At the regular press conference of the China Securities Regulatory Commission on the 29th, a reporter asked, “There is news in the capital market that ifShanghai indexBelow 3,000 points, the SFC will not advance the CDR. Is this true? ”
The Securities Regulatory Commission responded by saying that it does not make any evaluation of market performance, but the CDR work will still proceed in accordance with relevant documents and a series of regulations.
According to the preset schedule, on June 19, the SFC will audit the Xiaomi Group CDR's issuance declaration file at the 88th MCC Committee meeting of the 17th TSRC 2018.
However, when the first single call of the CDR was about to appear, Xiaomi's official Weibo said on the morning of the 19th that the company had repeatedly and cautiously studied and decided to implement the listing plan in Hong Kong and the territory step by step. Xiaomi Group will first go public in Hong Kong, and then take the opportunity to issue a CDR in the domestic market. To this end, the company initiated an application to the China Securities Regulatory Commission and postponed the convening of the IEC to review the company's CDR issuance application.
In response, the official website of the SFC responded by respecting the selection of the Xiaomi Group.
Why is the green light of the first single road in the CDR suddenly hit the door?
Recalling Xiaomi's CDR meeting speed, it refreshes Foxconn's rapid IPO record. The supervisory level behind it is self-evident that the pilot innovative enterprises “hugging” the A shares quickly paved the way.
On the evening of June 6, the Securities Regulatory Commission issued the "Administrative Measures on Depository and Trading Depositary Receipts (Trial)" and issued eight supporting documents, including the IPO method and the IPO method of the Growth Enterprise Market, for the issuance of CDRs for innovative companies in China. Well institutional arrangements.
Xiaomi applied to the Securities Regulatory Commission for the issuance of the CDR on June 7 and was accepted the same day. Feedback from the Securities Regulatory Commission was received on the evening of June 14. At this point, Xiaomi released the CDR for only 12 days.
On the last working day before the Dragon Boat Festival (15th), the Shanghai and Shenzhen Stock Exchange issued a series of rules governing the business of listed transactions. At this point, the supporting institutional aspects of the Exchange have made preparations for the pilot innovative companies to land on the A shares.
However, "In the face of the goalkeeper in one goal, only when the goal is met, Xiaomi chose to return." The key to this period may also need to see the "Feedback" of the Securities and Futures Commission on Xiaomi on the evening of June 14. A week after accepting Xiaomi Group’s application for public issuance of depositary receipts, the China Securities Regulatory Commission made the first feedback on Xiaomi’s CDR issuance application for more than 20,000 words and 84 questions. Among them, Xiaomi Group's shareholding structure, preference shares, gambling, customer veracity, valuation pricing, and equity differences have become the focus areas of the China Securities Regulatory Commission.
It is not difficult to see from this series of figures that CDR, as an innovative measure, supervises and takes care of policy details and compliance to take high standards. From the perspective of the recent A-share market environment, in order to have more quality CDRs for pilot distribution, it is a good choice for Xiaomi to postpone the CDR review and follow-up and start again.
CDR Regression and IPO's Valuation Controversy
Unicorn technology companies return to A shares in the form of CDRs or IPOs. It is self-evident that a reasonable valuation is difficult. The valuation issue is also directly related to the final issuance pricing, which is the core of business concerns.
Take Xiaomi’s valuation as an example. Feedback from different institutional investors has ranged from US$40 billion to 70 billion. The difference is nearly doubled. The reason is whether Xiaomi’s positioning of an Internet company or a hardware company is vague.
According to Xiaomi's prospectus, the company is an Internet company with mobile phones, smart hardware and IOT platforms as its core. Lei Jun in various road shows, is also constantly explaining to the agency that Xiaomi has grown from a mobile phone hardware manufacturer to an Internet technology company.
