New Third Board SharesRepoThe implementation measures have been in place for nearly five months. From the market reaction, as of May 14, 29 listed companies plan to buy back shares for employee equity incentives or write-off of registered capital. Most companies that have completed share repurchase before the implementation of the above policies have chosen to cancel the repurchase of shares.
Insiders pointed out that due to various factors such as liquidity and market environment, listed companies are cautious about share repurchase. At the same time, most companies intend to use the repurchase shares for equity incentives, but the current repurchase system lacks a corresponding supporting system. Industry insiders called for relevant rules to be introduced as soon as possible.
Repurchase has rules to follow
Wanbang Tools released a few days agoannouncementIn order to fully mobilize the enthusiasm of the company's management and core employees, it is planned to repurchase the company's shares with its own funds for the company's management and core employees' equity incentives. Since the company's stock does not exist in the 60 transfer days before the resolution of the board of directors to review the share repurchase program, the upper limit of the share repurchase price is determined based on the closing price of the previous trading day and the net assets per share and earnings per share of 2018.
From the scale of repurchase, the number of shares to be repurchased by the company does not exceed 3.184 million shares, accounting for no more than 7.31% of the company's total share capital, and the amount expected to be used for repurchase does not exceed 10,188,800 yuan.
On December 28, 2018, the “Implementation Measures for the Repurchase of Stocks by the National SME Share Transfer System” (the “Repurchase Method”) was issued and implemented, ending the history that the New Third Board Company could not repurchase shares from the secondary market. Since then, there have been listed companies to disclose share repurchase plans. As of May 14, a total of 29 companies announced the proposed repurchase of shares.
From the perspective of repurchase methods, most listed companies choose to repurchase from the secondary market by bidding or market-making. There is a big difference in the size of repurchase between listed companies. The number of shares to be repurchased ranges from 20,000 to 100 million shares; the repurchase funds are derived from the company's own funds. Judging from the current disclosure plan, most listed companies plan to buy back shares for employee equity incentives, and a few companies plan to cancel registered capital.
Shen WanhongyuanThree new boardAnalystLiu Jing believes that when cash is abundant and the stock price is seriously undervalued, the listed companies have the incentive to purchase their own stocks in the secondary market. This is directly conducive to stabilizing the stock price, and indirectly helps to improve earnings per share and improve the capital structure. In addition, in the case of a downturn in the market, a number of listed companies attempted to repurchase shares for equity incentives. The Repurchase Method provides another option for listed companies to raise shares to implement equity incentives. There will be rules for the repurchase of listed companies, and the supervision of repurchase by national stock transfer companies is also law-abiding.
Some companies announced and implemented share repurchases to drive the volume of stock transactions to rise. Taking Keikang Instruments as an example, on January 22, the company announced plans to repurchase no more than 6.9 million shares at a price of no more than 3 yuan per share, and made its first repurchase on February 19. As of the close of May 14, the company's share price rose 13% from the closing price on January 22, and the volume of transactions in the last two months has also increased.
"Repurchase shares have certain effects, but due to the current bad performance of the new three boards, both market makers and investors still maintain a certain wait-and-see mood."ExecutiveSaid to the China Securities Journal reporter.
Prior to the promulgation of the "Repurchase Measures", a number of listed companies had repurchased shares in advance. The "Repurchase Measures" are clearly classified according to the principle of "new and old cuts". The repurchase has not been implemented and can be continued after the relevant procedures are completed. The shares that have been repurchased can be used for cancellation or equity incentives. However, from the actual situation, most of these companies choose to write off the repurchased shares directly.
Two companies terminated the share repurchase. Longtai Home disclosed the plan to buy back shares in August 2018. However, due to the implementation of the company’s fixed increase in January 2019, there is a conflict with the “Repurchase Measures” that “the listed company may not issue shares to raise funds during the repurchase period”. The company decided to terminate the implementation of share repurchase. On March 12, Jiabao Shi announced that it intends to carry out share repurchase by way of offer repurchase. However, in just one week, the company terminated the repurchase on the grounds that “there is an obstacle to implementation of the offer repurchase”.
More restrictive factors
The "Repurchase Measures" removes the institutional obstacles for the New Third Board Company to buy back shares from the secondary market. However, from the overall situation of the market, the listed companies are not willing to repurchase shares. The number of companies that have disclosed the repurchase plan accounts for less than 0.3% of the total market.
A person in charge of an Internet listing company in Beijing told the China Securities Journal that the company originally had a share repurchase option for the employee incentive plan, but because it did not want to consume too much cash flow, it eliminated the idea of repurchase. “Compared with the company's repurchase from the secondary market, the shareholding platform repurchased shares and then distributed to employees can also have the same effect, which does not affect the company's cash flow, and is also easier to disclose information and practical procedures. ”
Cui Yanjun, the founder of the "Boss Family" and the director of the North and South Tiandi, pointed out that many listed companies operate in 2018.PerformanceThe cash flow is not very good. Due to careful consideration, the share repurchase plan may be temporarily stranded. "If the company's cash repurchase shares are consumed, and the company's performance will decline after the business situation has not improved, it may bring greater risks to the operation."
