Chapter 697 Great Opportunity

It is precisely because of the inherent obstacles for small and medium-sized enterprises and high-tech enterprises to go public in China that everyone hopes to go public on NASDAQ, which is also the ultimate dream of most small and medium-sized enterprises and high-tech enterprises in China. The next best option is to go public in the Hong Kong market.

However, if you want to successfully go public on NASDAQ, you also need a lot of preparation. Generally speaking, the process of the second public listing is a challenging and exciting process. Bold decisions, outstanding performance of the listing team and good market conditions will show the style and image of successful Chinese companies based in the US capital market.

First, you need to form a listing advisory team. The company's final listing in the United States is often the result of the successful operation of an effective listing advisory team. In addition to the company itself, especially the company's senior management, who need to invest a lot of time and energy, the company must form a listing advisory team including investment banks, legal advisors, and accountants. Among them, the investment bank will take the lead in leading the entire transaction and underwriting process.

When considering candidates for investment banks, the company should fully understand whether the investment bank has experience in assisting other companies in the industry to go public and its sales capabilities. The legal advisor selected by the company must have a US professional qualification. Similarly, the company should consider whether he has rich experience in securities business. The accounting firm should independently review the company's financial status according to the US GAAP. The accounting firm should also have a comprehensive understanding of China's accounting standards in order to adjust certain data to meet the reporting requirements of US accounting standards.

The second is due diligence. The company will conduct a comprehensive and in-depth due diligence on the company's management, operation, finance and legal affairs with the assistance of the listing consultant team. Due diligence will lay the foundation for the company to draft the registration statement, prospectus, roadshow promotion, etc. The company will also be required to provide various financial data in the registration statement confirmed by its independent certified public accountant.

The third is registration and approval, which is the core stage of listing. After the registration statement is submitted to the China Securities Regulatory Commission, the underwriting bank will arrange a roadshow.

Roadshow refers to a series of presentations made by securities companies to potential investors, analysts or fund managers to stimulate investment interest, usually lasting one to two weeks.

At that time, the company's management will go to various places to give speeches and showcase its business plan under the arrangement of the investment bank. The performance of the management in the roadshow also plays a vital role in the success of the securities company.

In the United States, important roadshow cities include New York, San Francisco, Boston, Chicago and Los Angeles. London and Hong Kong, as international financial centers, are often included in the roadshow itinerary.

After the roadshow, the final prospectus will be printed for investors, and the company's management will determine the final listing price and quantity with the assistance of investment banks. Investment banks often propose a recommended price based on investor needs and market conditions.

Once the listing price is reached,

two days after investors receive the formal prospectus, the second public offering can be declared effective, and the listing transaction will begin. The lead underwriter will be responsible for ensuring the smooth trading of the company's stock listing in the first few critical days.

Only at this time can the second public offering be declared a success.

"Although it is more troublesome, we can leave all these things to institutions such as Goldman Sachs, UBS or Morgan Stanley. Due to the effect of the Internet economy, they are very interested in portal websites with Chinese concepts. It is very likely that they can come up with the most suitable listing plan within a month. The whole process will not take more than three months." An American executive of the company explained to Fan Wubing.

Fan Wubing nodded in agreement, "Well, in fact, Morgan Stanley is investigating one of the portals. In order to speed up the process and put some pressure on them, I think we can introduce UBS or Goldman Sachs to package and list the other two portals."

There is no efficiency without competition. In fact, as underwriters, institutions such as UBS, Goldman Sachs and Morgan Stanley are also scrambling for food at this time. If they are slow, they may go hungry. Fan Wubing introduced a competition mechanism for them, which means that he wants them to work hard and compete to be the first to be listed on NASDAQ. After all, as the first Chinese portal to appear on the NASDAQ market, it will attract the highest level of attention and the possibility of success is higher.

"Why didn't you launch the GEM market in your country? You must know that this is crucial to the development of small and medium-sized enterprises. Under the stimulation of the new economy, any promising small and medium-sized enterprises may grow into giants like Microsoft or Yahoo, but before they grow up, how important is the financing function of the capital market to them?" A foreign executive of Fan Wubing asked Fan Wubing with some confusion.

"This is a long story." Fan Wubing just smiled bitterly.

Speaking of the reason why the domestic GEM has never been launched, Fan Wubing thinks it is just the dispute between the Shenzhen and Shanghai stock markets. As the saying goes, party disputes lead to national disasters. The infighting between the two major stock exchanges in the securities market has made China's securities industry lag behind by at least ten years.

Shenzhen's history is too short. This national sub-provincial planned city was originally an unknown small fishing village on the South China Sea, separated from Hong Kong by a river and connected by water. It currently governs the four districts of Luohu, Futian, Nanshan and Yantian in the special zone and the two administrative districts of Baoan and Longgang outside the special zone.