Regardless of the development track of the capital market of A-shares or Hong Kong stocks, the hardware company's valuation is far less than the Internet. Xiaomi has both hardware companies and Internet companies. In its first feedback on Xiaomi’s 20,000 words, the Securities and Futures Commission focused on asking whether it was accurate to determine whether the company was positioned as an Internet company at this stage rather than as a hardware company. Even if it is an Internet company, Xiaomi needs to further explain to the China Securities Regulatory Commission the future trends in the realization of the Internet, the business growth space, and the ability to continue growing in the future.
In addition, the China Securities Regulatory Commission also asked Xiaomi's industry-to-standard companies to ask Xiaomi to combine the company's overall business model and sub-services, and further supplement the disclosure and comparison of the company's business areas.
It is worth mentioning that the China Securities Regulatory Commission also reminded the market parties of the risk on the day when Xiaomi confirmed the meeting. “Innovation companies have the characteristics of large investment, high risk, and being easily subverted, and the 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 substantial fall in the initial stage of the listing of innovative companies after the speculation. It is not difficult to see that at the same time when the CDR was launched, the protection of the interests of investors by the supervisory authorities was not relaxed at all, and the risk was frequently prompted.
From the perspective of A-share speculation on new and new stocks, whether it is “a pig that has been blown to the air” or a white horse that focuses on its main business year after year, it will usher in a sharp rise after the listing. However, after the pursuit of the fly, the higher the fall, the more miserable the chicken? Or is it rising steadily from low to high, giving investors continuous return? Only after the dust has settled, the market can see the true value of listed companies.
Xiaomi's "suspend" and the "cancellation" of the Securities and Futures Commission are all for better CDR.
For this CDR stop, Xiaomi and the Securities and Futures Commission's position is slightly different. Xiaomi said that he decided to take a step-by-step plan to implement the listing plan in Hong Kong and China and left a living story for himself. The attitude of the Securities Regulatory Commission was to respect the choice of the Xiaomi Group and decided to cancel the review of the company's issuance filings by the Committee of the 17th National Development and Examining Committee (CERC) in 2008, adopting the 88th renewal review committee meeting (which was originally scheduled for today).
Some analysts believe that Xiaomi’s suspension of the issue has limited impact on the CSRC's follow-up promotion of the CDR. From the beginning of the year when the two associations supported the in-house listing of innovative companies as hot topics, the promotion of CDR's policies and supporting measures entered the fast lane. On March 30, the General Office of the State Council forwarded the “Some Opinions on Launching Pilot Projects for Issuing Domestic Shares or Depositary Receipts within the Innovative Enterprise” of the CSRC, further clarifying the compliance of the CDR pilot. The cancellation of Xiaomi's review may have a slight impact on the overall CDR distribution pace. However, CDR's position as an established reform and innovation will not change.
For Xiaomi, according to media reports, an intermediary who is close to Xiaomi said that Xiaomi Group considered the uncertainty of the domestic capital market environment, CDR as an innovative measure, decided to CDR for a more quality CDR issue. Suspend the review and the follow-up will be restarted. When Xiaomi restarted the CDR, the person said there was no timetable.
From the first company to eat crabs to the back door, Xiaomi's return of this foot gave the Chinese capital market a chance to think again.
As the beginning of the piloting of the A-share market for new economic innovations, every aspect of Xiaomi's public offering has attracted attention.
Looking at the broader environment, six unicorn funds are poised for development, and policy dividends such as the “100% of strategic allocation funds” are constantly strengthening millet or becoming optimistic about the CDR's first stock, but this does not mean that the market is The unicorn's favor will be specially dealt with by unicorn enterprises represented by Xiaomi. On the contrary, the market's high degree of attention to the CDR as an A-share innovation product warrants the SFC's strict attitude.
Hutchison Capital Partners He Xin believes that it is a proper move for Xiaomi to suspend the CDR. “As a representative of the new economy, Xiaomi’s valuation model and pricing uncertainty, the determination of the CDR valuation hub, the pricing method, and the volatility risk during the three-year lock-in period all need to be clarified.”
No matter when Xiaomi chooses to return to A shares again, I believe that waiting for it will be a more complete CDR. (Source: Xinhuanet)