Listed companies with a long way to go absorption – Information Center – Finance

Absorption is the merger or acquisition of the advanced form of derivative, it is> Absorption through the implementation of the merger, to create or emphasize the international competitiveness of the listed company, promoting the international competitiveness of China's securities market to upgrade the Chinese enterprises and speed up the internationalization of China's securities market process.

The structure of listed companies do not support the long-term "bull market"

The A-share stock market, with the very limited number of front-line blue chip or super-listed companies compared to the majority of listed companies with widespread in the industry, homogeneous, with the conformation of listed companies led blindly financing extensive scale expansion. This is not conducive to enterprises mainly of independent innovation to sustainable development, the market is not conducive to optimizing the allocation of resources and the sustainable economic development and to a certain extent, constraints and obstacles Shanghai A-share index rose more than 5,400 points. The so-called in the industry, is that a considerable number of listed companies in the same industry or in the same industry; The so-called homogeneity is that these listed companies have similar core business and key products; The so-called isomorphism, is that these companies listed> Such listed companies mainly concentrated in the steel, chemicals, cement, textiles, electronics manufacturing, food, machinery and coal industries. >> The market economy is developed securities market: a profession or industry often from several major listed companies led the industry, homogeneity, the same structure of listed companies is extremely rare. China's "great harmony" phenomenon caused by the listed companies extensive scale expansion is not> If not quickly resolved, it will simply not be able to support or support of China's stock market and long-term "bull market."

Absorption and seize a golden opportunity and

The merger can effectively absorb adjustments listed company structure, the optimization of the economic entities and innovation to help businesses effectively curb blind expansion, thereby establishing a new mode of production and operation management.

In a market economy developed stock market, absorption through the merger of the company acquisition approach to the operation, the relevant legislation is better. While China, because of years of the existence of home-equity issues, making the listed companies absorb the merger between the lack of necessary institutional environment and the internal drive. The Chinese stock market, in addition to dozens of blue-chip or super frontline blue chip listed companies, with real international competitiveness of the listed companies is too small.

Share reform marks the completion of the basic shares after the arrival of the era of reform, China has long restricted the development of the securities market home equity problem has been resolved, for the absorption of the merger created the conditions.

First, state-owned, state-owned shares into full circulation stage, mobility has been greatly enhanced, with the limited absorption share-trading issues are resolved; Secondly, the state-owned shares and legal person shares of other shareholders and holders of tradable shares is no longer the interests of the mutual antagonism, it is easier to establish mutual trust mechanism to facilitate the acquisition and merger integration. Therefore, at this stage is to absorb China's securities market with the introduction of a golden opportunity.

To absorb the merger upgrade the international competitiveness of China's stock market

The quality of listed companies,> Looking at the world, any> For example, the New York Stock Exchange, NASDAQ, the Hong Kong Stock Exchange, in accordance with recognized international standards of the securities market, also have attracted the world's best listed companies.

With these highly developed stock market, the China market in the majority of listed companies do not have international competitiveness, a considerable part of the poor performance or even a serious loss. If this situation does not improve as soon as possible, China's stock market's long-term stability and prosperity of China's economic development will not be protected by leaps and bounds.

Creating an internationally competitive listed companies: the merger through absorption, a convertible, cash and the right to choose, the right acquisition target enterprise asset reorganization and restructuring, not> After the merger through absorption continuous integration can be achieved complementary advantages, or expand the scope of business products. > Absorption through the merger of such advanced acquisition mode build and nurture internationally competitive listed companies in China in the era after the stock market to an important task. Chinese listed companies by industry background, traditional industries such as steel, chemicals, cement, textiles, electronics manufacturing, food, machinery and coal industries in some of the larger listed companies have met all to boost its international competitiveness potential. In traditional industries in the international competitiveness of the companies, not> Therefore, from the traditional industries listed companies, the merger through absorption, integration of resources and technical upgrading, produced a number of international competitiveness of the listed companies.

China's stock market improve international competitiveness: the merger through absorption, can create better quality of listed companies to attract more domestic and foreign investment, strengthen China's securities market concentration or accumulation of capital functions. Therefore, the merger is to enhance absorption international competitiveness of China's securities markets in an effective way.

A national or regional economic internationalization and globalization of enterprise performance in the main: the capital market as a core market is not has become an internationally competitive in the international market. From China's stock market status and trend of China's securities market is not the internationalization of the securities markets.

First, China's stock market is still confined to the listed companies in China mainland companies. An internationalization of the securities markets in the world all enterprises should be open, listed Object no borders, no Chau community. Second, China's stock market investors are still basically in the Mainland China's capital (funds) owners. An internationalization of the securities markets, should allow the rest of the world and attract investors to the sale of stock. For example, the NASDAQ is not> The internationalization of the Chinese economy, corporate globalization inherent law of the role of China's stock market lags behind the internationalization of the process of China's securities market is not fundamentally enhance the competitiveness of the danger. This will lead to domestic asset quality and capital overflow. Thus, the absorption through the merger, creating an internationally competitive listed companies, in turn, promote the international competitiveness of China's securities market improved.

Absorption merger aimed at selecting suitable investment opportunities in the acquisition and the main target company

The merger process of absorption depends> Generally speaking, monopoly industries, the companies will be difficult to implement the merger absorption, excessive competition and market saturation industries listed companies with the highest priority to implementing the merger of absorption, absorption can lead to the merger. Listed companies absorb the assets after the merger and reorganization and integration, will greatly improve traditional industries listed in the company's valuation level, comprehensive improvement of China's A-share market value for their investment.

Currently, excessive competition or market saturation industry is mainly concentrated in the steel, chemicals, cement, textiles, electronics manufacturing, food, machinery, coal, the majority of these industries not> Therefore, the absorption of listed companies should start with the merger of these listed companies.

Listed companies absorb the difficulty of merging, the company is the target of the local membership. These industries in most companies listed> Absorption merger of the main objectives of the company's integration, and often involve the placement of resolving problems left over by history. If there is no central government departments and local support, often unable to complete absorption after reorganization and merger integration. Therefore, the introduction of the securities regulatory departments should be coordinated corresponding documents, should take some listed companies to resolve issues left over by history.

Upgrading the investment value of listed companies

The merger of the main absorption company absorbed acquisition target company after the merger, the main goal of corporate eligible for write-off. Because of the business model, scope of business, the impact of changes in the market, as a merger of the main absorption of profitability and continued viability of some changes may occur. The consideration of these will directly affect the absorption of a listed company after the merger revaluation.

In the initial absorption merger because of the profitability of listed companies had not yet been fully reflected, so the investment value of listed companies may be undervalued, its reasonable valuation levels may decline. However, listed companies can truly deliver value growth is not the acquisition itself, but after the merger and reorganization of assets ownership restructuring integration,

After the merger with the gradual completion of the reorganization, the investment value of listed companies often will gradually surface and enhanced. Thus, the absorption can be combined investment value of listed companies in an effective way. (Yu Wen-zong, Li Ming)

(The author Yu Wen-zong for the Treasury Financial Science Institute doctoral tutor; Li Ming to the Ministry of Finance Dr. Financial Science Institute)

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