Caution Should Be Taken In Lowering The Threshold Of Gem IPO Company.

< p > do not rule out the current threshold setting will make the A share market miss Tencent, < a href= "//www.sjfzxm.com" > Alibaba < /a > such high growing company, but if we lower the threshold of listing, especially allow non profitable companies to issue shares, then the A share market will usher in a large number of junk companies.

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Before P, the SFC is now seeking advice from the public on the measures for IPO and listing on GEM.

From the content of the draft, it is undoubtedly the focus of market attention to reduce the issuing conditions of < a href= "//www.sjfzxm.com/news/index_c.asp" > gem < /a >.

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< p > according to the "Eleventh draft opinions" on the "conditions for the issuer to apply for initial public offerings," the original stipulation "the continuous profit in the recent two years, the net profit of the recent two years has accumulated not less than ten million yuan, and has continued to grow; or the net profit is not less than five million yuan in the most recent year, and the net income is not less than fifty million yuan in the latest year. The operating income growth rate in the recent two years is not less than thirty percent". The terms of issuance have been revised to "continuous profit in the recent two years. The net profit in the recent two years has accumulated not less than ten million yuan; or the profit has been made in the latest year, and the operating income in the recent year is not less than fifty million yuan".

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< p > this means that as long as the company has made a profit in the last year, even if it has only earned 1 yuan in profit in the latest year, it will be able to issue new shares publicly and publish on the growth enterprise market if its business income reaches fifty million yuan. "IPO"

We can see that the threshold of gem IPO has been significantly reduced, and Xiao Gang, chairman of the SFC, has stressed that it is necessary to allow Internet and technology innovation enterprises that are not yet profitable but meet certain conditions to issue their shares on the gem.

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< p > reduce the listing threshold of gem IPO company, and its intention is known to all.

But on this issue, regulators are careful.

At least at this stage, it is not appropriate to reduce the conditions for issuing new shares on GEM.

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< p > < < a href= > //www.sjfzxm.com/news/index_c.asp > > stock market > /a > two functions, financing function and investment function, at present, the lack of financing function in China's stock market is rather an investment function.

Reduce the IPO threshold of gem, support more enterprises to issue shares, and achieve the purpose of direct financing.

This further reflects the financing function of the stock market.

But the investment function of the stock market has been obviously abandoned.

Therefore, if the SFC makes such an arrangement, it can only indicate that the Chinese stock market is more concerned with the financing function, and the financing is higher than anything else, thus sacrificing the investment function of the stock market.

This is the next time that China's stock market is still struggling near the 2000 point, which is undoubtedly another injury to investor sentiment, which makes investors lose confidence in China's stock market.

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< p > not only that, but making such arrangements is also contrary to the actual situation of the issuance of new shares.

Under the current threshold of IPO, stock market is not short of listing resources.

Up to now, there are up to 685 companies queuing up at the gate of IPO, of which only 232 have been listed on GEM.

It can be said that arranging the listing of these companies will take about 2 years.

Because of this, at the news conference held by the SFC in March 28th, press spokesman Zhang Xiaojun said that it was difficult to complete the audit process of queuing enterprises for a long time, and encouraged enterprises to choose to sign up on the new three boards or choose overseas listing to achieve financing development.

It is based on this fact that it is unthinkable to reduce the IPO threshold of GEM companies at this stage. It will only further increase the queue length of IPO companies.

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< p > and lowering the listing threshold of IPO company will further reduce the quality of listed companies.

Of course, it does not rule out that the current threshold setting will allow the A share market to miss the high growing company such as Tencent and Alibaba, but this threshold setting will block more garbage companies and mediocre companies from the A share market.

If we lower the threshold of listing, especially allow non profitable companies to issue shares, then the A share market will usher in a large number of junk companies.

This is obviously contrary to the six proposed "promoting the efficiency of listed companies and enhancing the ability of continuous returns to investors".

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< p > in order to reduce the listing threshold of gem IPO company, a href= "//www.sjfzxm.com" > SFC "/a" must be cautious, and no action is better than action.

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