More Than 60% Of New Shares Issued This Year

In March 2021, nearly 21 years after listing on Nasdaq, Sina decided to privatize and delist. As the founder of "vie mode", Sina's delisting also announced the end of an era.

The wind started at the end of Qingping. Three months later, more changes suddenly came.

Since July, "didi travel", "truck help", "boss direct employment" and a large number of Internet related enterprises that have just landed in US stocks have been subject to network security review.

On July 6, the general office of the CPC Central Committee and the general office of the State Council issued the opinions on strictly cracking down on illegal securities activities in accordance with the law, which clearly proposed that China capital stock supervision would be strengthened. The voice of the most authoritative "two office" means that the regulatory authorities may formally carry out strict supervision on the listing of Chinese enterprises in the United States in the short term. As of the time of press release, there have been a number of Chinese companies planning to go to the United States for IPO suspension or cancellation of listing in the United States.

Policy and market uncertainty both increased

Under a series of policies and statements, the supervision of Internet companies going abroad for listing has been further clarified.

On July 10, the office of cybersecurity and information technology issued the measures for network security review (Draft for comments on the revised draft) (hereinafter referred to as the draft for comments). It is proposed that operators who master more than one million users' personal information must apply for network security review to the office of network security review for listing abroad. It is worth noting that the number of active users of the four enterprises that have been implemented network security inspection recently exceeds 1 million.

In addition, the contents of the draft closely focus on the scenario of "data security abroad", expand the functional organ of network security review, include the CSRC, and require operators to submit "IPO materials to be submitted" when applying for network security review.

In the view of industry insiders, the draft for comments fills in the short board of previous network security review only focusing on the procurement of critical information infrastructure, and the scope of review has expanded from key information infrastructure operators to all data processors, which deserves high attention of data operators. This will have a significant impact on overseas listed companies.

"Generally, Internet companies with a certain scale go to the U.S. for IPO, the threshold of 1 million users for such enterprises is basically met, which means that the IPO of Internet enterprises in the United States will be subject to security review, so it has a certain impact on the listing of Chinese Internet enterprises in the United States." Pan Helin, executive director of the Digital Economy Research Institute of Central South University of economics and law, told reporters of the 21st century economic report.

In addition to regulatory overweight, judging from the performance of China capital stock market going to the United States this year, listing in the United States has not obvious advantages in terms of valuation, and has increasingly become a channel for early shareholders to withdraw when due. Wind data shows that as of July 19, 38 Chinese companies have listed on U.S. stocks this year, 20 of which have issued depository receipts and 18 have issued common shares.

Of the 38 stocks mentioned above, as of July 19, 24 shares had been broken, with a breaking rate of 63%. Ronglian Yitong, an intelligent communication cloud service provider, went public on February 9 with an offering price of $16 per share. However, the company's share price is only $5 per share, down 64.75% from the issue price.

In addition, there are cross-border e-commerce onion and crowdfunding platform shuidi company, which are also down 50% from the issue price. The latest prices of the two companies are US $3.07/share and US $5.86/share, while the offering prices are US $7.25/share and US $12/share respectively.

In fact, although the amount of financing and the amount of money raised by Chinese enterprises going to the United States since this year have doubled compared with the same period last year, the market of China capital stock is still uncertain. First, the stock disaster of China capital stock at the beginning of the year, which greatly hit the enthusiasm of IPO. Then, although it ushered in a strong rise for more than two months, it fell again after entering July.

A number of Chinese companies stopped listing in the US

The 21st century economic reporter noted that in the context of increasing uncertainty in the market and regulatory environment, a number of Chinese enterprises have recently terminated the IPO process in the United States. Keep, Himalaya, and zero krypton, a medical technology company, have terminated their listing in the United States.

For example, Wang Ning, the founder and CEO of keep, a sports social networking platform that launched US stock IPO as early as April this year, has also told the media that they expect keep to be listed as early as 2021 and 2022 at the latest. However, this plan is now subject to changes. According to the official website of keep, as early as 2019, the number of subscription members of the company has reached 1 million.

With the announcement of suspension or termination of listing in the United States, the "exit" process of shareholders will be further delayed.

According to the data of qixinbao, keep was officially launched in February 2015. In the past six years, keep has conducted 8 rounds of financing and obtained more than 600 million US dollars. Among them, on August 16, 2016, keep obtained the C + round strategic investment from Tencent. Not long ago, in the latest round of financing led by Softbank vision fund, keep obtained a total financing amount of 360 million US dollars from Softbank group, Hillhead capital, Tencent investment, coatue, Bertelsmann Asia Investment Fund, time capital, Jiyuan capital and Wuyuan capital.

