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Deloitte: Xiaomi withdrew from the CDR or due to a valuation mismatch

via:CnBeta     time:2018/6/19 23:31:25     readed:563

For Xiaomi temporarily withdraws from the CDR, Deloitte believes that currently A-shares are mainly retail-based, regulatory agencies need to weigh the valuation and investor protection and other factors, it is expected that CDR will be launched in the second half of this year, but the progress will be slower than expected.

At least 5 large new shares in Hong Kong in the second half of the year

Including new shares scheduled to be traded on June 21-28, 2018, Deloitte expects that as of the end of June 2018, 101 new shares in Hong Kong will raise approximately HK$50.3 billion, which represents a year-on-year increase in the number of new shares. %, but the amount of fundraising slipped by 8% year-on-year.

According to Ou Zhenxing, co-head of the Deloitte China National IPO Group, the new stock market in Hong Kong remained active during the first half of 2018. Despite the increase in the listing requirements of the main board and GEM and the shrinking of US and Sino-U.S. trade frictions, there was no Obstructed SMEs have a strong enthusiasm for listing. Whether it is the number of new shares in the first half of the year or the second quarter of 2018, new records have been brushed in. However, as the new stock market is dominated by small and medium issuers, the average scale of fund raising has further decreased.

Ou Zhenxing said that at present, Hong Kong has introduced a new listing rule for the main board. The opening of H-share listing applications to qualified new board issuers and the approval of two Hong Kong-listed companies to become H-share full-trading pilots have made the market very exciting. Extending the current issuer's scope to new economic and innovative industries and eliminating some of the listing obstacles, including other issuers that commonly accept different voting rights in international markets such as the United States, and allowing H-share issuers to fully convert their domestic shares. The listing of H-shares will increase the status of the Hong Kong market.

Deloitte's latest analysis shows that in the second half of 2018, Hong Kong will have at least five new shares each with a fund raising of at least HK$10 billion, mainly in companies related to the new economy, financial services, technology, and consumer industries. Other listed highlights include: The above new municipalities apply for listing of biotechnology companies, educational institutions, and financial service companies. However, the list of applications for listing is mainly based on SMEs. Therefore, Deloitte expects that about 180 new shares will be listed in Hong Kong in Hong Kong in 2018. The amount of funds raised reached 160 billion to 190 billion Hong Kong dollars.

Xiaomi withdrew from the CDR or due to a valuation mismatch

According to Ou Zhenxing, in the long run, the internationalization of A-shares is a general trend, but at present the A-share market is still dominated by retail investors, which accounts for nearly 90% of the market, and the listing of the new economy “Unicorn” may cause a large number of markets. Premium makes the market more fluctuating. For many new economic companies, such as millet, the uncertainty lies in its valuation level. The mainland regulators have repeatedly stressed that they hope to maintain the long-term healthy development of the market, so how to balance A shares in the hug Investor protection after the new economic company is a very important factor to consider. He believes that the mainland will definitely issue CDR in the second half of the year, but the progress may be slightly slower than expected.

Ji Wenhe, co-head of the Deloitte China National IPO Group, stated that CDR is a major reform in the capital market in the Mainland, and his attitude will be relatively cautious. As for why Xiaomi cancelled the CDR, the market generally rumors that the price-earnings ratio of Xiaomi is relatively high, and Xiaomi is the first. The CDRs have not been accurately priced in the market and are companies to be verified by the market. Under this circumstance, whether or not investors can protect investors is a factor that regulators need to consider. Therefore, for this type of company, it is considered from the perspective of the regulatory agency. Will still give priority to market acceptance and follow-up reactions, and then to the CDR.

At the same time, foreign media reported that Xiaomi delayed issuing CDR plans due to valuation issues. According to sources, the valuation will be reduced to 55 billion to 70 billion US dollars. The new valuation means that there are 22 billion US dollars in the beginning. % to 39% discount.

Ou Zhenxing said that he believes that the CDR is the general direction of market reform, and it is definitely the icing on the cake, and it will greatly benefit the long-term development of the capital market in Hong Kong and the Mainland. However, in fact, Hong Kong has embraced new-economy companies since last year. Some companies have already experienced excessive premiums. For example, when people are rushing for listing, the market’s actual acceptance of this type of company is not high, resulting in the listing of many companies. The break soon led investors to suffer losses, and regulators hope that the original intention of the healthy development of the capital market will not change, so it will be relatively cautious in issuance.

Due to the limited number of innovative companies that can meet the requirements for issuance of stocks or CDRs, and continued stringent listing review, Deloitte expects that in the second half of 2018, the mainland’s new share issuance activities will be similar to the first half of the year, with approximately 120 to 160 companies listed throughout the year. The fundraising amounted to 170 billion to 200 billion yuan. With a large number of small and medium-sized manufacturing, technology, and consumer companies applying for listing, it means that in the rest of this year, the number of new shares issued by the A-share market will be dominated by these three types of industries.

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