In January 6, 2020, zhe pharmaceuticals issued the letter of intent to publish the prospectus, marking the most critical pricing link before entering the market.
The listing process of Zawa biology has attracted much attention from the market. As the first enterprise to adopt fifth sets of standards to apply for listing, the registration of Zai bio has a benchmark significance, which means that A shares will usher in the first unprofitable listed company.
If the traditional IPO standard is limited by profit indicators, Zhe is not A. In order to adapt to the characteristics of the diversity of the science and technology enterprises, the company set up a set of listing standards with "market value" as the core, and "no heroes based on profit", which met the needs of issuing and listing different types of science and technology enterprises, and solved the problem of measuring all enterprises with one mold.
Prior to the registration of the first company with the same rights and different rights, it was approved by the first loss making enterprise.
How to make a price for a loss making enterprise?
In December 31, 2019, 57 days after the submission of registration, the SFC agreed to apply for the registration of Zai bio initial public offering. In January 6, 2020, zhe pharmaceutical issued a letter of intent to issue the prospectus on the stock market, with the expected time of issuance in January 14, 2020.
According to the prospectus, zhe bio is an innovation driven chemical and biological R & D enterprise focusing on many fields of treatment, such as cancer, hemorrhage and blood diseases, liver and gallbladder diseases. All products of the company are in the research and development stage, and have not yet been commercialized production and sales. The company's products have not yet achieved sales revenue, and the company has not yet been profitable and there is a cumulative deficit.
In the 2016-2018 years and 1-6 months of 2019, the net profit of Zawa biological parent company was -1.3 billion yuan, -1.5 billion yuan, -4.4 billion yuan and -3.4 billion yuan respectively. Moreover, in the next period of time, the company expects a cumulative deficit and will continue to lose money.
The products pipeline of Zawa biological products has 11 main research projects, 29 of which are in the phase II/III clinical trials, 2 in I clinical trials, 1 in IND stage, and 4 in pre clinical research and development stage. One of the fastest progress of product development is that it is expected to complete the phase III clinical trial of the treatment of advanced hepatocellular carcinoma by the first line of treatment in the end of 2019 or early 2020, and submit it to NDA in the first quarter of 2020.
From the audit point of view, the Shanghai Stock Exchange paid attention to the loss of zeta biology, but it did not become an obstacle to issuing after full faith. In turn, we should go to the bottom of the core technology, the essence of business and the conflict of interests in equity trading. In the three rounds of inquiries, the one or two round only asked about the impact of losses on the company's continuing operation.
Before A, Hongkong shares did not have a market access for unprofitable companies. In 2018, when the stock market allowed unprofitable biopharmaceutical companies to go public, the listing of related companies was launched. The fifth set of listing standards of the science and technology board is considered to be tailor-made for unprofitable Biopharmaceutical Enterprises.
At present, the most important concern for zhe is the pricing problem. How to make a price for a loss making enterprise? This is a problem that A shares have not encountered before.
"This will be a test for the whole market. For zhe, the price earnings ratio has been used by investors who are accustomed to the simplified valuation. Therefore, we need to use more complicated pricing models, while ordinary investors do not have the ability to decide prices by professional investors. For example, the DCF model can be used, and more importantly, the growth of future income and cash flow. " Wang Jiyue, a senior investment bank, told reporters on twenty-first Century economic report.
"At the same time, investment zhe also means higher risks, because ordinary investors may not be able to judge whether they are overvalued or worth buying. It is also very risky for professional investors, because the company is not earning yet, and the risk of future cash flow prediction is larger than that of ordinary companies. If the difference between future expectations and expectations is large, the stock price will fluctuate greatly." Wang Jiyue said.
But there is no doubt that Zai biological registration has become a benchmark for the industry. It is a landmark event in China's capital market. "For loss making enterprises, risk warning and information disclosure should be made, and the rest will be left to the market." A senior investment bank official said.
Tolerance continues to rise
If strictly classified, the listing conditions of Ke Chuang board include 5 sets of standards, such as "market value", and 4 sets and 2 sets of listing standards for red chip enterprises and special equity structure enterprises. There are 11 sets of standards for enterprises to choose independently. Among them, there are 10 sets of listing standards without profit requirements, and 1 sets of listing standards have no financial requirements.
After the relaxation of profit limit, the attraction of science and technology enterprises is obvious. At present, 30 enterprises in the reporting industry have chosen the non-profit listing standard. In addition to zhe bio, there are 6 losses or sales revenue of 6 companies such as biotech (submitted to registration), Tian Zhi hang, frontier biology, Shenzhou cell and Jun Shi biology, and there are 2 outstanding losses in the listed companies, namely, Zhongshan stone network and micro core organisms.
In terms of red chips and special voting rights, Huarun microelectronics has declared the first red chip enterprise in the enterprise for the issuance of shares, and has successfully registered it in October 25, 2019. It has been submitted for registration. Nine intelligence is the first red chip enterprise to apply for the issuance of CDR and set up a special voting right. It is also the first enterprise to set up a special voting right, and it will be effective in December 24, 2019.
With the number of shareholders exceeding 200 and the listing of options, the science and technology innovation board allows ESOP to follow the "closed loop principle" or not to penetrate the calculation in accordance with the provisions of the record, allowing the formulation of the option incentive plan and the implementation after the listing. There are more than 200 participants in the company's shareholding scheme, and the "closed loop principle" is applied by 1 shareholders.
The silicon industry is the first company that has stock options to encourage listings. In terms of competition, related transactions, and declining performance after the reporting period, the issuer is required to carry out sufficient information disclosure and risk disclosure without affecting the ability of independent continuous operation.
Haier biological, Weisheng information, stone technology and other industry competition or related transactions, the first half of 2019, the net profit in the first half of the year fell 84.31% compared with the same period in 2018, after the full disclosure of information and risk warning no longer become a real obstacle to issuing the listing.
"Inclusiveness" is one of the biggest characteristics of the registration system of the science and technology innovation board. The diversified listing conditions meet the needs of different types of science and technology enterprises in issuing and listing, and are conducive to supporting the financing of small and medium enterprises and new science and technology enterprises. It should be noted that while relaxing the threshold requirement for listing financial indicators, some companies with low technology content may also "fish in troubled waters". Therefore, the quality of listed companies must be improved, which is also the relationship between regulation and reduction of threshold and good entry. A senior market person told reporters.