Refinancing review has become more stringent, and many listed companies have put their private placements on hold.

Refinancing review has become more stringent, and many listed companies have put their private placements on hold.

Since the Shanghai and Shenzhen Stock Exchanges issued five specific measures to optimize refinancing regulatory arrangements, more than ten listed companies have announced the termination of private placement matters, including many large-scale private placement projects worth tens of billions of yuan. Judging from the reasons, the inability to meet the requirements of new refinancing regulations is an important reason for the termination of private placement projects.

Judging from the data from this year, the current refinancing scale during the year has not exceeded 600 billion yuan, and it is almost a foregone conclusion that it will shrink compared with last year.

 More than ten companies terminated private placement matters

On the evening of December 5, Sanxiang Impression issued an announcement stating that it had received the “Decision on Terminating the Review of Sanxiang Impression Co., Ltd.’s Application for Issuing Stocks to Specific Targets” issued by the Shenzhen Stock Exchange on December 4. Previously, on November 16, Sanxiang Impression held the 16th (temporary) meeting of the 8th board of directors and the 14th (temporary) meeting of the 8th board of supervisors, and reviewed and approved the “About Termination of the Issuance of Stocks to Specific Targets in 2022″ and Planning the Issuance of Stocks to Specific Objects in 2023”, agreeing that the company will terminate the issuance of stocks to specific objects in 2022 and re-plan the issuance of stocks to specific objects in 2023.

Recently, Sanxiang Impression is not the only listed company to announce the termination of private placement matters. On the evening of December 1, Luxshare Precision announced that the company would terminate the 13.5 billion yuan non-public issuance of shares in 2022, and this has become the largest amount of funds expected to be terminated after the release of new refinancing regulations. On the night of the 1st, companies such as Longjing Environmental Protection and Yuntianhua also announced that they would terminate their private placements.

In fact, since the Shanghai and Shenzhen Stock Exchanges issued five specific measures to optimize refinancing regulatory arrangements on November 8, at least 16 companies have announced the termination of private placement matters, many of which have “stranded” huge private placements of up to 10 billion yuan. .

From the perspective of industry distribution, there are three companies in the field of agriculture, forestry, animal husbandry and fishery that have terminated their private placements, namely Luoniushan, Yongan Forestry, and Baolingbao. Among them, Luoniushan plans to raise the highest amount. The original plan is to raise no more than 1.796 billion yuan, which will be used for the Luoniushan Qionghai breeding pig farm project, the acquisition of minority shareholders’ equity in subsidiaries and the construction of breeding bases, Luoniushan digital intelligence construction projects and Supplementary working capital items.

There are also two companies in the electronics industry that have terminated their private placements, namely Luxshare Precision and Chuanyi Technology. Luxshare Precision released a non-public stock issuance plan in February 2022. It plans to issue no more than 2.123 billion shares to no more than 35 specific targets and raise no more than 13.5 billion yuan. The funds raised will mainly be used for the construction of smart wearable device product production lines. and technology upgrades and other 7 projects. Chuanyi Technology’s previous announcement showed that it plans to raise no more than 3 billion yuan in additional funds for the second phase of the 5.5GWh sodium-ion battery manufacturing project and to supplement working capital.

  “Strict and tight” optimization of refinancing rhythm and scale

On November 8 this year, the Shanghai and Shenzhen Stock Exchanges released five specific measures to “optimize refinancing regulatory arrangements”, including:

The first is to strictly limit the refinancing of listed companies in cases of broken shares or net losses. Listed companies are required to have no issuance or net loss on any day 20 trading days before the board meeting of the refinancing plan and 20 trading days before the launch of the issuance.

The second is to strictly control the financing interval of enterprises with continuous losses. If a listed company has continuous losses in net profit attributable to the parent company (the lower before and after deducting non-recurring gains and losses) in the last two fiscal years, the board of directors resolution of this refinancing plan will be separated from the previous date. The date on which the raised funds will be received shall not be less than eighteen months.

Third, if a listed company has a relatively high proportion of financial investment, the amount of funds raised in this refinancing must be reduced accordingly.

The fourth is to strictly control the use of previously raised funds. When the board of directors of a listed company convenes its refinancing plan, the previously raised funds should be basically used up. At the same time, listed companies must fully disclose the reasons and rationality for delays, changes, and cancellations of previously raised projects, the reasons why the benefits of previously raised projects are lower than expected, and whether the implementation of the raised investment projects will help improve the company’s asset quality, operating capabilities, and profitability. Ability and other relevant information.

