed actively seek mergers and acquisitions
According to statistics, most of the 105 companies listed by registration system in 2020 have a lamentable market value after listing. The number of companies with a market value of less than 4 billion yuan soared from 8 on the first day of listing to more than 60.
On the other hand, among these companies, the number of companies with a market value of more than 7 billion yuan has also shrunk from 55 on the first day of listing to 17, and the market value has dropped significantly.
The report points out that assuming that the enterprise has a net profit of 150 million and is valued at 20 times the P / E ratio, the overall valuation of its choice of M & A can also reach 3 billion yuan. At this time, if there is no need for performance gambling, shareholders can directly profit and exit. Especially for institutional investors, choosing M & A can not only save the time cost of selling for 1-3 years after IPO, but also avoid the risk of further decline of market value in the future.
“In the last six months, several M & A cases we have handled have also confirmed this.” Yin Zhongyu, head of securities investment banking business of the Federal Reserve, for example, said that although the target companies met the standard of independent IPO, and some even had a valuation of more than 3 billion, the actual controllers of the target companies took into account that there was no obvious difference between the M & a valuation and IPO, and the introduction of new actual controllers through M & A was beneficial to the target companies to become bigger and stronger as soon as possible, and took the initiative to choose M & A instead of IPO.
backdoor oligopoly “a eat a” will become the norm in the future
Since the introduction of the new regulations on the most serious group listing in history (commonly known as “backdoor”) in 2016, A-share backdoor has declined sharply since that year.
according to statistics, five of the nine listed companies that first disclosed backdoor in 2021 have failed. As of March 15, 2022, the status of the remaining four companies has been approved by the general meeting of shareholders or feedback from the CSRC, and none has been successfully completed
According to the report, with the deepening of the registration system, the Pb multiple of many small and medium-sized listed companies with core competitiveness has been less than 1. Therefore, these listed companies themselves can be the subject of M & A of industry leading enterprises.
Taking Jingdong Logistics’s huge acquisition of deppon logistics as an example, in this transaction, Jingdong paid attention to the irreplaceable position of deppon logistics in the transportation of large goods and the industrial integration effect of both sides Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) and Shenzhen Roadrover Technology Co.Ltd(002813) . The acquirer attaches importance to Shenzhen Roadrover Technology Co.Ltd(002813) technology accumulation in intelligent driving, etc.
Data show that in 2021, there were 13 new disclosure cases of A-share listed companies acquiring listed companies, a new high. Fed securities expects that with the further shrinkage of the shell value under the registration system, the valuation of listed companies continues to enter a reasonable range, and “a eats a” will become the norm.
big order recovery
major asset acquisition stops falling and stabilizes
After 2016, the activity of major asset acquisitions initiated by A-share listed companies has been declining. In 2021, the number of A-share M & A reviews was only 47, with a year-on-year decrease of about 45.35%, 86% lower than the peak in 2015, a new low.
from the perspective of transaction scale, A-share listed companies actively initiated 116 major asset acquisitions in 2021, which is basically the same as that in 2020 (117). From the perspective of transaction scale, the total transaction amount of 66 disclosed transactions was 217147 billion yuan, a year-on-year increase of 15.41%
In 2021, there were 8 large-scale transactions of more than 10 billion yuan, with a year-on-year increase of 60%, which was significantly higher than that in 2020, mainly due to the increase of large-scale acquisitions for the purpose of state-owned enterprise reform and industrial integration, such as Xcmg Construction Machinery Co.Ltd(000425) 387 billion absorbing and merging XCMG Co., Ltd., 60 Jinling Pharmaceutical Company Limited(000919) 1 billion acquiring 100% equity of Hongqiao company, Jiangsu Eastern Shenghong Co.Ltd(000301) 144 billion acquiring 100% equity of sierbang, etc.
bankruptcy reorganization record high
difficulty increases
since 2019, the number of bankruptcy reorganization of A-share listed companies has reached a new high. From 2019 to 2021, the number reached a new high year by year, 7, 15 and 17 respectively
Fed Securities believes that under the background of the registration system, with the shrinking value of the shell, it is increasingly difficult for listed companies to go bankrupt and restructure, it is more and more difficult for industrial investors with business coordination to find, and the time of restructuring has increased significantly.
According to the data, from 2019 to 2021, the court accepted the reorganization of 39 listed companies, of which only 9 companies introduced industrial investors with business coordination. In addition, even if the reorganization investors are recruited, there are also situations such as serious breach of payment progress, replacement of reorganization investors in the middle of the process, etc.
restructuring time consumption: the average time consumption in 2019, 2020 and 2021 is 166 days, 178 days and 290 days respectively, showing an upward trend year by year, and the year-on-year increase in 2021 is as high as 63%
However, it should be pointed out that the reorganized company will still face delisting risk. For example, Xinjiang Yilu Wanyuan Industrial Investment Holding Co.Ltd(600145) after bankruptcy and reorganization has officially entered the compulsory delisting procedure, and the application for resumption of listing of Dea General Aviation Holding Co.Ltd(002260) after reorganization has also been rejected by the exchange.
