GEM launch and refinancing policy to land LED industry to accelerate the pace of mergers and acquisitions

[High- tech LED reporter Zhao Hui] The refinancing problem that once plagued the GEM listed companies was finally resolved at the policy level.

On May 16, the China Securities Regulatory Commission officially issued the revised Measures for the Administration of Initial Public Offerings and Listing on the Growth Enterprise Market, and the newly established Interim Measures for the Administration of Securities Issuance of GEM-listed Companies, which will be implemented as of the date of promulgation.

Previously, the two methods have passed the commentary phase of more than a month.

“It highlights the positioning of the GEM market, helps to meet the financing needs of more SMEs, and is highly operational.” This is the common understanding of the two approaches.

The threshold for the initial threshold of the GEM and the refinancing method to highlight the small, fast and flexible innovations have become the highlight of this reform.

Since the establishment of the GEM, the scale and quality of listed companies have been increasing, and the role of supporting strategic emerging industries has become increasingly apparent. The GEM has concentrated on a number of emerging industry listed companies with LED, new energy, environmental protection and new materials. . However, the GEM threshold of continuous earnings for the GEM has also hindered more emerging industry companies from entering the GEM.

Now, the high “threshold” that has hindered the listing of emerging industries such as LEDs is falling, and emerging industry companies are expected to usher in a new wave of listings on the GEM.

GEM companies that have already listed can also make mergers and acquisitions through refinancing and other means, and become bigger and stronger.

According to the announced GEM launch method, the listing threshold is “continuously profitable in the last two years. The net profit in the last two years has accumulated to not less than 10 million yuan and continues to grow; or the profit in the most recent year, and the net profit is not less than 500. 10,000 yuan, the operating income in the most recent year is not less than 50 million yuan, the growth rate of operating income in the last two years is not less than 30%", reduced to "continuous profit in the last two years, the net profit in the last two years has accumulated no less than 10 million Yuan; or profit in the most recent year, the operating income in the most recent year is not less than 50 million yuan."

This means that the income is above a certain scale, and only one year of profitable enterprises can be listed on the GEM, and the reporting enterprises are no longer limited to the nine major industries.

The implementation of the new measures will pave the way for a large number of LED companies that are affected by the economic environment and market fluctuations and cannot achieve profit for two consecutive years.

Since last year, several LED companies have terminated the IPO review, and many of them have not been able to maintain their earnings for two consecutive years and have no choice but to suspend the IPO.

"The new regulations are undoubtedly a big benefit for companies that want to go public, especially those that have good growth but whose performance is highly volatile due to macroeconomic and industrial development." Researchers with brokerages believe that they have already launched listings because of poor performance. The company is likely to "return".

These companies that have experience in IPO filing and have terminated IPOs due to “slow performance” are also considered by brokerage institutions to be the most likely to rekindle the ambitions of GEM due to the New Deal.

"High-tech LED" reporter learned that those LED companies that have withdrawn IPOs have not given up, and there is still a willingness to list. The GEM is the most considered option. After the New Deal came out, LED companies have already consulted with brokers about the situation.

For the refinancing of the GEM, which is most concerned about the industry's combined capital market, the measures stipulate that the issuance conditions for the refinancing of the GEM include the profit for the last two years; the cash dividends for the last two years; the asset-liability ratio at the end of the latest period is higher than 45%. A total of 6 conditions.

"Most of the companies listed on the GEM are emerging industries like LEDs. They are in a high-speed growth period. If they can't refinance for a long time, it is not conducive to the long-term development of the company." The LED company listed in the company believes that the LED industry is now During the integration period, M&A needs the support of funds, and the introduction of refinancing methods can be described as timely rain.

Gui Haoming, marketing director of Shenyin Wanguo Securities Research Institute, also said in a research report that a number of key enterprises in the various sub-sectors have emerged in the GEM companies. This is inseparable from the borrowing of the capital market and the accelerated development of funds through IPO. A reasonable and efficient refinancing system can be described as a new leap for these companies.

Since the beginning of last year, the integration tide of the LED industry has been rising, and M&A has been frequent.

Furui Electronics has acquired Mairui Optoelectronics, Lianjian M&A Timeshare Media, Tongfang Shares to acquire Zhen Mingli, etc. Recently, Hongli Optoelectronics acquired a 30% stake in Dongguan Xinquan Optoelectronics Technology Co., Ltd.

Changfang Lighting, Ganzhao Optoelectronics, and Hongli Optoelectronics are still in the stock suspension due to major asset restructuring.

"The cost performance of LED lighting products has a strong advantage. The outbreak of the lighting market is certain. This year is mainly to test whether the performance of LED companies can meet market expectations." Zhou Yi, a researcher at Huatai Securities, believes that LED companies rarely have Enterprises with an output value of more than 1 billion yuan, how to quickly become bigger and stronger, need more mergers and acquisitions, restructuring, and shareholding in the LED industry.

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