Ten Years Of Gem: Service Double Creation Equity Financing 746 Billion 800 Million Stock Reform Is About To Start

Editor's note

Ten years, one sword, finally the sword light sparkle.

Ten years ago, under the great curtain of China's economic reform, the historical mission of "implementing innovation driven development strategy" and "cultivating strategic emerging industries" undertaken by the growth enterprise board, such as reckless youth, were also puzzled. Today, there are 549 strategic emerging industries in 775 listed companies, accounting for 70%, and 449 state-level high-tech enterprises, accounting for 58%. In the past ten years, the average R & D intensity of GEM companies has been maintained at around 5%, and R & D investment has continued to be higher than the average level of A shares, which has continued to drive the development of enterprises.

Ten years ago, the 28 lucky men who had been Gong on the same stage went to different places in the torrents of history. There were hundreds of millions of market capitulates, and there were also those who were sent to prison for fraud. Now, ten years later, the pace of registration reform has been getting closer and closer. This is a new beginning. We are also looking forward to the new story. (Li Xinjiang)

In October 30th, the gem entered its 10 birthday.

Looking back over the past 10 years, it has carried out the historical mission of implementing the innovation driven development strategy and cultivating strategic emerging industries. The gem has grown from scratch to become a listed sector with a market value of 5 trillion and 680 billion yuan and a number of 775 listed companies, and has gathered a number of influential and competitive Xinxing Industrial companies.

The gem started in October 30, 2009. Over the past ten years, the gem has played an increasingly important role in supporting dual venture groups, optimizing entrepreneurial innovation ecology, leading industrial upgrading and transformation, and accelerating the transformation of new and old energy. It has become an innovative engine for promoting high-quality economic development in the new era.

It is worth noting that the new pace of reform has begun. Recently, the opinions of the CPC Central Committee and the State Council on supporting the construction of the leading demonstration zone of socialism with Chinese characteristics in Shenzhen put forward the idea of improving the financial services' real economic capacity, studying and improving the listing and listing, refinancing and merger and reorganization system of gem, and creating conditions to promote registration system reform.

The Shenzhen Stock Exchange said that it will actively implement the principles and policies of the party and the state, in accordance with the unified arrangement of the SFC, adhere to the fundamental purpose of serving the real economy and entrepreneurial innovation, deepen market reforms, enrich product supply, optimize market cultivation, improve and perfect institutional arrangements suitable for innovative and growth oriented enterprises, enhance the inclusiveness and coverage of the plates, increase support for listing of technological innovation enterprises, and strive to build a capital market ecosystem compatible with the leading demonstration areas of socialism with Chinese characteristics.

Ten years equity financing reached 746 billion 800 million

Looking at the service function of the gem to the real economy, Dong Dengxin, director of the financial and Securities Research Institute of Wuhan University of Science and Technology, pointed out that after the outbreak of the global financial crisis, the growth enterprise market was just in time for China's economic transformation and industrial upgrading. Its role in economic transformation and industrial upgrading should not be underestimated.

Dong Dengxin said that in the past ten years, the gem has expanded the equity financing channel of private enterprises, and has opened second IPO channels for private enterprises to go public. On the other hand, the importance of innovation for the transformation and upgrading of the national economy is deeply rooted in the hearts of the people.

Data show that as of October 28, 2019, there were 775 listed companies in the GEM market, accounting for 20.4% of the total number of A share listed companies, with a total market value of 5 trillion and 680 billion yuan, accounting for 10.2% of the total market capitalization of A shares, which has become an important part of the capital market service entity economy.

The gem has accumulated a total of 405 billion yuan through IPO, and the amount of refinancing (including restructuring and supporting financing) is 341 billion 800 million yuan, and the total amount of equity financing has totaled 746 billion 800 million yuan. Direct financing has been invested in the field of innovation and entrepreneurship, so as to further promote innovation and development.

Because the gem does not allow companies to use venture capital to carry out high-risk investments, the fund-raising funds are mainly used for developing main businesses, paying M & a consideration, replenish liquidity and repay debts, and so on, giving full play to the role of financial support for the real economy.

At present, more than 90% of the gem are high-tech enterprises, more than 80% have independent R & D core capabilities, more than 70% belong to strategic emerging industries, and the company's innovative characteristics are obvious, becoming the "high-tech enterprise's home".

In terms of industrial structure, the gem has distinct plate characteristics and has a demonstration effect: 549 strategic emerging industries, accounting for 70%, and the industrial agglomeration effect represented by the new generation of information technology, energy saving, environmental protection and biological medicine is obvious.

There are 449 high-tech enterprises in China's gem, accounting for 58%. In the past ten years, the average R & D intensity of GEM companies has been maintained at around 5%. In 2018, the R & D intensity of 91 companies was higher than 10%, and R & D investment continued to be higher than the average level of A shares, which provided continuous impetus for development.

From the perspective of profitability, the quality of GEM listed companies has been steadily improving. In the past ten years, the average revenue of plate companies increased from 287 million yuan to 1 billion 801 million yuan in 2018, with an average net profit rising from 45 million yuan to 64 million yuan, and gross margin of sales remained at around 30%.

Among them, from 2009 to 2016, the annual compound growth rate of average income and average net profit of GEM companies reached 23% and 15% respectively, much higher than that of other sectors in the same period.

In 2017 -2018, the overall pressure of the plate was obvious, and the company's differentiation was obvious. The problem company appeared, which was related to the relatively weak ability of small and medium-sized private enterprises to resist risks.

