Financing Global Growth For Chinese Enterprises

Wang Qian, chief representative of London Stock Exchange in China

Good afternoon, everyone. For such a long time, guests in front of us.

Let's take a look at the main characteristics of the London Stock Exchange. It can be said that the London Stock Exchange is the most international exchange in the world. What is the most internationalized embodiment? It is mainly reflected in two aspects: one aspect is that the companies listed on this exchange are most internationalized, and that the listed companies in almost more than 110 countries are listed in London.

In 07 years, the London stock exchange bought and sold the Milan stock exchange, so we can see that even an exchange like this is developing and expanding itself with the help of a merger and acquisition in the capital market. Now the Milan Italy exchange is a wholly owned exchange under the London exchange group.

What does this mean? We can not only occupy the old London center, but with its capital platform, its influence and radiation force.

On the other hand, for some industries, especially some luxury industries, such as fashion, it can also be launched through one listing and two listing, which can affect the expansion of upstream and downstream influence in Italy.

Here are the different data of some exchanges. I will not elaborate on them here. Let's look back.

We can see that the London exchange is the most international exchange. Here are some data that can be seen in enterprises in Europe, the Middle East, Africa, Russia, CIS, India and Asia.

We will see that it is precisely because of the long history that the London Stock Exchange has gathered the largest and most abundant capital market funds in the market. The interesting thing about this market is that its institutional investors dominate the market, which is very different from that of Hongkong and New York.

In other markets, there are more individual investors or retail investors. Institutional investors will be more rational and will not give a hundredfold price earnings ratio, like the gem.

He is to let you prove that he is really a feasible, able to achieve the rapid development speed.

If you can't prove that you can really achieve a high speed of development in the future, it will think why I want to give you such a high price earnings ratio.

From this perspective, it seems that we feel a little disappointed, I can not get the highest price earnings ratio, why do I want to go to your market? But our entrepreneur's dream is to create a century old shop. A century old shop has your own development strategy and development strategy. In the development process, at every stage, you need the financing, so the London market is like this, its refinancing function is very developed.

Although the value of IPO may be less than that of some emerging markets, we can see that in the 09 years of the most severe financial crisis, the London Stock Exchange's financing amount has created a historical record. Why is it so? The amount of IPO in that year is not large, but a large amount is the amount of refinancing of listed companies.

We know that the more economic and hard times we have in winter, the more cash our entrepreneurs find themselves in their hands. Most companies do not mean that businesses are bad because they are forced to go bankrupt, liquidated and reorganized.

If there is a market, there are enough mature investors to be able to recognize your value, in every growth process, when you re financing, he is willing to follow you, willing to support you, I think this is a hundred years old businesses in his consideration of the listing of choice, should be taken into account an important factor.

In fact, we can also see that the mineral company's performance is not very relevant to us.

We say that the London Stock Exchange has several market segments, which can provide different options for our enterprises. Here we only look at the primary market, divided into the main board market and the high growth market. If we have to compare with our domestic market, it should be equivalent to our growth enterprise market. Of course, it is quite different.

The third is the professional stock market, which is often expected to adopt the national accounting standards. Some global inventory certificates are listed, and enterprises like Russia and India enterprises are willing to choose to go public in this market.

Also, we say that some fund markets, fund investment direction will be very complex, it will be very weird, can not talk about how funds do some structural changes, then this time may feel that it is not suitable for the general investors to invest, then how to do it? Such a different market distribution, it will find that its listing requirements are different.

If the listing is different, investors may also have different options, and the more lenient the listing requirements, the higher requirements for investors. They may be qualified investors and institutional investors.

Even in the main board market, we can see that it is also divided into standard listing and advanced path listing.

The standard listing is mainly in line with the EU standards, relatively relaxed, and senior listing, it also involves the United Kingdom's additional standards, if the choice of advanced path listing, then investors will give you valuation.

In this market, you will find that one point of your value will be reflected. People often say that your senior path listing will be higher than others, but you will find that different path valuation is different. You will have your reward.

We find that in London market, its regulation is very different from that of the United States, Hongkong and China. It is called regulatory principle or substantive supervision.

What is the principle of regulation? What we Chinese most like to say is that the world is so large that everyone is different. What kind of policy do you adopt, not one size fits all?

In fact, in Britain, the supervisory department is like this. In principle supervision, you either obey or explain, and you explain why I did not obey your rule.

Let me give you an example. For example, we have a requirement that you should issue at least 25% of the public stock in all main board markets. Otherwise, this requirement is actually to ensure that my shares have enough liquidity. If you are not too small, who will buy and sell in the market?

We can see that in May of last year, there was a India company, which was a large comprehensive company like oil, energy and power plant, which was mainly owned by the brothers.

When it was listed, it only produced less than 25% of the shares, and a few shares were listed, because the scale was very large. At that time, the financing of the listed companies was 2 billion dollars, and the market value was 9 billion dollars, less than 25%. It was through its sponsors and the regulatory authorities, which was equivalent to the China Securities Regulatory Commission, to tell him that although my shares were below the minimum standard of 25%, it would not affect my liquidity. In the end, the British UKLA was released. Then the company went into the 100 index when it listed on the market for a month in the last 2 billion months.

If you can be included in such an index series, you will find investors who will at least give you extra 20%-30%. No matter whether your company is good or bad, he will passively invest in you, because they are index funds such as tracking index.

Let's look at it. No matter the main board market or the high growth market, there is no requirement for making profits. Without such rigid requirements, it can be said that its threshold is very low and more rights are put to whom it is given to the market and the market.

Then, in the main board market, you may be asked to have a three year history of operating history, rather than a record of three years of profit. It is a record of three years of operation history. In the three years of operation history, we find that even when it is mining enterprises or natural resources, this article will be removed.

Why does this happen? Because mining companies need capital spending in the early stage, so it is not realistic for you to ask him to have three years of operation records.

So in the London market, many mining enterprises and natural resources enterprises will be listed in the exploration stage.

There is no record of three years of operation and no record of public issuance reaching 25%, which is quite lenient.

How can a structure be able to go? Including the guests in front of us will give you some good ideas. I am not very convenient to speak very deeply here, but I can tell you a small case. It's also a Chinese enterprise. It's made in Guangdong.

That enterprise has seen a circle of capital for listing.

Why does he grow so much? I think this is also a place for Chinese companies to draw lessons from. It attaches great importance to communication with investors.

Because I came back from London yesterday and will have a meeting with this company. You will find that we may not have heard of this company in China, but you will find that it is in the very mainstream times of the UK. The Daily Telegraph will see its reports, and keep your openness and pparency, so that you will win the trust of investors.

If you are interested, you can send me an email after the meeting.

Let's take a look at the characteristics that a company should have in pursuit of the market, a strong team, and your main shareholder, which is very evident in the London market.

An experienced team will often ask you what the average price earnings ratio is. I don't answer why. Because this gap is too big. In the same industry, the same geographical company, because of the different management team, brings great difference in valuations, so there is not much reference.

There are good corporate governance, feasible company plans, and pparency of the market's preferences, ownership and financial aspects of the company's industry.