A-share companies disclosed 1251 termination matters during the year, and what signals did the seven types of “discontinuations” reveal?
Our reporter Zhang Xinchang Xiaoyu
According to data from Flush Shun iFinD, as of December 30 before the press of the Securities Daily (the same below), A-share listed companies in 2021 have disclosed 1,251 termination matters (a small number of matters are the key minority of listed companies), mainly seven The broad categories include refinancing, restructuring and acquisition (including investment, the same below), fundraising projects, repurchases, (key minority) share reduction, spin-off and listing, and land auctions.
In addition, individual termination matters involve the termination of overseas project construction, asset donation, etc.
According to observations, there are sufficient reasons for listed companies to disclose the above "dismissal" matters, but the capital market does not trust the reasons, and the information disclosure system has a powerful retrospective function so that investors can distinguish right from wrong.
Unagreement on the transaction is the main reason
Negotiation difficulty "more than love"
Restructuring and acquisitions often have a significant impact on the future development of listed companies, so they have attracted much attention from the market.
In 2021, the reorganization and acquisition of listed companies are in full swing, but some cases have ended sadly.
Statistics show that during the year, A-share listed companies announced the termination of reorganizations and acquisitions totaling 237.
Specifically, the “failure to reach agreement” between the parties to the transaction due to terms and prices is one of the most important reasons for the reorganization and termination of acquisitions of listed companies, involving 30 cases.
For example, on the evening of July 23, two leading companies in medical information technology both issued announcements stating that they had decided to terminate their plans for major asset restructuring.
Regarding the reasons for the termination, the two companies stated that the two parties in the transaction could not agree on the core terms.
Senior investment banker Wang Jiyue told the "Securities Daily" reporter, "There are many situations in which the mergers and acquisitions of listed companies are terminated. Most of them are due to lack of agreement. M&A negotiations are more difficult than falling in love. A small number of cases have been rejected by the regulatory authorities. In these cases, the proportion of rejections due to related-party transactions is relatively high."
"Not all mergers and acquisitions are beneficial to listed companies. The key is whether the two parties can produce synergy." Yang Delong, chief economist of Qianhai Kaiyuan Fund, said in an interview with a reporter from "Securities Daily" that if there is insufficient synergy, the brakes should be timely. necessary.
Fixed increase time window is the key
There are two "folding halberds" in the company during the year
Refinancing is an important manifestation of the investment and financing function of the capital market, and it is also the "identity dividend" of listed companies, which continues to provide capital momentum for their development.
Among them, private placement has been widely adopted due to its relatively small market impact.
In the first 11 months of this year, A-share listed companies implemented more than 410 fixed increases, and the amount of funds raised exceeded 700 billion yuan.
But the termination of fixed increase also happens from time to time.
Statistics show that during the year, 154 listed companies announced the termination of non-public offerings amounting to 156.
Among them, a listed medical company terminated its fixed growth plan for 2020 in January; it terminated its fixed growth plan for 2021 in August.
In this regard, the company stated through an announcement that the company actively promotes the issuance of non-public A shares, comprehensively considers the changes in regulatory policies and capital market environments, and combines the actual situation of the company, the company’s market value performance, and the coordination of equity financing opportunities. factor.
The company and the non-public issuance target agreed through friendly negotiation, and after careful analysis, it was decided to terminate the non-public issuance of A shares.
Looking at the various reasons for the termination of fixed increase of listed companies, although on the surface it often involves "changes in the market environment, changes in fundraising projects, and changes in the issuance of shares to purchase and purchase bids", etc., but the core lies in whether the time window for fixed increase is appropriate, Whether the quality of the project is excellent, etc.
Wang Jiyue said that in 2021, there are many cases of termination of non-public issuance of A shares, many of which are due to the failure to select the issuance window and the final approval has expired.
However, the approval cannot be restarted simply after the expiration date, and it has to be re-applied for refinancing.
Since the beginning of this year, some A-share listed companies have terminated the issuance of convertible bonds or H-shares. The former has a total of 44 cases and the latter has 7 cases.
For example, some Sci-tech Innovation Board companies stated that since applying for the issuance of convertible corporate bonds to unspecified targets, companies and intermediaries have actively and orderly promoted related work, taking into account the current capital market environment, regulatory policies and actual company conditions, and capital operations. According to the plan, the company decided to terminate the issuance of convertible corporate bonds to unspecified objects and withdraw the application documents after careful research and communication with intermediary agencies.
