Shenzhen Stock Exchange: 97 major asset restructurings were completed last year, with transaction value exceeding 400 billion
Beijing News On January 6, the Shenzhen Stock Exchange officially released news that mergers and acquisitions and reorganizations are an important way to optimize the allocation of stock resources in the capital market. In 2019, in accordance with the overall deployment of the China Securities Regulatory Commission on comprehensively deepening the reform of the capital market, the Shenzhen Stock Exchange actively implemented the requirements of the “four awe and one joint effort”, deepened the market-oriented reform of mergers and acquisitions, deepened the supervision of the “full chain” of mergers and acquisitions, and deepened Serve the high-quality development of listed companies, promote the function of market platforms and improve the efficiency of resource allocation, and help build a standardized, transparent, open, dynamic and resilient capital market.
Improve quality and efficiency, new bright spots
In 2019, Shenzhen-listed companies actively improved their quality through mergers and acquisitions, reorganized and upgraded, with significant results and frequent highlights. A total of 1,628 M & A and restructuring transactions were completed in Shenzhen. The total transaction amount reached 1.08 trillion yuan, accounting for 55.47% and 54.00% of the entire market, respectively. In terms of major asset reorganizations, 150 reorganization plans were disclosed with a total transaction amount of 513.426 billion yuan, an increase of 8.62% year-on-year; 97 major asset reorganizations were completed with a total transaction amount of 432.573 billion yuan (excluding supporting financing), an increase of 87.50% year-on-year. For the acquisition of listed companies, 604 acquisitions were disclosed throughout the year, an increase of 22.52% year-on-year, involving an amount of 287.13 billion yuan, an increase of 18.94% year-on-year.
The main features are as follows:
The first is to return to the origin and focus on the main business, condensing new momentum. The acquisition of listed companies based on industry logic has become mainstream, and the industrial integration reorganization has become the “main theme”, with the number and amount accounting for more than 60%, and the characteristics of the merger and reorganization industry and entities are more distinctive. The reorganization valuation further returned to rationality. The average value-added ratio of the reorganization target was approximately 1.8 times, which was a significant decrease of 55.93% from the previous year. Among them, the average value-added ratios of the reorganization targets of the Shenzhen Main Board, SME Board and GEM were 1.3 times, 1.7 times and 2.4 respectively. Times, the transaction logic is more rational and pragmatic.
Second, market-oriented service-side structural reforms have opened up a new situation. Throughout the year, Shenzhen state-controlled listed companies planned 37 major asset reorganizations, with transaction amounts reaching 287.02 billion yuan. The positive effects of mergers and acquisitions and reorganizations continued to appear. The platform integration of China Merchants Group ’s property management assets, the securitization of CITIC Special Steel Assets, Through reorganization and listing, it has participated in a series of demonstration cases such as the mixed reform of state-owned enterprises to promote the deep development of state-owned enterprise reform. China Merchants Shekou’s capital increase acquisition was successfully completed with a transaction value of 145.817 billion yuan, which is the largest restructuring plan in the A-share market for the entire year. Daye Special Steel, * ST Hehua, and other Shenzhen-based companies in the cement, nonferrous metals, steel, and chemical industries have continued their efforts in industrial optimization and integration, and the removal of excess capacity through mergers and acquisitions, and their development has reached a new level.
The third is to help private enterprises to rescue and develop and win new opportunities. In 2019, 87 privately held listed companies such as Hainan Haiyao and * ST Huangtai introduced strategic investors through equity transfers, integrated multiple resources, and reversed the financial dilemma. 29 Shenzhen privately-held listed companies such as East Asia and Adir have introduced state-owned capital to realize mixed ownership reform. 113 Shenzhen private enterprises disclosed the reorganization plan, which involved an amount of nearly 250 billion yuan, and used market-based methods to achieve bail-out development.
The fourth is to support innovation and upgrading of cross-border transactions and cultivate new momentum. More and more Shenzhen-listed companies have “introduced” and “going global” to improve the technical gold content, enhance core competitiveness, and realize industrial upgrading. In 2019, a total of 52 companies in Shenzhen City disclosed overseas M & A and restructuring transactions. China Mineral Resources intends to control the scarce global cesium resources through the acquisition of Tanco and other companies, and Ziguang Guowei intends to increase the smart security chip business through acquisition of Linsenx.
Fifth, the stock of services clarifies the market entrances and exits, and rejuvenates new opportunities. Since 2019, a number of Shenzhen-listed companies have activated market resources by absorbing mergers, reorganizations, and clearing-out asset replacements to resolve the risks of listed companies and improve the survival of the fittest. Shenzhen City disclosed 9 reorganization listing plans throughout the year, and actually the home price was 36 billion yuan. Wuhan Zhongshang entered the capital market and further cultivated the new retail of home furnishings. 15 companies implemented major asset sales, stripped poorly performing assets, and reduced burden. .
In addition, the marketization game is more adequate. Many restructuring schemes not only set performance commitments, but also designed excess performance reward arrangements, and some schemes stipulated additional rights, such as Suning Tesco’s acquisition of Carrefour China’s scheme, which stipulated that subsequent transferors and transferees should enjoy the remaining 20% equity of Carrefour China respectively. “Selling options” and “purchasing options” further strengthen the market-oriented game.
