The Second Round Of Listing And Trading Of Selected Enterprises Will Be Imminent, And The Construction Of Market Refinancing System Will Be Put Forward For The First Time

On the second round of corporate financing, the construction of the second round of corporate financing is also raised.

On October 23, Gao Li, a spokesman for China Securities Regulatory Commission, said at the annual meeting of the 2020 Financial Street Forum that it would further deepen the reform of the new third board, optimize the audit mechanism for public offering, launch the refinancing system at the selected level, study and launch convertible bonds, further smooth the market access channels for long-term funds such as public funds, and promote the better play of market functions.

This is also the first time that the regulatory authorities put forward the "refinancing system at the selected level".

"The first batch of selected layers have been listed for three months. It is time to set up and improve the refinancing system after the public offering." In this regard, Zhou Yunnan, founder of Beijing Nanshan investment, said.

It is the first time to introduce the refinancing system at the selected level

On July 22, 2020, the first batch of 32 enterprises were listed in the selected layer after public offering, with a total financing of 9.452 billion yuan. Three months later, Changfu Co., Ltd. and Wantong Hydraulic Co., Ltd. successively disclosed the announcement on the arrangement and inquiry of the public offering of stocks to unspecified qualified investors and listing at the selective level, and the enterprises listed on the selective layer in the second round started public offering.

Industry insiders said that in the context of the normalization of "mature one listed company", the construction of market refinancing infrastructure needs to keep up.

Prior to this, the national small and medium-sized enterprise share transfer system (hereinafter referred to as the stock transfer company) has improved the directional issuance system of the new third board. It has introduced simultaneous listing, allowing self-made issuance, and releasing the restriction of 35 people for directional issuance, so as to facilitate enterprise financing.

Zhou Yunnan said that in terms of system support, the refinancing and convertible bonds at the innovation level have been relatively mature. However, since the selected level enterprises have gone through a public offering and become more public, it is suggested to refer to the operating experience of a shares on the basis of the innovation level system. The refinancing and convertible bond systems of the selective layer can be as close as possible to a shares.

"The audit mechanism of the selection level has learned from the core of the registration system. In this case, its refinancing policy should also have the spirit of the registration system and improve the audit efficiency." Some securities analysts said that after the implementation of the registration system on GEM, the examination of convertible bonds will be transferred to the exchange, and the audit time will be reduced to less than two months.

"The refinancing system I understand is systematic." Zehao investment partner Cao Gang said that although the current new third board refinancing system is relatively mature, it is still not perfect, mainly relying on a form of private placement. "In the future, in terms of financing means, the selection layer should also keep up with A-shares, and the means of public offering and allotment of shares should also be included in the system of refinancing system construction."

In this regard, Xie Geng, chairman of the stock transfer company, also said publicly that it would strengthen the financing function of the new third board, mainly in terms of financing management system and product innovation, so as to provide more choices for market entities.

In addition to the introduction of the refinancing system, Gao Li also said that it will study and launch convertible bonds at the selected level.

In 2018 and 2019, the regulatory authorities have successively launched mass entrepreneurship and innovation convertible bonds and private placement convertible bonds in the new third board market. Although the market has a greater demand for financing, but the successful issuance of convertible bonds in the new third board companies are very few.

"The ultimate goal of convertible bonds is to convert shares, but the liquidity of stocks of companies listed on the new third board has been poor, and the expectations of exit and rise are not good, so the development of convertible bonds on the new third board is not smooth." The analysts said.

Zhou Yunnan suggested that in the future, the convertible bonds of the selected layer can follow the example of a shares and trade directly in the secondary market, which can not only broaden the refinancing channels of the selected layer, but also drive the activity of the target stocks of the selected layer, and create more money making opportunities and wealth effects for the selection layer and investors.

"However, whether it is the introduction of refinancing system or convertible bonds, its activity must be based on the relatively active trading of individual stocks in the market. At the same time, how to improve the liquidity and tradability of individual stocks is more critical Cao Gang said.

Multiple measures to revitalize market liquidity

It is also based on the consideration of market liquidity that the regulatory authorities have made new explorations in the market entry and trading system of public funds recently.

Recently, 21st century economic reporter learned from institutions that the future stock of public funds can directly invest in the stocks of selected companies by modifying the fund contract and expanding the scope of investment without holding a general meeting of shareholders. The relevant process is greatly simplified. Market participants said that the public offering market with a trillion yuan of stock capital is expected to bring actual marginal incremental funds to the selection layer and ease the market liquidity problem.

On the other hand, the mixed trading system of selective layer is also ready to emerge. Since 2020, the whole stock exchange system has been tested for 3 times.

The so-called "hybrid trading" refers to the introduction of market makers in the selective layer continuous bidding transaction, so that investors can trade directly with market makers. At present, qualified investors can choose to open and close call auction trading, continuous bidding trading and after hours block trading. "Hybrid trading" is equivalent to introducing new market participants and increasing trading opportunities, "said Zhu Haibin, chief analyst of Anxin securities's new third board.

Zhu Haibin predicts that under the future mixed trading system, market makers may participate in the inquiry and purchase of public offerings, so as to enrich the types of market transactions and provide liquidity.

"At present, the selection level companies are seriously differentiated, and some companies even have no trading for a long time when their liquidity is weak. In the previous hybrid trading test scheme, market makers were required to quote for a long time. At the same time, the test also required to avoid the imbalance of trading power affecting the number of transactions." In addition, Zhu Haibin said that market makers are expected to play a role in balancing the trading power and increasing the effective time of trading in mixed trading.

What's more, the issuance scheme of Changfu shares, which has recently launched a public offering, has for the first time used the over allotment option, that is, the green shoe mechanism. This is also the first single green shoe mechanism of the new third board.

"The following second round of selected layer listing enterprises will probably adopt the green shoe mechanism." Close to the regulatory level of the new third board securities business personnel said. At present, the second round of green shoes has been approved.

Zhou Yunnan said that after the adoption of the green shoe mechanism, it will promote the marketization and openness of the public offering system of the selected layer, so as to keep up with the A-share issuance system.

Prior to this, the first batch of selected layer break and trading is not active, has greatly affected the investor's confidence in the selection layer. Zhou Yunnan said that the green shoe mechanism, which was born to resist the breakout, is particularly important at this time. It can enhance the market's expectation of the entire selection layer, and simultaneously enhance the probability of successful public offering of enterprises, so as to realize the smooth transition of stock price from the primary market to the secondary market. In addition, the introduction of green shoes mechanism can also reduce the probability of new shares breaking. "When the green shoes funds buy stocks from the secondary market, they can actively trade, stabilize the stock price and ensure the stability of the secondary market.".

"In fact, the introduction of the green shoe mechanism also helps to stabilize the market's expectation of new shares, and can also produce marginal benefits in improving the liquidity of individual stocks. In combination with the market entry of public long-term funds, the mixed trading system and the future transfer board system, the selected layer market is expected to get out of the dilemma of poor earning effect and poor liquidity. " Cao Gang said.