Gem Shell Resources "Devaluation" Poor Stock Protection Difficult

"Shell is even less valuable." After the publication of the relevant rules for gem registration reform and registration system, many investment bankers were so exclaimed.

In April 27th, the thirteenth meeting of the Central Committee for comprehensive deepening reform and deliberation adopted the implementation plan of the gem reform and the pilot registration system. On the evening of the same day, the China Securities Regulatory Commission and the Shenzhen Stock Exchange invited the public to solicit opinions on the revised draft of the relevant administrative measures.

In early April 28th, the A share market suffered a major shock and the main stock index fell nearly 2%. After initial adjustment, the two cities' stock index rebounded sharply to achieve the "V" reversal.

It is worth noting that shell resource stocks are under pressure. As of April 28th closing, Oriental Wealth Choice data show that 105 shell resources concept stocks, 68 fell, accounting for 64.76%, Meyer and other stocks fell.

Behind this, there is no lack of logical deduction of the market's change of A shares under the registration system.

"Shell's trading value and use value are all depreciating." A senior M & A in East China admitted to reporters.

In addition, the gem registration system reform has also improved the quality of listed companies from the perspective of delisting procedures, standards and risk warning mechanisms. For performance stocks, shell preservation will become more difficult.

"With the advance of registration system, the A share market will be further differentiated in the future." Dong Dengxin, director of the financial and Securities Research Institute of Wuhan University of Science and Technology, told the twenty-first Century economic news reporter.

Fall in shell value

Under the concept of reorganization and the anticipation of backdoor, the A share market has the tradition of "stir up small" and "stir up bad".

According to the twenty-first Century economic report reporter tracking and understanding, since October 18, 2019, the growth enterprise board backdoor "loosening", the case has not yet landed, but the phenomenon of "stir up small", "bad" phenomenon has not stopped.

Since October 18, 2019, the growth of gem corresponding to the deregulation of the gem has reached 22.46%, while the small cap growth index has increased by 5.58%, while the Shanghai Composite Index has risen by -5.62%.

However, under the gem reform and the pilot registration system, the market has already seen the signal of style conversion. Relevant rules for the draft issued the following day, opened in April 28th, shell resources concept stocks and ST shares are generally under pressure.

Wind data showed that in April 28th, 120 of the 154 risk warning stocks in two cities fell, accounting for 77.92%, while 26 were down, with only 17 rising.

The logic behind this is that the value of the shell will depreciate after the registration system is spread out in A shares.

The management method of gem initial public offering registration (Trial Implementation) (Draft) has cancelled the current performance requirements of gem in terms of earnings performance, and there is no uncompensated deficit. Non profitable enterprises can apply for listing after one year's implementation of the reform.

The Shenzhen Stock Exchange Listing Rules for gem (revised draft 2020) stipulates that we should optimize the listing conditions, take into account the estimated market value, income and net profit and so on, and formulate diversified listing conditions to support different growth stages and different types of innovative and entrepreneurial enterprises listed on the gem. First, we should appropriately improve the profit listing standard, and request that "net profit in recent two years is positive and total net profit is not less than 50 million yuan" or "the market value is not less than 1 billion yuan. The net profit in the latest year is positive and the operating income is not less than 100 million yuan". The two is to cancel the requirement that there is no loss in the latest term. The three is to support enterprises that have been profitable and have a certain scale of special ownership structure and listed on red chip enterprises. The four is to define the listing standard of unprofitable enterprises.

There are two ways to achieve A share listing: IPO and backdoor listing. Chen Guo, chief strategist of Anxin securities, believes that the shell value comes from shortening the time advantage of the listing cycle and approving the approved advantage. IPO examines more stringent years, and the number of backdoor listing cases tends to be more frequent.

? ? According to its statistics, in 2013, IPO had 21 empty windows and 380 backdoor listing companies. From 2014 to 2016, it became the peak period of backdoor listing, with an average of 27 companies getting backdoor listing every year. In November 2016, the issuance of the trial committee was accelerated by IPO, and the number of the number of backdoor listing cases was reduced to 8 by the audit committee of 2017, and the number of backdoor listing cases was reduced to 8. The core period is 3-6 months, and the advantage of backdoor listing is weakening. As the strength of backdoor listing is getting smaller and smaller, the number of backdoor listing has stabilized at less than 10 a year in the past three years.

Shell value and shell company's market value reached the maximum in 2015 and 2016, and began to decline after 2017. In 2015 and 2016, the peak period of backdoor listing was in 2017. Due to IPO acceleration and policy regulation, the attractiveness of backdoor listing decreased and shell value decreased. In 2019, the establishment of Ke Chuang board further shrank the shell value.

Chen Guo pointed out that the implementation of registration system will help to dredge the IPO "barrier lake". The time advantage and certainty advantage brought about by backdoor listing will weaken, and the shell value may drop sharply.

In the eyes of many investment bankers, the decline of shell value has already been felt in practice.

"Supply is increasing and outflows, and shell value will be further reduced. Moreover, the registration system will be further extended to the whole market in the future. A senior investment bank in Shenzhen pointed out to the twenty-first Century economic news reporter.

"The shell must have been further depreciated, and now it has been severely derogated. The simple shell is hard to sell. We feel very obvious, but many listed companies also think the shell is very valuable. In fact, the transaction value and the use value of the shell are all depreciating. On the one hand, the shell can not sell the price, on the other hand, when there is a shell on hand, you can fudge a lot of good assets, and you can constantly buy assets and enlarge the market value. Now these two are not working. " A senior M & A in East China admitted to reporters.

Aggravated differentiation

The registration system reform of GEM has also learned from the achievements of the science and technology board system. According to the concept of registration system, from the perspective of improving the quality of listed companies, we have optimized the delisting procedures, standards and risk warning mechanisms.

For example, it simplifies the delisting procedures, cancels the suspension of listing and resuming the listing, improves the delisting standard, cancels a single continuous loss delisting index, and introduces a combination financial withdrawal index with "deducting non net profit to be negative and operating income below 100 million", adding new market value delisting indicators, setting up a delisting risk warning and *ST system, and strengthening risk disclosure.

"Gem registration system reform has also been optimized in the delisting, so that the cost of shell is high, and there are risks." The aforementioned mergers and acquisitions pointed out.

"With the advance of registration system, the A share market will be further differentiated in the future." Dong Dengxin told the twenty-first Century economic news reporter.

Chen Guo pointed out that after the full implementation of the registration system, the increase in IPO supply will consume a lot of capital, resulting in A shares liquidity tight, bringing long-term pressure on A shares. The channel to relieve this liquidity strain is to improve the withdrawal mechanism of listed companies. The promotion of registration system and the increase of delisting are two sides of a coin. The tail risk of listed companies will face slow liquidation. From the structural point of view, the registration system will accelerate the polarization of A shares and turn the investment trend to the leading position, and the volume will gradually concentrate on the leading companies.

When the delisting standard is close to the registration system, it is not easy for some performance poor stocks to maintain the listing status.

In addition, Dong Dengxin pointed out that after the implementation of the new securities law, it is more difficult for listed companies to make financial fraud, which will further increase the difficulty of shell keeping of junk stocks.

"It is estimated that at least more than 20 listed companies will be delisted this year in the A share market. 7 of them were suspended from listing last year, and the fundamentals are very poor. They will be directly delisted this year. In addition, there are currently more than 10 yuan shares, and the fundamentals are also difficult to improve. It may take a single yuan to withdraw from the market. Under the reform of the gem and the pilot registration system, the effect of the "one yuan delisting standard" will be greatly enhanced. Dong Dengxin thinks.

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