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www.LegiEX.com is it good? What is the signal from the public issuance

www.LegiEX.com is it good? What is the signal from the public issuance? Public reissue and re-financing of refinancing! On November 29, 2019, Zijin Mining issued an additional 2.346 billion shares for trading on the Shanghai Stock Exchange, raising a total of 8 billion yuan.

This is the first public issuance project in Shanghai since five years and the largest public issuance project in the market in eight years.

Since May 2014 when Cangzhou Dahua completed the only single public issuance project of the year, the public issuance has been silent, and there has been a five-year blank period. Until October 2018, Topstar released the public issuance plan and reached the first public announcement Only after the achievement of additional issuance will it return to the perspective of investors.

At present, a total of eight listed companies have launched a public issuance plan, and the public issuance seems to be gradually active signs.

The tools for refinancing of listed companies mainly include rights issue, public issuance, non-public issuance, convertible bonds, preferred shares, and corporate bonds.

Compared with the targeted additional issuance for a small number of specific investors, and the placement of shares only for the original shareholders, the public additional issuance has both the original shareholders' proportional placement and subscription, and all investors participate in the investment, giving more investors to participate, and the additional issuance There is no lock-up period for the shares. After the issuance is completed, the shares can be listed and circulated on the first day, which facilitates investors to change hands. It is particularly advantageous in this regard.

However, in recent years, the refinancing market has been largely dominated by non-public offerings, and public issuance has basically disappeared. The main reasons are concentrated in two aspects:

First, the requirements for public issuance are more stringent, and higher standards are proposed for the issue price and the issuer ’s dividends and profits. Moreover, the issue price has no advantage over the non-public issue, and the subscription method is limited to cash, with limited flexibility. ;

The second is to adopt an underwriting model for public additional issuance, focusing the issuance risk on the lead underwriter. In the few public issuance cases, there have been cases where underwriters were forced to eat huge additional shares and had to cut meat in the secondary market.

Therefore, when listed companies consult underwriters on refinancing channels, public offerings are often not recommended.

The recent public offering has regained favor in the market, mainly related to the new refinancing regulations implemented in February 2017 and the new regulations on reducing shareholdings in May of the same year.

These two rules restrict the amount and frequency of non-public offerings, and reduce the arbitrage space by highlighting market-oriented pricing mechanisms. With this trade-off, the public offering is the only one with unlimited financing. Under the balance of interests, the public issuance of a public offering has made a comeback.

But how long this public fever can last, no one can make an assertion. Just on November 27, Xinquan ’s share disclosure announcement stated that the company failed to implement this public issue of additional A shares within the 6-month validity period (that is, before November 28, 2019) specified in the CSRC ’s approval document. The CSRC's reply on the company's public issuance of additional A shares automatically expires.

The public offering that was finally approved was thus wasted in vain. This is undoubtedly a cold water for the market prospect of public issuance, but it also reflects that listed companies must be cautious in implementing public issuance. Only the prospects of listed companies can be Only after satisfying discerning investors, dare to implement a public offering.

In addition, the recent substantial revision of the new refinancing regulations has loosened the restrictions on various aspects of non-public issuance to a certain extent, shortened the lock-up period, and increased the number of objects issued to no more than 35. Popular choice for refinancing.

From the perspective of the capital market cycle, the node of the last round of public issuance of additional sales is the time when the non-public offering began to blow out. Of course, public additional issuance is just one of a variety of refinancing channels for companies, each with its own advantages and disadvantages, not to mention which one is better.

The reason why investors are willing to invest real money into listed companies is in fact optimistic about the company's future prospects. They are willing to become shareholders and the company to grow together. The investment direction of listed companies to raise funds and the company's future operations can grow in an orderly manner This is the key to affecting stock price movements.

Therefore, as long as the quality of the pan of the listed company is too high, and why not overwhelm with the rice borrowed from where, you can make a delicious meal.

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