In the first half of 2019, the performance of GEM companies improved significantly, and the one or two quarter profits rose sharply, showing a stable trend.

"23% of compound income growth and 15% of net profit growth have great advantages over other global gem related sectors. Some people think that China's gem valuation is higher than others. But in fact, the high valuation has its own reasons, because the growth and profit growth of China's growth enterprise market is indeed 5%-10% higher than that of other exchanges at that time. Ding Luming, director of financial engineering and asset allocation of CITIC Securities Research and development department, pointed out.

Capital market reform experimental field

In the past ten years, we have carried out a series of systematic attempts and innovations that are close to the characteristics of innovative and growing enterprises. They have started smoothly and run steadily, and have accumulated experience in the construction of capital market.

Since the start of the gem, the investor's appropriateness management system has been implemented. This is the effective exploration and the first system arrangement for the investors' suitability management in the market field.

In 2012, the gem further optimized the delisting system, which directly promoted the new round of delisting system reform in the main board market. The market delisting indicators, rapid delisting, strict control and restoration of listing standards were adopted or adopted in the reform of the main board delisting system.

In addition, the gem has also promoted the "small quick" private placement mechanism, allowing the "no sponsor not to underwrite", giving the market players greater autonomy. Subsequently, the "small quick" M & a mechanism is also an extension of this concept.

In view of the characteristics of the new economic enterprises, the gem is the first to guide the industry information disclosure and form a system, which greatly improves the effectiveness and pertinence of information disclosure, and provides experience for other sectors to implement the industry information disclosure system.

The continuous system optimization enables the gem team to converge on a number of leading enterprises. As of October 25, 2019, 5 companies had more than 100 billion market capitalization and 23 companies had a market value of more than 30 billion yuan.

In 2009, there is no company that has annual revenue of more than 3 billion yuan or net profit of more than 500 million yuan. After ten years of development, there were 93 companies with a total operating income of over 3 billion yuan in 2018, and 45 companies with a net profit of more than 500 million yuan.

In the first half of 2019, there were 169 companies with a net profit of more than 100 million yuan, and 128 of them were strategic emerging industries.

However, although the gem has achieved success in supporting the development of new economy and has achieved the first nationwide development in many systems, with the new economy, new industries, new formats and new models emerging, higher demands for the reform and development of the gem have been put forward.

In particular, when overseas exchanges compete for the introduction of institutional reform, the first registration system supports the new economic enterprises. The basic system of the growth enterprise market needs to be further improved.

"Over the past ten years, gem has made certain achievements in serving new industries, promoting technological innovation, and promoting the development of national economy. But at present, the listing requirements of gem are still relatively strict, and its functions have not yet been fully developed. A series of institutional reforms will be needed to build the gem into a more inclusive and broader coverage. Tian Li, Dean of the Financial Development Research Institute of Nankai University, pointed out.

Stock reform is ready to come out

It is worth noting that this year, top level design on GEM registration system reform, improve the GEM Listing and listing, refinancing and mergers and acquisitions system and other expressions frequently appear, gem stock reform is ready to come out.

"We hope the biggest is the registration system, and the measures of mergers and acquisitions can be more market-oriented. Our PE investment supports a lot of small and medium-sized innovative enterprises. If we can achieve a more market-oriented exit mechanism through registration and merger and acquisition, that will help innovation enterprises to develop more vigorously. Tan Haiming, deputy general manager of China Merchants Bank Research Institute.

Dong Dengxin also said, "three key problems need to be solved in the process of gem reform: first, the positioning of the gem. The two is inclusiveness. We must increase the inclusion of the listing standards. The three is regulatory issues. Under the registration system, the focus of supervision is information disclosure regulation.

In the market positioning, insiders pointed out that the requirements of the industry can be appropriately liberalized. "Gem should be positioned as a good company rather than an excellent industry."

Yin Shijiang, director general of Changjiang Securities Investment Bank, said: "the gem absorbs the best companies in every industry. In any field, the top three or top five companies have their own competitive edge. I think competitive advantage is not only reflected in technological innovation, channels, brand building, personnel management, internal control management, production process management, these are the core competitive advantages of enterprises. "

Insiders also said that gem is the most growth sector in the A share market, and its market positioning must be stable. At present, it is the most important opportunity to hatch major scientific and technological innovation enterprises.

CITIC construction investment Ding Ming Ming said, "for China now, the strategic transformation at the national level is very clear. Before 2018, it is the supply side reform. After the end of 2018, emerging technologies, including the Shenzhen reform and opening up demonstration area, essentially support the emerging technology industry."

"If these enterprises carry out indirect financing, they may not have enough collateral, so it is difficult to carry on. The cost of direct financing is lower for entrepreneurs, and a sufficiently active trading market can lower their financing costs and make them full trial and error. Ding Luming pointed out.

As for how information disclosure should be regulated, experts and scholars suggest that we should increase the readability and effectiveness while ensuring authenticity and comprehensiveness.

Xi Chao, vice president of Law School of Chinese University Hong Kong, said: "in the middle of 1990s, there were many discussions in the US SEC. If we put too much emphasis on the true, comprehensive and accurate supervision of information disclosure, the direct consequence of the listed companies is the so-called too narrow information. This is not only the higher cost of the disclosure obligations of the company, but also the high demand for investors, and he can not effectively use information."