Since this year, listed companies have actively used refinancing, M & A and reorganization to improve profitability and promote the stable development of production and operation.
According to statistics, in terms of refinancing, based on the issuance date, as of May 17, the refinancing scale of A-share listed companies has reached 319.1 billion yuan since 2022 (including additional issuance, allotment and convertible bonds). In terms of mergers and acquisitions, 1371 mergers and acquisitions occurred in the A-share market this year, involving a capital scale of 383.5 billion yuan.
“Support listed companies to overcome the impact of the epidemic through refinancing, M & A and reorganization and quickly get out of difficulties.” Recently, Wang Jianjun, vice chairman of the CSRC, said in an interview with the media.
Refinancing has a positive effect on relevant enterprises to resume production and get rid of business difficulties. “Refinancing can provide equity financing for enterprises, reduce debt ratio, get out of financial difficulties and optimize cash flow.” Tian Lihui, President of the Institute of financial development of Nankai University, told reporters that at the same time, with the help of refinancing, the ownership structure can be optimized, which also provides enterprises with opportunities for rapid restructuring and helps enterprises get out of their business difficulties as soon as possible.
From the perspective of the types of refinancing and fund-raising since this year, as of May 17, it has raised 177.2 billion yuan, with the largest fund-raising scale. The scale of convertible bonds was 95.3 billion yuan, followed by the scale of allotment of shares of 46.6 billion yuan. Not only is it hot this year, but the scale and proportion of fixed increase fund-raising have increased year by year in recent years. The data show that from 2019 to 2021, the fixed increase fund-raising scale of listed companies was 675.8 billion yuan, 832.1 billion yuan and 933.5 billion yuan respectively, accounting for 70%, 71% and 75% of the total refinancing respectively.
“At present, the refinancing market is dominated by fixed growth, which is not only the result of the relaxation of new refinancing regulations, but also an effective measure for enterprises to reduce leverage and raise funds, but also the path of enterprise M & A and extension expansion.” Tian Lihui said that the fixed increase is more suitable for companies with relatively concentrated equity, change of control plan or sought after by institutions.
The new refinancing regulations implemented in February 2020 have optimized the institutional arrangements related to fixed growth, such as flexible selection of pricing date, adjustment of pricing and locking mechanism of non-public offering shares, shortening the locking period, etc., which has effectively improved the attraction of fixed growth to listed companies.
At the same time, the M & a market is also quite active. According to the first announcement date and excluding transaction failure cases, as of May 17, 1371 mergers and acquisitions occurred in the A-share market this year, involving a capital scale of 383.5 billion yuan.
Tian Lihui said that affected by the epidemic and other factors, it is imperative to optimize the industrial structure and integrate the value chain, which requires actively promoting enterprise mergers and acquisitions, extensive expansion of advantageous enterprises and cooperation of inferior enterprises, so as to enhance the core competitiveness and international competitiveness of Chinese enterprises.
Among the above M & A events, there are 9 M & A events exceeding 5 billion yuan, 2 have been completed and 7 are in progress. A typical example is China Railway Group Limited(601390) 10 billion acquisition case. China Railway Group Limited(601390) announced on May 12 that it planned to acquire 33.54% equity of Yunnan Central Yunnan Water Diversion Engineering Co., Ltd. for a consideration of 11 billion yuan, in order to accelerate the cultivation and development of water conservancy and hydropower business.
In addition to large-scale acquisitions, the frequent “a and a” has also become a typical feature of this year’s M & a market. It is reported that in May alone, China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) , Zijin Mining Group Company Limited(601899) , Topchoice Medical Co.Inc(600763) , Topchoice Medical Co.Inc(600763) 3 listed companies announced the acquisition of part of the equity of relevant target listed companies.
“Under the registration system, the valuation of listed companies continues to enter a reasonable range, and ‘A and a’ will become the norm in the future.” Yin Zhongyu, assistant general manager of securities of the Federal Reserve, told reporters that with the steady progress of the reform of the registration system, the valuation of A-share listed companies is rationalized, and the share price in the secondary market increasingly reflects the internal asset value and industrial value of the company. The market value of many small and medium-sized listed companies with core competitiveness is lower than the net assets, which can be used as the M & a target of industry leading listed companies.
Tian Lihui also believes that with the prominent results of the reform of the capital market system, “a and a” will become the norm of China’s capital market. Since this year, “a and a” have appeared repeatedly, which is the embodiment of the success of China’s registration system reform. The improvement of the quality of letter Phi makes listed companies with low valuation more attractive. At the same time, this is also a demonstration of the effectiveness of China’s delisting system reform. We should make every concession and vulnerable listed companies should be voluntarily merged and reorganized.
Yin Zhongyu said that in addition, for small and medium-sized companies to be listed, it may be a better choice to actively seek mergers and acquisitions of listed companies with industrial coordination. With the steady progress of the reform of the registration system, the IPO valuation tends to be rationalized, and the gap between IPO and M & A of small market value enterprises has narrowed. The introduction of new actual controllers through M & A may be more conducive to the expansion and strength of the company.
