The new refinancing policy is looser on ChiNext. The restriction on the asset-liability ratio higher than 45% at last reporting period has been cancelled. As for the use of raised funds, the restrictions that previous raised funds shall be basically used up and the use of progress and effects are basically consistent with the disclosure has been cancelled. And ChiNext listed companies in private placement has lifted the two-year profit limit.
The impact of the new refinancing policy on ChiNext is the most flexible. The private placement scale of the main board accounts for about 80% of the total size of A shares, and that of the small and medium-sized boards accounts for about 15%, and that of ChiNext accounted for about 5%. In 2015, the growth rate of the private placement scale of ChiNext was the highest, which corresponds to the relaxation of the policy in 2014. This policy easing is expected to have a relatively large elasticity of the growth rate of private placement scale of ChiNext.
After the easing of this policy, the model of external performance increase is expected to repeat in A-shares. In 2013, the private placement scale of ChiNext has increased explosively. The scale has increased by 3.8 times in 2014, and in 2015, the scale has increased by 2.3 times, and it has increased by 40% in 2016. Along with this, the performance of the ChiNext has increased significantly, and profits of companies involving M&A accounted for 70% in the first quarter of 2016, and the net profit growth through M&A was 43%. This time, the easing refinancing policy is expected to repeat the story, and the private placement scale will return to growth, and the model of external performance increase is expected to repeat in A-shares.
The new policy on refinancing will be the starting point for the diffusion of technology boom.
First, in the short term, for the market, it may be different from when the draft of refinancing policy was released in November last year. At that time, the market risk appetite was extremely low. The market sentiment immediately reflected the increase in stock supply, so there was a short-term decline in A-share market. However, the current market environment is that excess liquidity has pushed up risk appetite, and short-term sentiment may reflect more positively on small and medium-sized stocks and securities firms.
Second, the core factor that determines outbound M&A is the industry cycle itself (determines the willingness of the company to acquire), and regulatory policy is a secondary factor. However, 2020 happens to be a period in which the technology industry cycle and financial regulatory policy cycle overlap with each other. After 19 years of steady recovery, outbound M&A is expected to begin to exert momentum.
Third, small and medium-sized companies in the technology sector have almost no chance from 2016. The industry cycle has been down, and financing and merger and acquisition policies have been tightened. Eventually, the prosperity has fallen for three consecutive years. Beginning in the second half of 2019, with the resonance of the global cloud service, semiconductor, and 5G industry cycles, not only head companies, but also small and medium-sized companies can enjoy the bonus, and the prosperity of the technology sector will spread with emerging M&A and financing policy.
Fourth, not all small companies can rise indiscriminately. The current liquidity environment, market size, and investor structure are significantly different from that in 2014 and 2015. Considering that the market has undergone a round of merger and acquisition feasts turning into a mess, only a part of SMEs will have a better performance.
Fifth, considering that it takes a period of preparation time from the relaxation of policies to the issuance of additional issuances, a preliminary prediction of the scale of private placement in 2020 may be about 1 to 1.2 trillion yuan. In this case, the market's stock supply will undoubtedly increase, forming a certain pumping effect. Combined with the overall measurement of capital, for 2020, the overall judgment is still a structured market or a bull market for a few companies. However, the bull market driving force of “a small number of companies” is already switching from consumer sectors to the technology industry cycle. At the same time, the technology stocks in a small number of companies will also spread the prosperity of the industry.