According to the data, among the 2,929 listed companies that have disclosed the 2018 annual report, the net cash flow from operating activities of 4,284 companies decreased from the same period of the previous year, accounting for 46.1%; the net cash flow from operating activities of 3,475 listed companies was negative, accounting for More than 37.4%. In 2018, the financing amount of the New Third Board Company has shrunk significantly from 2017, which has intensified the pressure on listed companies in terms of cash flow.
At the same time, lack of market confidence, a certain degree has affected the willingness of listed companies to buy back. A person in charge of an innovation company said that the current NEEQ lacks a particularly good favorable policy, and all parties in the market lack confidence in the future. The enthusiasm of listed companies to repurchase shares from the secondary market will be affected. "The policy of lowering the threshold has not yet landed, and the incentive effect has been discounted to some extent."
The person in charge of the above-mentioned Internet listing company said that the enthusiasm for share repurchase is not high and there is a certain correlation between the possibility that the stock is not worth the money and the possibility of appreciation in the future. "If the secondary market has good liquidity and stock trading is highly active, the listed company's stocks are easy to cash out, and the repurchase of shares as equity incentives can have a certain effect."
Previously, many investments in the marketfundExpired, but due to the low liquidity, it is difficult to exit through the secondary market. The introduction of the "Repurchase Measures" is seen as increasing the path that investment funds may withdraw. However, Liu Jing believes that the actual operation is still difficult. "The "Repurchase Method" does not restrict the company from repurchasing the shares of institutional investors, but because it does not meet the conditions of targeted repurchase, it must be repurchased by other means.shareholderTreat them equally. In addition to listed companies with a small number of shareholders, it is generally difficult to achieve accurate targeting in the secondary market. ”
Looking forward to perfecting the policy
Another important reason that affects the enthusiasm of repurchase is that listed companies are still waiting for the introduction of equity incentives.
Cui Yanjun pointed out that many listed companies repurchase shares from the secondary market because of the consideration of employee equity incentives, but the corresponding equity incentives have not been introduced. Even if the listed company repurchased the shares, it still needs to wait for the next policy to be clear. "If the listed company's equity incentive plan does not conform to the policies introduced by the subsequent regulatory authorities, it will be necessary to re-adjust the revision, which is more troublesome."
According to the "Repurchase Measures", if the repurchased shares are used in the case of employee stock ownership plans, equity incentives, etc.,Shareholders' meetingThe authorization, repurchase of the share plan after more than two-thirds of the board of directors attended the resolution of the board of directors is no longer required to submit to the general meeting of shareholders for consideration. Where the repurchased shares are used in the case of employee stock ownership plans, equity incentives, etc., the subsequent processing of the repurchased shares shall be handled in accordance with the relevant provisions of the Company Law, the China Securities Regulatory Commission and the National Stock Transfer Corporation.
At present, it is more common for listed companies to conduct equity incentives to issue shares to motivated employees, or to transfer shares to the employee's shareholding platform after the company's major shareholders transfer shares. However, there are no specific provisions on the “Repurchase Measures” for how to repurchase shares and how to perform the review and information disclosure obligations.
The person in charge of the aforementioned innovation layer said that the company was preparing to buy back shares as equity incentives a few years ago. The company has initiated repurchase after the introduction of the "Repurchase Measures", but it is still used for equity incentives for the repurchased shares. Wait for further information on the policy side.
Cui Yanjun believes that considering the new three board companies in the size of the stock, the number of employees and other aspects of the A-share listed companies are quite different, it is recommended that the follow-up supervision layer based on the characteristics of the new three board market to introduce differentiated equity incentives, the pricing mechanism should be more Flexible, the review process should be relatively simplified.
Previously, the relevant person in charge of the national share transfer company said that the public company repurchased shares, which has optimized capital structure, conveyed market confidence and improvedCompany investmentValue, return to investors and other functions, but also an important way to implement equity incentives. The release of the "Repurchase Measures" is of great significance to improving the quality of listed companies, optimizing the return mechanism of investors, and establishing a sound long-term incentive mechanism. In the next step, the national share transfer company will focus on strengthening the market financing function, and further promote the measures for the financing, stratification management and stock trading of the New Third Board, and gradually follow the principle of “mature one”.
In terms of supervision, the National Stock Transfer Company recently issued the “Notice on Regulating the Repurchase of Listed Companies' Shares”, requiring the listed companies to reasonably set the repurchase price according to the “Repurchase Measures” in combination with the actual situation of the company; The repurchase scale should be reasonably determined based on factors such as repurchase purpose, financial status, operating conditions and cash flow, with a focus on companies before and after repurchase.Net profit,undistributed profit,currencyChanges in financial indicators such as capital, gearing ratio, current ratio, and quick ratio, and whether there is any suspected use of repurchase for excess profit distribution.
(Article source: China Securities Journal)