The fifth is to strictly control the relevant requirements that the funds raised through refinancing should be mainly invested in the main business. The refinancing raised funds projects of listed companies must be closely related to the existing main business, and must have obvious synergy with the original business after implementation. Listed companies are urged to give greater prominence to their main businesses, focus on improving the quality of their main businesses, and prevent blind cross-border investments and diversified investments.

From the content point of view, in the future, there will be companies with broken profits and net profits, companies that have suffered losses for two consecutive years, companies with a high proportion of financial investment and unused funds from previous fundraisings, companies that are not short of money, and companies that are keen on cross-border investment and diversified investment. refinancing will be restricted.

“The introduction of new refinancing regulations has brought about the standardization, rationalization and transparency of the refinancing market. The new regulations further regulate refinancing behavior, improve the transparency and rationality of refinancing, and prevent some companies from excessive financing or malicious speculation through refinancing. . The new regulations can also guide market funds to invest more rationally, prevent some investors from blindly following the trend or investing blindly, and protect the legitimate rights and interests of investors. In addition, the new regulations can also promote market stability and healthy development, and improve the overall quality and level of the market. .” Tian Lihui, Vice President of Guangxi University and Dean of the Financial Development Research Institute of Nankai University, told a reporter from the Economic Information Daily.

“The new regulations have raised the threshold for refinancing and objectively reduced the supply of stocks, thus protecting the current limited liquidity of the market. The new regulations also have the function of guiding market standardization.” Research on Digital Economy and Financial Innovation at Zhejiang University International United Business School Center co-director and researcher Pan Helin told reporters.

 The scale of refinancing throughout the year has shrunk to a “foregone conclusion”

Judging from the situation so far this year, the overall popularity of the refinancing market is slightly higher than that of the IPO market. However, since September, the amount of A-share refinancing has also begun to decline significantly year-on-year. At present, there are obvious signs of a collective slowdown in equity financing such as IPOs and refinancing.

Wind data shows that using the listing date as the statistical standard, as of December 8, the number of A-share companies this year has been 311, and the funds raised by the additional issuance are 555.988 billion yuan; the number of A-share companies is 4, and the funds raised by the rights issue are 13.245 billion yuan. . Based on this calculation, the total refinancing scale exceeds 569.2 billion yuan. Compared with last year, the number of companies issuing additional rights shares this year has not declined significantly. However, compared with last year’s 784.4 billion yuan, it is almost a foregone conclusion that the size of the refinancing market will shrink year-on-year.

Judging from monthly data, the amount of A-share refinancing has also declined significantly since September. In terms of private placement, Wind data shows that the scale of A-share private placement in September this year was only 22.693 billion yuan, a sharp drop of more than 67% year-on-year. Performance in October and November was also relatively sluggish, with private placement amounts of 26.441 billion yuan and 31.883 billion yuan respectively. In January and February this year, this figure was as high as 99.956 billion yuan and 79.959 billion yuan respectively. In terms of rights issue, no listed company has implemented rights issue since September.

Tian Lihui said that for listed companies, tightening equity financing standards will limit their financing channels and financing capabilities. When equity financing is strictly controlled, the company may need to seek other financing methods, such as debt financing or bank loans, which will increase the company’s debt burden and financial risks. For brokerage institutions, tightening equity financing standards may affect their business volume and income. At the same time, if the standards for equity financing are too strict, it may also increase the risks and uncertainties of brokerage institutions, because they will need to face more scrutiny and supervision.

Pan Helin also believes that tightening equity financing is bad news for listed companies that are strapped for funds. Listed companies need to seek other financing channels, such as bond financing and bank credit. In his view, the tightness of the financing market depends on both supervision and liquidity. The current liquidity of the capital market does not support the expansion of refinancing, and tightening is an inevitable choice.

Regarding the future development of the refinancing market, Tian Lihui said that due to the influence of various factors such as the policy environment, economic conditions, securities market trends and corporate development needs, there may be an orderly expansion of the market size, the development of diversified and innovative financing methods, and the improvement of regulatory transparency and standards. the trend of. In addition, more diversified financing methods are expected to emerge, including private placement, convertible bonds, private equity funds and other methods. From a mid- to long-term perspective, as the economy develops and the market continues to mature, the refinancing market still has broad development space and potential.

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