Himalaya, which was founded in August 2012, has received six rounds of financing since its establishment. The main investors include Xiaomi technology, Puhua capital, GAODA investment, Huashan capital, broadband capital CBC, Hanxin Jinghong, Chuangshi partner, tal, etc.

As of the first quarter of 2021, there are 250 million active users in the whole scene of Himalaya, including 104 million mobile mobile users and 146 million active users of IOT and other third-party open platforms.

At the same time, zero krypton technology, which was canceled IPO plan at the same time, was established in 2014. It is a data-driven medical technology company, providing big data and AI solutions in the fields of cancer, rare diseases and other major diseases. The company originally planned to be listed on NASDAQ on July 9 with the stock code of "LDOC". It planned to issue 10.8 million ads shares, each ads equivalent to 4 ordinary shares, and the issuing price range was set at $17.5 to $19.5.

According to public information, linkcare, a subsidiary of zero krypton technology, has cared for more than 3.5 million patients since 2015, and more than 330 cooperative hospitals, including 191 top-3 hospitals; As of March 31, 2021, zero krypton technology has 34 patient care centers in 28 provinces across the country. During the same period, linksolutions has provided support to more than 310 key researchers, covering 57% of the total number of new tumor indications applied for clinical trials in China from 2017 to March 31, 2021.

Going to Hong Kong stock market or plan B

According to UBS data, as of the second quarter of 2021, the amount of overseas IPOs of Chinese enterprises rose from $14.6 billion to more than $40 billion, of which the U.S. listed portion reached $12.2 billion and the amount of Hong Kong listed reached $28.4 billion.

In the current environment, listing in Hong Kong may be a plan B for these enterprises.

"Recently, too many companies have come to consult for listing in Hong Kong. Some of them are consulting companies going to Hong Kong for IPO, and some Chinese capital stock companies that have been listed in the United States have consulted on going to Hong Kong for secondary listing." A lawyer mainly engaged in IPO business of Chinese enterprises in Hong Kong told reporters.

Up to now, five China capital stocks have returned to Hong Kong for secondary listing this year.

Guotai Junan Securities believes that with the stricter information security supervision, it is more difficult for "small red chip" enterprises to go to sea. Under the background of the policy changes of overseas listing, Hong Kong stocks, as a market with more flexible listing conditions and higher operation efficiency, is expected to usher in the centralized return of China capital stocks.

However, compared with listing in the United States, there is still a higher threshold for listing in Hong Kong. Hong Kong shares are still inferior to US stocks in terms of market liquidity and difficulty in shareholders' exit. Therefore, some market participants have different views, and believe that the recent policy changes are mainly aimed at Internet enterprises, and have little impact on other enterprises going to the United States for listing.

According to the draft for comments, the new data processing activities of the key assessment objects in this review, as well as the national security risks that may be brought about by foreign listing, such as the risks of core data, important data or a large number of personal information being stolen, leaked, damaged, illegally used or exported; Key information infrastructure, core data, important data or a large number of personal information are affected, controlled and maliciously used by foreign governments after listing abroad.

"Internet companies have a great impact and need to wait for the review to be completed. General new retail or consumer companies are OK; Non internet technology companies are also less likely to be affected. Of course, some specific enterprises could not go to the United States for listing. " Wang Jiyue, a well-known investment banker, pointed out to reporters of the 21st century economic report.

According to the reporter's statistics, among the Chinese enterprises listed in the US stock market since 2019, there are about 25 Internet enterprises engaged in the service category, accounting for about 23.58%.

"Science and technology enterprises are divided into hard technology and soft technology. Hard technology has no impact, and relevant innovation in manufacturing industry will develop normally, including medicine, automobile manufacturing and electronic manufacturing, which are strong industries in China. However, the development of soft technology, mainly Internet enterprises, will be affected by some factors, including enterprises involved in network security, information security, data security and national security, which may be affected by the narrowing of financing channels. However, this is also a lesson that must be made up. When Internet enterprises adapt to the external environment, the demand from users will continue to promote the development of enterprises. " Pan and Lin said.

However, pan and Lin further said that the impact may be temporary.

"At this stage, data security review is absolutely necessary. Both from the perspective of national security and the level of user privacy, follow-up supervision is needed. However, what needs to be emphasized here is that this is only a review, including the review of the system and mechanism of data security of Internet enterprises. However, it does not mean that these enterprises are not allowed to list in the United States, but are more cautious in the data dimension, Therefore, although several domestic technology enterprises have recently withdrawn their IPO in the United States, in fact, if they pass the review, they will still be listed in the United States normally in the future. The capital operation process of science and technology enterprises is only a short-term delay and will not have a long-term impact. " Pan and Lin said.