Another listed company stated that the termination of the H-share issuance was "in view of the company's current operating conditions."
More than 90% of companies announced a "turn"
Permanently replenish working capital
The investment direction of the raised funds of a listed company is not only related to the development of its main business, but also related to the "money scene" of investors.
According to relevant regulations, the use of raised funds shall generally be consistent with the promises in the prospectus or relevant prospectus.
However, in actual operation, some listed companies have changed their fundraising investment direction (terminating the original fundraising project).
Statistics show that 99 listed companies terminated 112 fundraising projects during the year.
Among them, more than 90% of the companies will raise funds for "permanent supplementary liquidity."
It is not difficult to comb through the announcements of listed companies to find that the termination of some fundraising projects is "always unavoidable."
For example, some projects have undergone changes in the market and regulatory environment due to long financing or approval procedures, and are currently unable to be implemented smoothly.
In addition, some companies are suspected of illegally terminating the original fundraising projects, and even some companies have been punished by the regulatory authorities for unauthorized changes in the use of funds raised by the initial public offering and fraudulent information disclosure. In fact, the controller has been banned from entering the market.
“There may be two situations in the termination of fundraising projects, namely subjective intentional and unintentional.” Liu Junhai, director of the Institute of Commercial Law of Renmin University of China, told a reporter from the Securities Daily, “Unintentional is divided into no-fault and unintentional. 'Due to force majeure factors, changes in circumstances, etc., the company's business sector has shrunk, and the decision was not expected to be'no fault;' the feasibility study report of the raised funds is not solid, the financial consultants are not cautious, and the relevant strategy committees of listed companies are not rigorous in decision-making, resulting in the overall If the quality of decision-making is not high, it is a fault. Intentionally, it is actually circling money. Although they know that the funds are not well invested, the major shareholders, actual controllers, etc. embezzle, embezzle, or embezzle these funds for other purposes through unfair related transactions Similar situations seriously infringe on the right to know, choose and invest in small and medium-sized investors. Therefore, for the termination of fundraising projects, supervisory measures should be based on the situation and the right medicine should be adopted to prevent listed companies from trapping money and reduce harm to the interests of small and medium-sized investors. ."
Chen Li, chief economist and research director of Chuancai Securities, also said in an interview with a reporter from Securities Daily that there are many reasons for the termination of fundraising projects, if it is due to a major change in the industry environment or a major change in profit expectations. , It is reasonable; if it is a major shareholder who changes the use of funds without authorization, or transfers funds without using it for the company’s business development, it is a serious violation of the interests of small and medium investors.
Therefore, the feasibility of fundraising projects must be fully studied and demonstrated. At the same time, it is necessary to strengthen the supervision and accountability of the flow of funds, and urge listed companies to pay attention to operation and management.
Key few show confidence
Still need shareholders "not bad money"
Among the seven types of termination matters, the reduction of holdings is the most special.
On the one hand, the subject of information disclosure is a listed company, but the implementation subject is a key minority such as actual controllers, major shareholders, directors and supervisors of the listed company; on the other hand, termination of shareholding is often welcomed by the market.
"Securities Daily" reporter noted that since the beginning of this year, investors have conducted more than 10,600 questions and answers with relevant listed companies on share reduction through Shanghai and Shenzhen Stock Exchanges. This reflects the market's attention to share reduction from one side.
According to the data, during the year, 276 listed companies on the three major stock exchanges in Beijing, Shanghai and Shenzhen disclosed 308 announcements on key minority and important shareholders' early termination of their shareholding reductions.
Judging from these reasons for the termination of the reduction, most of the implementation entities hope to express their confidence in the development of listed companies by terminating the reduction.
Yang Delong said, “The major shareholders of listed companies, directors, supervisors, and senior executives who have not reached the upper limit of their shareholdings were terminated early, indicating that they are confident in the company’s development prospects and are a positive signal to the market.”
Of course, the termination of the reduction of holdings by the key minority needs cash flow support.
Since the beginning of this year, the high proportion of pledges by major shareholders of listed companies has decreased significantly.
According to the data, as of now, there are 297 listed companies whose controlling shareholders' equity pledge ratio exceeds 80%, a decrease of 45 and 141 from the end of 2020 (342) and the end of 2019 (438) respectively.
Subsidiary independence and business fit
Is the key to a successful spin-off and listing
It has been more than two years since the A-share spin-off and listing rules came into effect at the end of 2019.
