At the regular press conference of the CSRC on the 29th, a reporter asked, "The capital market has news that ifShanghai indexBelow 3,000 points, the CSRC will not promote the CDR. Is it true? ”
The CSRC responded by saying that it does not make any evaluation of market performance, but the CDR work will continue to advance in accordance with relevant documents and a series of regulations.
According to the pre-set schedule, on June 19, the CSRC will review the issuance of the CDR of Xiaomi Group at the 88th Audit Committee Meeting of the 17th Audit Committee.
However, at the time when the CDR's first single call came out, Xiaomi's official Weibo said on the 19th that the company decided to implement the listing plan in Hong Kong and China step by step through repeated and careful research. Xiaomi Group will first list in Hong Kong after the listing in Hong Kong. To this end, the company initiated an application to the China Securities Regulatory Commission and postponed the IEC meeting to review the company's CDR issuance application.
In response, the official website of the China Securities Regulatory Commission responded by respecting the choice of Xiaomi Group.
Why does the CDR's first single green light encounter the emergency door?
Looking back at Xiaomi's CDR speed, it refreshed Foxconn's rapid IPO record. It is self-evident that the regulatory layer behind it is a concern for pilot innovation companies to “hug” A-shares to quickly pave the way.
On the evening of June 6, the CSRC issued the "Administrative Measures on the Issuance and Transaction of Depositary Receipts (Trial)" and issued eight supporting documents including the IPO method and the IPO of the GEM. Good institutional arrangements.
Xiaomi applied to the CSRC for the issuance of the CDR on June 7. He was accepted on the same day and received feedback from the CSRC on the evening of June 14. At this point, Xiaomi issued CDR queues for only 12 days.
On the last working day before the Dragon Boat Festival (15th), the Shanghai and Shenzhen Stock Exchanges issued a series of business rules for listed transactions. So far, the matching system of the exchange has prepared for the pilot innovation companies to land on the A shares.
However, "in the single-handed face of the goalkeeper, only when the door is closed, Xiaomi chose to return." The key to this period may be to see the "Feedback" of Xiaomi on the evening of June 14th. A week after accepting the Xiaomi Group's application for the issuance of depositary receipts, the China Securities Regulatory Commission made the first feedback of more than 20,000 words and 84 questions for Xiaomi's CDR issuance application. Among them, Xiaomi Group's shareholding structure, preferred stocks, gambling, customer authenticity, valuation pricing, and equity differences have become the focus areas of the CSRC.
From this series of figures, it is not difficult to see that CDR as an innovative measure, the supervision still takes high standards for policy details and compliance. From the perspective of the recent A-share market environment, in order to launch a pilot project with more quality CDRs, it is also a good choice for Xiaomi to suspend the CDR review and follow-up.
CDR regression and IPO valuation are high and low controversy
It is self-evident that unicorn technology companies return to A-shares in the form of CDRs or IPOs. It is self-evident that the valuation is reasonable. The valuation issue is also directly related to the final issue pricing, which is the core of corporate concerns.
Take Xiaomi's valuation as an example. Different institutional investors feedback that the valuation ranges from 40 billion US dollars to 70 billion yuan, and the difference is nearly doubled. The reason is whether Xiaomi is an Internet company or a hardware company.
According to the Xiaomi prospectus, the company is an Internet company with mobile phones, smart hardware and IOT platforms at its core. In various roadshows, Lei Jun also constantly explained to the organization that Xiaomi has grown from a mobile hardware manufacturer to an Internet technology company.
Regardless of the development track of the capital market of A-shares or Hong Kong stocks, the valuation of hardware companies is much smaller than that of the Internet. Xiaomi has both hardware companies and Internet companies. In the first feedback to Xiaomi’s 20,000-word, the CSRC highlighted the requirement to explain whether it is accurate to locate an Internet company rather than a hardware company at this stage. Even for Internet companies, Xiaomi needs to further explain to the Securities and Futures Commission the future trend of Internet realization, the room for business growth, and the ability to sustain growth in the future.
In addition, the CSRC also raised questions about Xiaomi's industry benchmarking company, requiring Xiaomi to combine the company's overall business model and sub-business, and further supplement the similarities and differences between the disclosure and the benchmarking company in the business field.
It is worth mentioning that the CSRC also reminded the market participants of the risk on the date of Xiaomi’s decision on the date of the meeting. “Innovative enterprises have the characteristics of large investment, high risk and easy subversion. In addition, A-shares have always been speculating on new shares and speculation. In the case of the subject matter, there may be a risk of a large drop in the initial stage of the listing of the innovative enterprise after being fired." It is not difficult to see that at the same time of launching the CDR, the protection of the investor's interests has not been relaxed at all, and the risks are frequently indicated.
Judging from the historical speculation of A shares on new shares and sub-new shares, whether it is "a pig standing on the wind" or a white horse stock that focuses on the main business year after year, it has seen a big rise after the listing. However, after the pursuit, the higher the flying, the more miserable the chicken feathers? Or is it a steady rise from low to high, giving investors continued returns? Only after the dust has settled can the market see the true value of the listed company.
Xiaomi’s “suspension” and the “cancellation” of the CSRC are both for better CDR
For this CDR call, Xiaomi and the CSRC have slightly different attitudes. Xiaomi’s statement stated that he decided to implement the listing plan in Hong Kong and China step by step and left a living message for himself. The attitude of the CSRC is to respect the choice of Xiaomi Group and decide to cancel the review of the company's issuance of the application documents for the 18th session of the 17th Audit Committee in 2018 (the meeting time was originally scheduled for today).
Some analysts believe that the suspension of Xiaomi's suspension will have limited impact on the subsequent promotion of CDR by the CSRC. From the beginning of this year's two sessions to support the listing of innovative enterprises into a hot topic, CDR's policies and supporting measures will enter the fast lane. On March 30, the General Office of the State Council forwarded the Opinions of the CSRC on Piloting the Issuance of Stocks or Depositary Receipts in Innovative Enterprises, further clarifying the compliance of the CDR pilot. The cancellation of Xiaomi's review may have a slight impact on the CDR's overall release rhythm, but the CDR's position as an established reform and innovation will not change.
For Xiaomi, according to media reports, an intermediary close to Xiaomi said that Xiaomi Group considered the uncertainty of the domestic capital market environment, CDR as an innovative measure, for the more quality CDR issue, decided CDR Suspend the review, and the follow-up will be restarted. The person said that there is no timetable for when Xiaomi restarts the CDR.
From the first enterprise that eats crabs to the back door, Xiaomi’s foot return also gave the Chinese capital market more thoughts.
As the beginning of the pilot of the new economic innovation in the A-share market, every link in the distribution of Xiaomi's listing has attracted much attention.
From the perspective of the big environment, the six unicorn funds are ready to go, and the policy dividends such as the “protective disk” of the 100 billion strategic placement funds continue to strengthen Xiaomi or become the optimistic expectation of the CDR's first stock, but this does not mean that the market is right. The favor of the unicorn will be specially handled by the unicorn enterprise represented by Xiaomi. On the contrary, the high attention of the market as the CDR of the A-share innovation product will make the CSRC must be a strict model.
Hexin, a partner of Zhangze Capital, believes that it is appropriate for Xiaomi to suspend CDR. “As a representative of the new economy, Xiaomi’s valuation model and pricing uncertainty, key issues such as the determination of the CDR valuation center, pricing methods, and volatility risks during the three-year lock-up period have yet to be clarified.”
Whenever Xiaomi chooses to return to A shares again, I believe that waiting for it will be a more complete CDR. (Source: Xinhuanet)