Three-pronged approach presents new weather
In 2019, the Shenzhen Stock Exchange will continue to deepen reforms, deepen supervision and in-depth services, optimize system supply, stimulate market vitality, encourage and guide listed companies to improve quality through mergers and acquisitions and reorganization, and further promote classified supervision, precise supervision, and “full chain” supervision to continuously improve supervision. Efficiency, give full play to the functions of the merger and acquisition reorganization market.
The first is to deepen reform. In terms of promoting regulatory innovation, it has provided suggestions for major reforms such as spin-off pilots, restructuring and optimization of listing standards, and pilot projects for convertible bonds. In terms of deepening effective supervision, it has integrated a number of memoranda, application guidelines and notices for the Shenzhen Stock Exchange, the Main Board, the Small and Medium-sized Enterprise Board, and the Growth Enterprise Market, unified the supervision standards, issued guidelines for the disclosure of major asset restructuring information, and promoted the standardized development of the market. In the implementation of reform measures, we have assisted the implementation of targeted convertible bonds, formulated procedures, enabled code ranges, and reformed system processes, and served Xinjin just to complete the registration of the first A-share convertible bonds issuance. As of now, there are 29 companies in Shenzhen Disclosure of the restructuring plan involving the issuance of directed convertible bonds; strict implementation of the new suspension and resumption of trading rules, the number of restructuring suspensions throughout the year decreased by 73.67% compared with the previous year; 46 companies directly disclosed the restructuring plan without suspension; support for corporate restructuring financing, FAW Car Waiting for 16 companies to disclose the debt repayment or replenishment plan of the raised funds, involving funds of 13.709 billion yuan, to meet the capital needs of listed companies.
The second is in-depth service. With the reform of state-owned enterprises as the core, we will effectively serve Shenzhen’s main board to become better and stronger. Throughout the year, we conducted nearly 100 visits, investigations and exchanges with state-owned and state-owned enterprises, organized and participated in state-owned enterprise reform training and lectures nearly 30 times, and strongly supported China Merchants Shekou, CITIC Special Steel, FAW Car, Dongfang Energy and other groups of state-owned enterprises to use M & A and reorganization. Be better and stronger. Focusing on the development of private enterprises, we will continue to serve the steady development of small and medium-sized enterprises. Throughout the year, several seminars and training sessions for regulators, market experts and listed companies were held to actively assist private listed companies in their rescue efforts, properly handle the transfer of 179 private companies’ equity, change of control rights, and introduce information disclosure to strategic investors. Suspension of resumption of trading and equity transfer, etc., reduced 135 pledged companies with a high proportion throughout the year, and supported 114 private enterprises to solve the problems in development and transformation through mergers and acquisitions. Among them, small and medium-sized private listed companies accounted for the majority. Guided by entrepreneurial innovation, actively serving the development and growth of the GEM. Actively serve the deep integration of capital and technology, and provide “one-stop” services in policy consulting, program adjustment, training guidance, and technical support. In 2019, more than 50% of the targets of GEM companies ‘mergers and acquisitions come from strategic emerging industries, such as Jiangfeng Electronics’ acquisition of Soleras Holdco through the industry to improve product types and further increase the market position in the field of sputtering targets.
The third is to deepen supervision. On the one hand, strengthen classification supervision and scientifically use supervision resources. Optimize the review mode of the reorganization plan. In principle, the reorganization plan will no longer be inquired. The inquiries on the reorganization plan involving the direction of industrial integration, transformation and upgrading will be reduced, and the reorganization plan for key companies and major risks will be strengthened. Inquiry. A total of 145 reorganization inquiry letters were issued throughout the year, of which 31 reorganization proposals involved the issuance of two inquiry letters. On the other hand, strengthen the “full chain” supervision and promote the standardized development of the market. In 2019, due to the overlapping effects of multiple internal and external factors, listed companies’ outstanding commitment risks and risks of goodwill impairment are more prominent. For example, Tianshen Entertainment made a provision of 4,060 billion yuan for goodwill impairment on the subject of restructuring, resulting in a company loss of 7.151 billion yuan. Another example is Orient Seiko, Tanaka Seiki, etc., the performance of the restructuring target is not up to expectations, or the parties to the transaction have disputes over performance compensation. The Shenzhen Stock Exchange continues to track the implementation of the reorganization. It must ask every company involved in related issues, strengthen supervision and coordination, and if necessary, request on-site inspection and audit intervention, and disciplinary actions against 11 companies that have not fulfilled their performance compensation commitments.
In 2020, the domestic M & A and restructuring market is booming. The Shenzhen Stock Exchange will always adhere to the direction of marketization and rule of law, conscientiously study and implement the new securities law, follow the unified deployment of the Securities Regulatory Commission, focus on promoting the quality action plan of listed companies, advance the implementation of the requirements for deepening the marketization reform of mergers and acquisitions, and improve the basic system. Improve regulatory effectiveness, service levels, stimulate market vitality, play the role of the main channel for optimal allocation of resources, promote technological innovation, promote industrial transformation and upgrading, support listed companies to achieve high-quality development through mergers and acquisitions, and strive to provide higher quality for the development of the real economy. More efficient financial services.
Edit Wang Jinyu