In the first half of this year, the "A split A" finally "bloomed". According to a reporter from the Securities Daily, as of now, many spin-off subsidiaries have been successfully listed.
Judging from the selection of the spin-off and listing sectors, about 70% of listed companies have chosen the Sci-tech Innovation Board and ChiNext.
However, some listed companies have chosen to "stop" the spin-off and listing.
Data show that during the year, six listed companies terminated their spin-offs and listings.
According to Chen Li, there are many reasons for the termination of the spin-off and listing. For example, some subsidiaries cannot meet the listing conditions due to changes in performance; other subsidiaries have too large related-party transactions with the parent company; and some subsidiaries have less than expected valuations.
In addition, whether the spin-off and listing can succeed, the professional capabilities of intermediary agencies and audit institutions are also crucial.
On the evening of December 27, Angel Yeast issued an announcement stating that as of June 30, Hongyu Packaging Materials, a subsidiary to be spun off to be listed on the GEM, achieved a net profit of 17,640,900 yuan after deducting non-recurring gains and losses, a year-on-year decrease of 46.41%. .
Taking into account the impact of changes in the external business environment such as the sharp rise in upstream raw materials of Hongyu packaging materials on its production and operations, as well as comprehensive consideration of changes in the capital market environment and future business strategic positioning, it is necessary to reorganize and arrange capital operation planning.
It is proposed to terminate the spin-off of its subsidiaries to be listed on the Growth Enterprise Market.
In the future, Hongyu Packaging Materials will continue to optimize the existing production layout and product structure in accordance with the established plan to promote better business development.
When the conditions are ripe, the subsequent company will choose the opportunity to restart the spin-off and listing.
Chen Li believes that not all listed companies are suitable for spin-off and listing. “Only those subsidiaries that are relatively stable in operation, especially those that can maintain a high degree of independence, and have fewer connected transactions with the parent company, are suitable for spin-off and listing. "
36 single repurchase "change your mind"
Some investors expressed disappointment
Since the beginning of this year, many listed companies have sent positive signals to the market through "repurchase".
According to data from Fong Shun iFinD, as of December 30, a total of 387 listed companies had issued 412 repurchase plans during the year (based on the date of the board's plan announcement), an increase of 75% compared with 235 in the same period last year.
In the eyes of market participants, as market styles switch, valuations of certain industries and companies continue to decline, and listed companies hope to convey confidence to the market through repurchase.
However, 36 listed companies terminated the repurchase during the year.
In this regard, most investors expressed disappointment.
For example, an investor "expressed dissatisfaction" on the interactive platform of the Shanghai and Shenzhen Stock Exchanges and asked a listed real estate company, "Isn't it a loss of credit to terminate the repurchase without authorization!"
Yang Delong believes that there are many situations that cause the termination of repurchase, which may be due to the shortage of funds; it may also be the increase in the stock price, which leads to the increase of repurchase costs; or the decrease in the necessity of repurchase.
Chen Li said that most investors hope that listed companies will actively repurchase, and by writing off part of the share capital, the company's per share value will increase.
Only happens sporadically
Expect more universality
According to combing, in 1251 termination matters, although there are only a handful of land-use rights involved, they have attracted much attention from investors.
According to data from Flush Shun iFinD, there are more than 500 announcements related to "land use rights" disclosed by A-share listed companies this year, most of which are listed companies (including subsidiaries) participating in bidding or purchasing land use rights; in addition, there are nearly 40 announcements. The announcement points to listed companies buying properties.
Non-real estate listed companies' use of 100 million yuan to buy and build houses has always been a controversial topic. In recent years, the story of "selling houses and turning losses" by listed companies has also been widely spread.
However, in the context of "housing and housing are not speculation", the self-use attributes of office buildings are now significantly enhanced, and the investment attributes are rapidly declining.
The market is even more expecting that listed companies will stop buying land and properties and focus their funds on the development of their main businesses.
Judging from related listed company announcements, Sun Company of an agricultural company originally planned to participate in the bidding for a piece of state-owned land use rights. In order to reduce the risk of uncertainty in this investment, after careful consideration, the company's board of directors agreed to terminate its participation in the auction.
Chen Li said that now that China's economic development has entered a green and sustainable development cycle, listed companies need to continuously strengthen technological breakthroughs and high-quality development in their own fields, instead of relying on real estate investment income.
(Securities Daily)