Baofan: Enterprise is not good business board will soon be rotten

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During the two sessions this year, Fan Fuchun, vice chairman of the Securities and Futures Commission, made clear that the preparations for the gem are being actively prepared and will soon be launched after the two sessions. Gem makes private enterprises more than a listing of financing channels, but will repeat the mistakes of the Hong Kong Gem, after the launch will not be a long time? Enterprises in the gem listed after the VCS will soon exit? What is the responsibility for the investment bank as a sponsor and underwriter? Around the gem of the hot issues, This reporter interviewed Hua Xing Capital founder and CEO package.

VCs may not be able to immediately

Nan du: According to your experience, do you think that after the gem is listed, will the venture be set up immediately? Why?

Baofan: At present, the majority of domestic venture investment private enterprises, when the vote is to use the enterprise IPO to follow up with a bit of wealth. But now the opportunities are getting smaller. Because of the increasingly fierce competition in the venture capital market, the investment in the IPO has not actually brought much added value to the venture.

So as a fund, think about what specific resources you have and what kind of value you can bring to your business, so that the business you serve can be accepted. We see that there are a bunch of manufacturing private enterprises that are doing pretty well and don't need the money. But if it is a fund that can help it solve strategic problems and make it a global brand from a simple OEM, it will recognize your value. At the same time, you go in is not to talk about the price of the problem, but more treat you as a partner, you will also through investment to achieve your value, and truly create value for the enterprise.

Huaxing capital is mainly to do investment banking business, does not directly invest, so can not judge the venture in the Enterprise Board will be listed immediately after the listing. But I don't think VCs will get out of business right away. If the enterprise in the market after the development of great potential, and venture investment in the strategy can also help enterprises to develop. Then VCs will not withdraw their funds immediately.

In addition, the Government should do well in the details of the policy. For example, whether the gem solves the fund exit lock periodic problem. Can companies have enough liquidity? Is it possible to refinance? Because in the gem listed enterprises, venture capital once withdrawn, the enterprise is actually taking a lot of risk.

Enterprise Bad gem will soon be rotten

South: Nasdaq in the United States, Hong Kong Singapore's Gem and the upcoming Shenzhen gem, you encourage companies to go to the market?

Baofan: Different enterprises are suitable for different markets. This depends on the customer's own conditions and development will. Some companies are listed overseas for higher valuations than domestic listings, such as the IT industry. Language, cultural adaptation, enterprises to go overseas listing is faced with the question of how to communicate with investors. The cost of listing in different markets is also different. The cost of the US market is high and the Asian market is lower. Domestic should be the lowest cost.

In addition to the liquidity of the market as a whole, when the enterprise needs funds, the market can provide this money. The United States and Hong Kong market liquidity is better, domestic refinancing is poor, and depends on the SFC's approval speed. On the tax side, the domestic operation space is small, the foreign space is bigger.

South: How to ensure that the gem launched after the market to gain the trust and investment vision?

Baofan: Regulators need to focus on controlling the quality of listed companies and strengthening the market responsibilities of underwriting institutions. This will be possible to achieve the use of gem, expand the proportion of direct financing of enterprises original intention. The launch of the gem is a good thing, but must strictly check the quality of the enterprise, so that both buyers and sellers can make money. To push higher quality enterprises to go public, so that the gem can get the market attention. If one comes up, the quality of enterprise control on the problem, then the gem will soon be rotten. Just like Hong Kong's gem, the original intention and mechanism are all good. But in the beginning of the launch of a series of low quality enterprises, investors did not make money in this market, and soon abandoned by the market. When your market is wearing such a hat, it's not easy to roll over.

The good enterprise is decided by the market mechanism

South: How does the regulatory layer better control the quality of the enterprise?

Baofan: To ensure high quality enterprises to the gem listing, I think more still to be determined by the market mechanism, that is, to have good sponsors and underwriters. I think the brokerage business should be open not only to foreign investment banks but also to domestic private investment banks. At present, domestic brokerages are mainly state-owned enterprises, so it is familiar with the listing operation of state-owned enterprises. And foreign investment banks are also to help large state-owned enterprises listed. So it is not easy for private enterprises to find a good investment bank to assist in listing.

Private investment banks are also responsible for their brands and reputations if they are involved in the business. I think the key to the success of the emerging markets is the introduction of effective market mechanisms, which are responsible for the successful failure of the companies to go public. The good enterprise is not all the SFC can be arranged, but the market mechanism decided. Foreign investment banks can do well, and private investment banks can do well. As long as there are these mechanisms, the market can do well. The gem can attract investors ' attention.

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Huaxing Capital is China's leading investment bank focused on providing top-tier financial consultancy services to China's fast-growing entrepreneurial entrepreneurs, and is committed to providing Chinese entrepreneurs with comprehensive financial solutions to help them expand their business and create more value. Benefiting from the growing demand for financial services such as financial advisers from private Chinese companies, the company's business this year will multiply to around $2 billion trillion on the basis of less than $1 billion trillion last year. Mr Baofan a seven-year investment banking career before creating huaxing Capital, serving Morgan Stanley and Credit Suisse.