How many companies in poverty-stricken counties can obtain "green cards" for IPOs without queuing up

The poverty alleviation campaign has brought significant benefits to the capital market. The China Securities Regulatory Commission (CSRC) is making another significant move, and IPOs of enterprises in poverty-stricken counties across the country will be subject to the policy of "reporting and reviewing immediately, and issuing immediately after review.". A reporter from Securities Times E Company conducted a thorough investigation of 743 IPO queuing companies nationwide, compared the list of 592 poverty-stricken counties nationwide, and compiled a list of IPO companies in poverty-stricken counties. If we add the enterprises that handle the registration of tutoring, there are currently as many as 1598 queuing enterprises nationwide.

Statistics have found that there are currently 6 companies, including those that have been pre disclosed and are undergoing counseling, including 1 in Shanxi, 1 in Henan, 2 in Anhui, 1 in Inner Mongolia, and 1 in Hubei. Based on 592 poverty-stricken counties nationwide, only one listed company is allocated to every 100 counties.

Secretary Dong and investment bank personnel told Securities Times reporters, "We have been queuing up for so long, and it is estimated that even the companies in the meeting are afraid to move now. The cost of withdrawing materials and reapplying is too high. However, some companies that are preparing to go public may consider relocating. Starting from this year, we will prepare to relocate our registered address to poverty-stricken areas, pay the 2016 tax, and by next year, we may face" immigration "in 2018." The wave of companies going public in poverty-stricken areas.

On the other hand, the above policies may stimulate more capital to invest in enterprises in poverty-stricken areas, and there will be "native" enterprises in poverty-stricken areas rushing to go public. After meeting the requirement of paying income tax no less than 20 million yuan, more enterprises in poverty-stricken areas may enter the capital market in 2017.

There are precedents in supporting enterprises in poverty-stricken areas

On September 9th, the China Securities Regulatory Commission publicly released the "Opinions of the China Securities Regulatory Commission on Leveraging the Role of Capital Markets to Serve the National Poverty Alleviation Strategy", which stated that green channels will be opened up for IPOs of enterprises in poverty-stricken areas and listing on the New Third Board.

The Opinion specifically points out that the China Securities Regulatory Commission applies to enterprises registered in poverty-stricken areas and whose main place of production and operation has been engaged in production and operation for at least three years, and who have paid income tax for at least three years, or enterprises registered in poverty-stricken areas and who have paid income tax of no less than 20 million yuan in the past year in poverty-stricken areas and promised not to change their place of registration within three years after going public, when applying for an IPO, the policy of "immediate approval, immediate issuance" shall be applied.

At the same time, the China Securities Association also announced on September 9th the first batch of list of securities companies in the "One Company, One County" paired assistance campaign to impoverished counties. 11 securities firms including Guoxin Securities and Shenwan Hongyuan have paired up to assist 13 impoverished counties.

Securities Times reporters found that although there are many poverty-stricken counties registered in the northwest five provinces, Yunnan, Guangxi, Guizhou and other southwestern regions in the traditional sense of poverty, according to the list of declared enterprises, no proposed listed company has appeared among them. This also indicates that it is not easy for impoverished counties to incubate a listed company.

However, a senior insurance representative stated that although there are not many listed companies in poverty-stricken counties, policies still have guiding significance and may stimulate these areas to accelerate support for powerful enterprises and achieve zero breakthroughs as soon as possible. "Currently, there is only one Chuanjinnuo registered in poverty-stricken counties in Yunnan Province, which was listed in 2015," said the aforementioned insurance representative.

In fact, regulatory authorities have been biased towards listing and financing for enterprises in the central and western regions. In March last year, the CSRC said that it would establish and improve a long-term mechanism to support the development of Xizang's capital market, including continuing to implement the preferential review policy for the initial listing of Xizang enterprises and the policy of "reporting and reviewing immediately" for Xizang enterprises to list on the New Third Board. At the same time, the CSRC will support the development and growth of Xizang enterprises through the multi-level equity market. It is necessary to study and formulate guidelines for the development of regional equity markets, support the Sichuan Tibet Equity Trading Center to accelerate its development, and improve the capacity of small and micro enterprises in the service area. We will continue to support the mergers and acquisitions of enterprises in Xizang to achieve transformation and upgrading.

Some securities firms believe that the China Securities Regulatory Commission has always been biased towards IPOs in the central and western regions. This poverty list is in line with the overall policy direction, and the number of eligible listed companies will not be too many; In the future, there is a risk of a decline in the value of shell resources. One of the important values of shell resources is that the intended listing entity can bypass the IPO queue through shell resources, while high-quality enterprises can theoretically bypass the queue for IPO by changing their registration location.

Hu Wensheng, the sponsor of Xiangcai Securities, stated that the China Securities Regulatory Commission has opened up a green channel for IPOs to help 592 poverty-stricken counties lift themselves out of poverty. The previous support policies for the central and western regions have been institutionalized, making the policies more clear and helpful for local enterprises to go public. He also believes that due to the limited resources of high-quality enterprises in poverty-stricken counties, they will not disrupt the current IPO order or become the mainstream business of investment banks.

However, Hu Wensheng estimates that there may not be many companies listed in poverty-stricken counties. Currently, there are not many listed companies in poverty-stricken counties, and the China Securities Regulatory Commission must have conducted statistics to ensure that it will not affect the current IPO system. It won't have much impact for at least four or five years. Hu Wensheng predicts that there may also be cases where some companies move their registered locations to impoverished areas in order to quickly go public. However, the China Securities Regulatory Commission also has other conditions. In addition to having a certain number of years in the registered location, the China Securities Regulatory Commission also stipulates the amount and time of tax payment in the registered location, which requires the enterprise entity to also relocate. The China Securities Regulatory Commission also stipulates that companies in poverty-stricken counties cannot relocate their registered address within three years after their IPO. If a company moves to a poverty-stricken county for the purpose of IPO, it must stay in the local area for at least 6 years and can also help alleviate poverty in the local area. These regulations will deter companies eager to go public. Of course, there may still be some speculators in the future who can buy a shell company locally, install their assets in the current shell company, and pay more taxes in the past year to meet the conditions.

