Frost & Sullivan insights
7month4On the evening of the same day, Anqi Yeast disclosed a plan to split its subsidiary for listing, proposing to spin-off its holding subsidiary Hongyu Packaging Materials into a separate company listed on the Beijing Stock Exchange.2019year12Since the introduction of the rules for domestic listings of subsidiaries spun off by listed companies in a certain month, “Atake apartA"Continuously, nearly a hundred listed companies have released plans for spin-offs,"10Yu's company successfully listed its spun-off subsidiary, with the ChiNext becoming the main destination for spin-offs, followed by the STAR Market.Today, the Beijing Stock Exchange has also become a new option.
"Atake apartA"Why is it sought after by listed companies? What role does it play in the long-term development of the capital market? Why is the ChiNext most favored by companies?" Frost & SullivanFrost & Sullivan,Dr. Wang Xin, Global Partner and President of Greater China at Frost & Sullivan (hereinafter referred to as 'Frost & Sullivan'), was interviewed by Securities Daily to discuss the pros and cons of split listing and look ahead to the future development of the Beijing Stock Exchange.
Securities Daily
"Atake apartA"The camp will be expanded."7month4On the evening of the same day, Anqi Yeast disclosed its plan to split its subsidiary for listing, proposing to spin off its holding subsidiary Hongyu Packaging Materials into a separate company listed on the Beijing Stock Exchange.
The reporter comprehensively sorted out TonghuashuniFinDData and announcements from listed companies show that since2021year2Since the first split-share listed stock was issued at the end of the month, as of7month5dayAshares already17Only listed shares are split, among which those listed on the ChiNext and STAR Market are8only with7Only, otherwise2Only listed on the main board. Further analysis shows that this year, through “Atake apartA"Listed ones8only,7Listed only on the ChiNext1Only on the motherboard.
"Diverging into separate listings can help parent companies and subsidiaries focus on their core businesses, improve the valuation of subsidiaries, enhance financing capabilities, introduce strategic investors, and better implement management equity incentives." Wang Xin, a global partner at Frost & Sullivan and President of Greater China, analyzed for Securities Daily that listing as separate entities is an important way for capital markets to optimize resource allocation. For listed companies, it helps alleviate financial pressure by allowing the parent company to choose business segments with stronger profitability for separate listing, ensuring a smoother process for stock issuance and financing.
"The split listing allows listed companies to improve management efficiency, focus on their main business, and expand financing space through the capital market platform. Most of the businesses spun off by the parent company are technology innovation businesses in a period of rapid growth. The listing of subsidiaries spun off by the parent company can alleviate financial pressure, effectively motivate the management of subsidiaries, and enhance valuation levels," said Fu Rao, executive director of the International New Economy Research Institute, to the Securities Daily reporter.
From a sector perspective, the main destination for spin-offs this year is the ChiNext. In fact, in addition to those that have been listed this year7Outside the home, there is also20Several listed companies of Yu's Group are queuing up to list their subsidiaries on the ChiNext board.
Wang Xin stated that compared to the main board market, the listing conditions for the ChiNext are more relaxed, offering a higher degree of inclusiveness to enterprises, which helps potential small and medium-sized enterprises obtain financing opportunities.Atake apartASubsidiaries under '” generally possess high potential and strong profitability. Therefore, the ChiNext has become the choice for most companies.
It is worth noting that the Beijing Stock Exchange has now become a new option for spin-off listings, with the potential to achieve a zero-based breakthrough.
In addition to the aforementioned Angel Yeast, several listed companies such as Nanjing Iron and Steel Co., Ltd. have also designated the Beijing Stock Exchange as a subsidiary's intended split listing destination. However, to date, there has been no 'Atake apartA"Cases of listed companies on the Beijing Stock Exchange."
Zhou Yunan, founder of Beijing Nanshan Investment, analyzed to the Securities Daily reporter that the reason why the Beijing Stock Exchange has become a new choice mainly stems from the following aspects: In terms of financial thresholds, the financial requirements for listing on the Beijing Stock Exchange are lower than those for the main board, ChiNext, and STAR Market; in terms of queuing time, currently among the three exchanges in Shanghai, Shenzhen, and Beijing, there are fewer companies waiting to list on the Beijing Stock Exchange, and the average time from acceptance to listing is also shorter; moreover, listed company subsidiaries are already an important component of the New Third Board. If a subsidiary happens to be an enterprise on the Innovation Layer of the New Third Board, applying for listing on the Beijing Stock Exchange has a natural first-mover advantage.
Zhou Yunnan further stated that as the Beijing Stock Exchange continues to develop and grow, and its financing, pricing, trading, and mergers and acquisitions functions are continuously improved, more and more listed companies will turn their attention to the Beijing Stock Exchange. They are willing to spin off their subsidiaries for listing on the New Third Board or enter the innovation layer, and apply to join the Beijing Stock Exchange at an opportune time. This can not only transport more high-quality enterprises to the New Third Board but also achieve interconnectivity between listed companies on the Shanghai and Shenzhen stock exchanges with the New Third Board and the Beijing Stock Exchange.
Of course, not all listed companies are suitable for spin-off listings.
"Regulatory authorities usually have clear requirements and detailed reviews for companies' listing applications, and companies should also comprehensively assess whether they need to split up for listing based on their own circumstances," Wang Xin said. Typically, companies that choose to split up for listing have diversified businesses with high-profitable subsidiaries. Another category is incubator companies, where the equity investment portfolio of the parent company is distributed across different industries. After the subsidiaries go public, the parent company can choose to exit its equity."
*This article is reprinted from Securities Daily, with the reporter being Xing Meng, Original title: within the year8home“Atake apartA"Listed company implementation The Beijing Stock Exchange is becoming a new destination for spin-offs. ">
