Juke Lighting is the first company in Jiangmen to successfully list on the New OTC Market, and its "sample effect" has also attracted the attention of many small and medium-sized enterprises in Jiangmen's LED industry. However, many small and medium-sized LED companies in Jiangmen, while complaining about financing difficulties, express "familiarity" with the "New OTC Market". Why did the "New OTC Market" receive a "cold reception" from LED companies?
According to the relevant person in charge of Jiangmen Economic and Information Bureau, the listing threshold of the "New Third Board" is relatively low and there are no financial conditions restrictions on the main board. In Jiangmen, there are many high-quality LED companies, such as Jihua Optoelectronics, Deshi Semiconductor, Orunde, Changli Optoelectronics, etc. The person in charge believes that Jiangmen's high-quality LED companies can follow Juke's path of development and growth on the market. "At present, in addition to introducing well-known enterprises such as Citizen, Orunde, Delixi, and Taiwan Yiquan, Jiangmen has also cultivated a number of competitive local enterprises, including 5 listed companies including Zhenmingli Group, Guangdong Deli Optoelectronics Co., Ltd., Jiangmen Keheng Industrial Co., Ltd., Guangdong Jinlaite Electric Co., Ltd., and Guangdong Juke Lighting Co., Ltd."
According to the "Implementation Opinions of the Jiangmen Municipal People's Government Office on Further Promoting the Restructuring and Listing of Urban Enterprises" issued by the Jiangmen Municipal Government Office in March 2013, Jiangmen proposed to fully mobilize the enthusiasm of enterprises for listing, and strive to have 1-2 companies listed domestically every year from 2013. By the end of the "Twelfth Five-Year Plan" period, Jiangmen City will have about 10 new domestic listed companies, realizing the "Jiangmen Sector" of the capital market.
The New Third Board is an important way for enterprises to develop and grow
Many LED company leaders believe that in the long run, listing on the New Third Board is an important way for small and medium-sized enterprises to develop and grow. Industry insiders also analyze that the LED industry is currently in a golden period of development. If this period is missed, when the LED industry becomes a traditional industry, it will be more difficult for companies to go to the capital market, and attention will not be high.
"In the Jiangmen lighting industry, especially the high-quality enterprises in the upstream of the LED industry, most of the enterprises that can be listed have already been listed before." Guo Xiu believes that the development focus of Jiangmen's LED industry in the future will be on enterprises in the downstream and application fields.
"Now some companies will take a roundabout way, first seeking to be listed on the New Third Board, and then waiting for the opportunity to be listed on the main board. At present, most companies can only take this approach." Guo Xiu believes that companies If an enterprise wants to open the door to the capital market as soon as possible, it is a more pragmatic approach to go to the New Third Board first. "Otherwise, according to the current situation, if companies really queue up for the main board now, they may not be able to wait until the year of the monkey, and they may not be able to get on the queue in ten years."
As an integrated operator in the lighting industry, Guangbohui is currently cooperating with the government to explore models to help companies go public. "On the one hand, we will select some high-quality local companies and then provide guidance to help them prepare for listing; on the other hand, for companies outside Jiangmen that meet the listing conditions, we will work hard to bring them in, introduce them to Jiangmen, let them settle here, and wait for the opportunity to seek listing on the New Third Board or directly on the main board." According to Guo Xiu, "We first get to know the overall situation of these companies from the government level. After doing research, we plan to help two or three companies in the high-tech zone to plan for listing as a pilot. After they are successfully listed, we will find a path and then promote it to other companies." It is understood that Guangbohui is currently seeking to acquire some listed shell resources overseas and then introduce them to Jiangmen.
Three major factors hampered the pace of listing of LED companies
The successful listing of Juke Lighting once became a hot topic among local LED companies. At present, Jiangmen's LED industry is in a stage of rapid development. Many LED small and medium-sized enterprises are expected to promote their development to a higher level by listing on the New OTC Market. But nearly eight months have passed, but there is still only one company in Jiangmen, Juke Lighting, that has successfully been listed. What is the reason?
1. The degree of business standardization is difficult to meet the listing standards
“If you cannot get listed on the New Third Board, you must first see whether the company itself has such desires and needs.” According to Wang Junhua, to be listed on the New Third Board, the first step is to carry out shareholding reform. However, from the perspective of standardized operations, most LED companies in Jiangmen still have many irregularities. "For example, some companies also want to get listed on the New Third Board, but once they learn about the requirements for equity structure, financial and tax stability, etc., they feel that the price to pay is too high and they may back down. Therefore, the key is to make good preparations for the company itself, so as not to waste too much time."
Many leaders of LED companies also admit that listing on the New Third Board requires companies to standardize their operations. "The Jiangmen LED industry circle is not very big, and everyone knows each other well. If the company itself does not have much advantages, it will not take this path."
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Guo Xiuze believes that some companies may have some hidden income that has not been made public before they have moved to Jiangmen. "When they arrive, When we went to Jiangmen, we still hoped not to expose ourselves too much and claimed that the company’s scale and sales were still small. But in fact, their scale had met the requirements for listing. But when we went to them, they said they didn’t want to be too public. ”
2. The return prospects of the New OTC Market are not yet clear
"The biggest expectation of many companies for listing on the New Third Board is to get money from the capital market. However, after a company actually gets listed on the New Third Board, they feel that even if it is listed on the New Third Board, it is not so easy to get money in the capital market. Their expectations and wishes are all in vain, and enthusiasm will drop." Guo Xiu did some calculations, "For example, a company must spend at least a lot of money to successfully list on the New Third Board. Their purpose of listing on the New Third Board was to raise funds, but not only did they not get the money, but they spent millions more in vain. Although there is an opportunity to be listed on the main board in the future, this opportunity is still relatively slim and long-term. "
Wang Junhua also believes that it is not that most small and medium-sized enterprises are unwilling to go public, but because the current return prospects on the New Third Board are not very clear. Therefore, in order to list on the New Third Board, companies have to pay various costs and give up so many interests and profits. "This gamble is still a bit big for companies, and they may not dare to take it."
3. There is still room for improvement in the government environment
For many LED companies, the various preliminary preparations required to list on the New Third Board are also daunting. Take the listing process of Juke Lighting as an example. One of the biggest difficulties in its listing is the processing of financial statements. According to Wang Junhua's recollection, when dealing with financial statements at that time, the accounting firm and the tax bureau had different opinions on how to deal with it. "The accounting firm handled it in accordance with the requirements of listed companies, but the tax bureau handled it from a tax perspective, so the government on one side and the accounting standards on the other left the company confused and at a loss. Even the work had to be overturned. We were also very headache at the time."
"The New OTC Market is a new thing, and the local government's supporting services must keep up in time to stimulate the enthusiasm of companies to go public." Wang Junhua believes that after a company is successfully listed, the government's follow-up services are also very important, but compared with some places, Jiangmen has no advantage in this area. "Participating in relevant industry conferences across the country, we learned that some local governments are still very supportive of enterprises, and there can even be dozens of listed companies at once. So far we are the only one in Jiangmen. As the saying goes, a single tree cannot make a forest. This shows that Jiangmen's climate still needs to be improved, and the government can play a greater role in this regard."
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