As the experimental field of reform and opening up in mainland China, Deng Gong once said, "The central government has no money, so you can find it yourself and fight your way out." Therefore, raising funds has become the historical mission of Shenzhen's financial industry, and the central policy The tilt and preferential treatment had an immediate effect, and Shenzhen's financial industry immediately created more than 100 "firsts" in China's financial and economic history in banking, securities, insurance and many other industries.

Under the tilt of the special zone's policies, Shenzhen has both wind and rain. When opening or attracting financial institutions, Shenzhen gave great discounts in terms of settlement, taxation, land use, etc. Now the competition between the three local governments of Shanghai, Guangzhou and Shenzhen is also particularly fierce. In order to cope with the competition from Shanghai and Guangzhou, Shenzhen has set up financial parks everywhere to attract financial institutions to its own area.

However, Shenzhen has now fallen out of favor with the central government. Although compared with other places, Shenzhen can be regarded as a small government, large enterprises, and the industry is relatively tolerant, but without favorable policies, Shenzhen will lose its attractiveness. What is even more noticeable is that Shenzhen has become very inland and its efficiency is far less than it used to be. For example, the Shenzhen Stock Exchange is very bureaucratic and has nothing but high wages.

When the Shenzhen Stock Exchange opened for business, it was eighteen days ahead of the Shanghai Stock Exchange. The "Old Five Shares" listed on the Shenzhen Stock Exchange and the "Old Eight Shares" on the Shanghai Stock Exchange became the first batch of formal listed companies in mainland China.

The preparations for the establishment of exchanges in Shenzhen and Shanghai were almost parallel. Shenzhen is adjacent to Hong Kong. The Shenzhen Stock Exchange completely learned from the practices of the Hong Kong Stock Exchange when preparing for the construction of the China World Tower, and the traces are very obvious. For example, listing and trading rules, etc., even the stock code used is the same as that of the Stock Exchange; during the same period, the Shanghai Stock Exchange went to Shenzhen to learn from the rules and copied the rules of the Shenzhen Stock Exchange, and the stock code was changed from four digits to six digits. .

Although the Shenzhen Stock Exchange was planned to be established before the Shanghai Stock Exchange, the People's Bank of China approved the establishment of the Shanghai Stock Exchange in advance, pushing the Shenzhen Stock Exchange to the second year. This shelving virtually dealt a blow to the Shenzhen Stock Exchange.

The two exchanges in Shenzhen and Shanghai competed for the title of "number one", and the battle for the opening kicked off the competition for the next ten years. Securities firms, institutions and government departments in the two places are secretly competing in terms of market trends, listing services and even transaction volume. Even the exchanges themselves do not hesitate to intervene in violation of regulations, exacerbating the volatility and market risks of the two markets.

In 1995, the trading volume of the Shanghai Stock Exchange began to significantly exceed that of the Shenzhen Stock Exchange, and it was equally popular for a while; while the Shenzhen Stock Exchange increased its efforts in technological innovation to make the trading system more complete and secure, and at the same time provided thoughtful and high-quality services to listed companies. Services have attracted new companies from all over the world to choose the Shenzhen Stock Exchange as a listing place.

By 1996, the Shenzhen Stock Exchange's trading volume began to exceed that of the Shanghai Stock Exchange. At that time, the market of the Shenzhen Stock Exchange was strong, investors were rushing around, stock commentators were eloquent, and the nouveau riche were bold and low-key. The popularity of the Shenzhen stock market was jaw-dropping. That year, the Shenzhen Stock Exchange ranked first in the global stock market rankings with an impressive increase of 174%. This was also the peak period of the Shenzhen Stock Exchange. It was enough to make the heroes of the Shanghai Stock Exchange short-tempered and resentful, which lasted until last year.

However, after 1997, the China Securities Regulatory Commission established the unwritten rule of "Shanghai will be listed first, and Shenzhen will be listed next", and companies will no longer be allowed to independently choose their listing location. The Shanghai Stock Exchange finally eased the After a while, I passed the Shenzhen Stock Exchange.

In fact, the Shenzhen Stock Exchange and the Shanghai Stock Exchange are similar and have the same rules. In this case, the central government has also considered the merger of the Shenzhen and Shanghai main board markets. However, the Shenzhen Municipal Government feels that if Shenzhen can open a GEM, the Shenzhen Stock Exchange can make a comeback. However, it seems that the launch of the GEM is still far away.

How to open a GEM? Where to open? Where to open first? These problems are plaguing everyone from the central government to the local governments. Therefore, since everyone can't reach an agreement, it would be better not to open the issue, so as not to make everyone feel uncomfortable in their hearts and keep their ears clean.

When Fan Wubing talked about these things, he couldn't help but sigh a little in his heart. However, even people like Song Yuanping listened with interest to these inside stories.

While everyone was chatting, a staff member ran in and reported loudly, "The mainland stock market suddenly exploded, the two cities were booming, and all stocks almost reached their daily limit!"

"Damn! The 5.19 market is here, I forgot about this!" Fan Wubing couldn't help but patted his forehead, thinking that he had forgotten about it.