Hu Wensheng believes that as this policy has just been introduced, the impact on the investment banking business of securities firms is not yet obvious. There should be securities firms actively seeking listing resources in poverty-stricken counties, but this business will not become mainstream because the resources suitable for listing in poverty-stricken counties are very limited.

Six poverty-stricken counties plan to list their own companies with unique characteristics

Securities Times reporters have found that the six poverty-stricken counties have their own unique characteristics when planning to list their companies.

Laide Ma Industry: located in Inner Mongolia, is currently undergoing IPO counseling and filing. Its registered address is Haridao Bugacha, Ba Town, Horqin Right Middle Banner, Xing'an League, poverty-stricken county, Inner Mongolia Autonomous Region. The counseling institution is CITIC Securities [0.00%].

Inner Mongolia Laide Horse Industry Co., Ltd. was established in 2006. As of now, Laide Horse Industry has a total of 485 employees, with a turnover of 120 million yuan and a profit of 35 million yuan in 2014. Hong Kong Shiming Investment Group, Shenzhen Chuangdong Investment Company, Beijing Datai Capital and others have successively invested 190 million yuan in Laide Horse Industry, making it the first horse industry company in the domestic market to obtain large-scale venture capital. It plans to go public in 2016. As the only horse industry company in China to introduce venture capital, Laide Horse Industry aims to become the first local listed company in Xing'an League, the first cultural industry listed company in Inner Mongolia Autonomous Region, and the first listed company in China's horse industry.

It is worth noting that Inner Mongolia Grassland Ecological Industry Co., Ltd., in which Mengcao Ecology (300355) shares, has a stake in Laide Horse Industry with a shareholding ratio of less than 5%.

Hongyuan Pharmaceutical: located in Hubei, it is an IPO counseling and filing enterprise, registered at Yishui North Road, Fengshan Town, Luotian County, Huanggang City, Hubei Province. The counseling institution is Changjiang Securities [0.09% funding research report]. As the IPO coaching institution of Hongyuan Pharmaceutical, Zhu Ming, the project leader of Changjiang Securities Underwriting and Sponsorship Co., Ltd., stated that the Hongyuan Pharmaceutical project will soon apply for coaching and acceptance by the Hubei Securities Regulatory Bureau. After the acceptance is completed, the IPO application materials will be submitted to the Securities Regulatory Commission, which is in line with the pace of this policy. Zhu Ming stated that due to factors such as the level of economic development, there are currently not many IPO resources in poverty-stricken counties. He believes that after the new poverty alleviation policy is implemented, some enterprises in poverty-stricken counties may accelerate their listing pace, and counseling institutions will also benefit from it. "We will communicate with regulatory authorities as soon as possible to clarify details such as how to determine whether enterprises meet the requirements of poverty alleviation policies."

Jiyou new material: located in the Taihu Lake County, a poverty-stricken county in Anhui Province, has been pre disclosed for IPO. The company is mainly engaged in the research and development, production, and sales of cigarette packaging paper, cigarette sealing paper, and electrolytic aluminum. At present, stable cooperative relationships have been established with several provincial-level Chinese tobacco companies, including Yunnan China Tobacco, Anhui China Tobacco, Shaanxi China Tobacco, Sichuan Chongqing China Tobacco, Hebei China Tobacco, Fujian China Tobacco, Jiangxi China Tobacco, Gansu Tobacco, as well as Taiwan Miaoli Cigarette, and we have become a qualified supplier of cigarette packaging paper. Jiyou New Materials plans to issue stocks to raise 346.45 million yuan for the construction of cigarette packaging paper production lines, electrochemical aluminum production lines, and research and development centers. Its shareholder structure consists of 9 natural persons and there is no listed company.

Huaye Spices: Located in Qianshan County, a poverty-stricken county in Anhui Province, it has been pre disclosed for IPO. The company's main business is the research and development, production, and sales of lactone series synthetic fragrances. The company's main products are synthetic fragrances of the propyl lactone series and the butyl lactone series, which are widely used in industries and fields such as food and beverage, daily chemical, tobacco, and feed. The investment project raised this time is the "Annual Production of 3000 tons of Propyl Lactone Series Synthetic Spices Construction Project". The equity institutions consist of over 30 natural persons and two institutions, with no shares held by listed companies. Among them, Guoyuan Venture Capital, which holds 6.98% of the shares, is a subsidiary of Guoyuan Group.

Huhua Group: Located in the north of Huguan County, Changzhi City, it has been pre disclosed for IPO. The company mainly engages in the manufacturing of chemical raw materials and chemical products, with the sponsoring institution being Sino German Securities. On October 31, 2013, Huhua Group signed a coaching agreement with Sino German Securities. The company plans to go public on the Shanghai Stock Exchange and is expected to issue no more than 50 million shares. The total share capital after issuance shall not exceed 200 million shares.

Senba Optoelectronics: Located in Chengguan Town, Sheqi County, Nanyang City, it has been pre disclosed for IPO. The company's main business is computer, communication, and other electronic equipment manufacturing, with Changjiang Securities as the sponsoring institution. Changjiang Insurance and Senba Group signed a coaching agreement on February 10, 2015. The company plans to go public on the Shenzhen Stock Exchange and is expected to issue no more than 20 million shares. The total share capital after issuance shall not exceed 80 million shares