New Third Board Link A Share New Pattern: Enterprise Delisting Sprint IPO And Switch Track Return To Select Layer Coexist

As an important part of China's multi-level capital market, the new third board market once again contributed a considerable amount of listing resources for a shares in the first half of 2021.

According to wind data, in the first half of 2021, a total of 63 new third board listed companies or delisted enterprises (hereinafter referred to as the new third board enterprises) rushed to IPO successfully, a substantial increase of 85.3% compared with the same period in the first half of 2020. Compared with 245 successful IPO data in the A-share market in the first half of the year, the new third board enterprises also accounted for more than 40%.

As of July 7, there were three new third board companies listed on the A-share market in a week, and the number of new third board enterprises that completed IPO increased to 66 in the year.

But at the same time, some enterprises listed on the new third board gave up IPO and chose to be listed in the selected layer.

According to incomplete statistics, since the beginning of 2021, more than ten new third board enterprises, such as Jinxin mining, Dadi electric and Kaide quartz, have changed their IPO plans, and have chosen the "small IPO" in the industry for public offering to further strengthen the connection with the capital market.

As an important part of China's multi-level capital market, the new third board market once again contributed a considerable amount of listing resources for a shares in the first half of 2021. Photo by Gan Jun

Since the beginning of the year, 66 new third board enterprises have delisted and gone to A-share market

According to wind data statistics, since the beginning of 2021, 66 new third board enterprises have made A-share success.

33 new third board companies announced IPO plans after delisting, among which 13 realized A-share listing shortly after delisting.

The number of new third board enterprises meeting in 2021 is also very considerable. As of July 7, a total of 67 new third board enterprises have passed the examination and approval committee or the Listing Committee of the stock exchange. Accounting for 32% of all A-share enterprises.

"The increase in the number of listing cases on the stock exchange board also reflects the cultivation role of the new third board. Indeed, some enterprises have obtained financing through the new third board, and have developed into enterprises meeting the A-share listing standards." There are securities companies in East China new third board business personnel said.

According to the data released by the national stock transfer companies, in 2020, all listed companies that have disclosed their annual reports will achieve a total net profit of 60.816 billion yuan, a year-on-year increase of 7.23%, and nearly 70% of the companies are profitable. Among them, the net profit of real economy enterprises totaled 54.606 billion yuan, an increase of 9.70% year-on-year. The profit growth of strategic emerging industry companies was outstanding. The net profit of 1696 companies was 12.511 billion yuan, up 55.30% year-on-year.

And in the new third board enterprises in the board after A-share listing, also often can achieve good results after listing. For example, the latest closing price of weiteng electric (688226), which was listed this week, was 196.72% higher than the offering price. The latest closing prices of the other two listed sealing technology and aerospace technology also increased by 180.63% and 252.96% respectively compared with the issuance price.

On June 30, Anxin securities once reported that after excluding the top 10 stocks, the average first day return rates of new third board enterprises on the science and technology innovation board, main board, growth enterprise market and small and medium-sized board were 731%, 281%, 673% and 450% respectively, and the average return rates of listed enterprises in January were 628%, 514%, 822% and 925%.

"Although driven by the selection layer, the trading activity of the new third board market has increased this year, but the overall value of the stock market is still low. Investors often have the opportunity to obtain high returns after the board transfer, and the stocks with IPO expectations tend to get additional attention from investors." There is a layout of the new third board of private sector personnel said.

More than ten enterprises give up IPO and "return" to select layer

Although more than 60 new third board enterprises "fled" and chose to delist and go public on the main board, driven by the expectation of the selective layer transfer board, many enterprises have changed the track and actively abandoned the IPO path and chose to "return" to the new third board.

According to the incomplete statistics of 21st century economic report, since 2021, more than ten companies, such as Jinxin mining, Dadi electric, optical valley information, Zhongyan Co., Ltd., dinosaur park, Jianke group, Kaide quartz and Optical Valley information, have changed their IPO plans and have chosen to make public offerings at the selected level.

Among them, enterprises such as zhongkeyi, Zhongyan shares, dinosaur park, Jianke group and Jinxin mining all chose to withdraw their IPO materials and terminate their listing when the IPO listing materials had been accepted. The rest of the new third board enterprises that have moved to the selected level directly change the application plate or withdraw the listing guidance materials in the guidance filing stage.

Only from the perspective of performance fundamentals, most of the enterprises whose performance can be checked in 2020 have realized profits and maintained the growth of net profits in the sample of enterprises returning to the selected layer. Among them, Zhongyan shares realized a net profit of 24.1232 million yuan in 2020, a year-on-year increase of 81.3%, and Kaide quartz achieved a net profit of 48.9176 million yuan in 2020, with a year-on-year increase of 57.87%.

The above-mentioned personnel of the new third board private-equity institutions said that although most of the new third board enterprises which "return" to the selected layer have good growth, the overall net profit scale is still small“ The overall profit is relatively thin, and there should be no model with a scale of more than 100 million. For these relatively small-scale enterprises, it will be more smooth to return to the selection layer through public offering and financing, and then try to go public through the transfer board. "

"This year, all the companies to be listed are facing the situation of stricter IPO audit standards. It is hard to say whether they can go to the meeting. Through the "small IPO" listing selection layer, and then turning the board to be listed on the science and technology innovation board or gem, the resistance in the early stage will be smaller. " There are senior investment banks in Beijing said.

Recently, the leaders of the regulatory level have also stated in public many times that they will promote the selective enterprises to realize through the transformation of the board. Yan Qingmin, vice chairman of the China Securities Regulatory Commission, said at the Fujian docking meeting of the capital market that the role of the new third board in serving "small, special and specialized enterprises" will be brought into play, and small and medium-sized enterprises will be guided to list on the new third board, and qualified enterprises will be promoted to be listed on the selective layer to the board.

Sui Qiang, general manager of the national small and medium-sized enterprise stock transfer system Co., Ltd., also said at the exchange forum of the local financial bureau that he would refine and refine the selection layer, including refining the operation arrangement of the transfer board listing, "ensuring the smooth and convenient transformation of enterprises, strengthening the role of linking up and down, and enriching the listing path of enterprises". The relevant statements have enhanced the confidence of enterprises to be listed on the selective layer transfer board.

"Soon, the semi annual report of the selected layer will also disclose that listed companies with excellent performance are expected to realize the transfer to the stock market, and can also meet the" three-year "Declaration format with the semi annual report. The market is concerned about who will first disclose the intention of listing on the board." Said the new third board business personnel of securities companies in East China.

However, the founder of Beijing Nanshan Investment Co., Ltd. proposed that although the countdown has entered the countdown to the start of listing on the stock exchange, it is still necessary for the Shanghai and Shenzhen Stock Exchange to issue specific operational regulations for enterprises to apply for listing on the board. In addition, the tax issues after the listing on the board have not been clearly defined. "As the CSRC has no right to clarify the tax, the authority to formulate or adjust tax policies lies with the Ministry of Finance and the State Administration of taxation. Maybe the CSRC is still in the process of communication and coordination with the Ministry of Finance and the State Administration of taxation."

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