On February 11 this year, the China Securities Regulatory Commission issued and implemented the "Regulations on the Supervision of the Interconnection of Depository Receipts Business of Domestic and Overseas Stock Exchanges" (hereinafter referred to as the "New Regulations").In the past five months, 13 A-share companies have planned the issuance and listing of overseas GDRs (Global Depositary Receipts), and the progress has been rapid.The industry generally predicts that the first landing case of this year may appear as soon as this month.
On July 8, two listed companies announced the latest progress in promoting the issuance and listing of GDR. Among them, Mingyang Smart disclosed that the GDR prospectus has been approved and published by the UK Financial Conduct Authority, and Joincare said that GDR-related proposals have been reviewed and approved by the general meeting of shareholders.
According to the new regulations, eligible listed companies on the Shanghai and Shenzhen stock exchanges can issue GDRs, and the listing places are the United Kingdom, Switzerland and Germany.Based on the above 13 A-share companies, currently only Mingyang Smart chooses the United Kingdom, 10 choose Switzerland, and the remaining 2 have not determined the listing place.Switzerland is the most popular choice.
A New Choice for Listed Companies' Financing
Judging from the public information, Mingyang Smart's GDR prospectus has been approved by overseas regulatory agencies, and it is only one step away from listing, ahead of other companies.This also further advances the industry's expectations for the implementation of GDR within the month.
Flush iFinD data shows that, from the perspective of the progress of overseas GDR issuance and listing, among the remaining 12 listed companies, Keda Manufacturing and GEM have made rapid progress. Both announced at the end of June that the GDR application was approved by the China Securities Regulatory Commission; The GDR application is being accepted by the China Securities Regulatory Commission; the GDR-related proposals of Shanshan, Fangda Carbon, and Joincare have been approved by the general meeting of shareholders; the rest of the companies are also actively advancing.
From the past, successful cases are concentrated in the London Stock Exchange.Since Huatai Securities opened the GDR listing channel under the Shanghai-London Stock Connect in 2019, three companies including China Pacific Insurance have succeeded one after another, and all chose the London Stock Exchange.In contrast, this year SIX has become the main destination for overseas GDR listings.
SIX CEO Dieselhof said in an interview with the media recently that for Chinese companies wishing to raise funds in the Swiss market, SIX has established a dedicated GDR listing and trading department, which will help improve the availability of these securities. fluidity.
The reporter noticed that some companies have terminated plans such as fixed increase and H-share financing, and chose to plan GDR issuance and listing.For example, at the end of June, Superstar Technology terminated the issuance of overseas listed foreign shares (H shares) and listed on the Hong Kong Stock Exchange, and started preparations for the overseas issuance and listing of GDR.
Sun Lijun, co-head of the Global Investment Banking Department of UBS Securities, told the "Securities Daily" reporter that compared with the 20% discount for the fixed increase in A-shares, the price of the lowest 10% discount for GDR is higher, and it is also higher than the current A-share and H-share price. The discount is smaller and the financing efficiency is improved.At the same time, GDR does not have the minimum public float ratio (i.e. the minimum issuance ratio) for H-share IPOs, so as to avoid significant dilution of existing shareholders' equity.
"Compared with A-share refinancing and H-share IPO, GDR financing has the advantages of shorter review time, free conversion with A-shares, and flexible issuance ratio. Large-scale private enterprises with strong demands and other demands have obvious advantages in issuing GDRs." Lu Jing, partner and managing director of Sullivan Greater China, told the "Securities Daily" reporter.
Lu Jing further stated that GDR has an advantage in the overall release time.If the domestic and overseas audits are successful, the GDR audit time is about 1 month to 2 months, and the overall implementation time is expected to be 4 months to 5 months.It usually takes more than half a year from the board of directors' plan to obtaining approval for A-share fixed increase, and H-share IPO generally takes 6 to 8 months.
A number of lithium battery faucets sprint
Among the teams sprinting for overseas GDR issuance and listing this year, the leading lithium battery companies are particularly active.From the perspective of industry classification, the above 13 companies are all from the manufacturing industry, and the power equipment industry (5) has the most companies. Among them, China Xuan Gaoke, Shanshan, Xinwangda, and GEM are the leading companies in the lithium battery industry.
Sun Lijun said that in terms of enterprise types, it is mainly concentrated in the manufacturing industry. It is believed that it will expand to more industries in the future, and some innovative or advanced enterprises will emerge."In addition, ESG is a topic that is getting more and more attention. It is hoped that issuers can have a bright spot in ESG, and regulators, investors and the market will pay more attention to the green economy or companies that meet the concept of ESG."
Judging from the purpose of issuance, lithium battery companies are competing to strengthen their international layout.For example, Guoxuan Hi-Tech stated that the funds raised by the company’s GDR issuance will be mainly used for the company’s international industrial layout and to speed up the company’s international strategy; Shanshan Co., Ltd. said that the company will continue to increase investment in overseas market resources and establish a global market. The product innovation research and development, production and sales system will further enhance the company's global competitiveness.
"At present, lithium resources are becoming more and more important. Many companies are vigorously promoting the strengthening, supplementing and extending of the lithium battery industry chain. Cross-border cooperation and cross-border cooperation in the lithium battery industry have become the development direction of the industry. Advantageous companies are using industrial scale and capital advantages to enhance the industrial chain. The competitiveness of key links in order to quickly become bigger and stronger in the deterministic growth trend of the industry." Qi Haishen, president of Beijing Teyi Sunshine New Energy, told the "Securities Daily" reporter.
Our reporter Xing Meng
