2010-2010年创业板一周年专题研究报告--英文版_135页_4mb

ChiNext First Anniversary Report Summary (2010)

Core Content Overview

The ChiNext (Shenzhen Growth Enterprise Market) was established as a specialized market for small and medium-sized enterprises (SMEs) with high growth potential and technological innovation. This report provides an in-depth analysis of the market's development, IPO statistics, industry distribution, and its impact on venture capital (VC) and private equity (PE) institutions.

Main Points and Key Information

1.1 Development Course and Significance of ChiNext

• Introduction to ChiNext:

  • ChiNext is a stock market for SMEs that are in growth and startup stages, offering them listing financing services and exit channels for VC/PE.
  • It differs from the main board in listing requirements and system installation, focusing on high-growth and high-tech enterprises.
  • The market is oriented towards "two highs and six news" (high growth, high technology content, and new economy, new service, new agriculture, new material, new energy, and new business model).

• Development Course:

  • Embryonic Period (1998–2000): The first policy proposal for ChiNext was made in 1998, followed by a decision in 1999 to establish a special high-tech enterprise board.
  • Suspending Period (2001–2006): The launch was postponed due to the NASDAQ dot-com bubble burst and internal policy adjustments.
  • Acceleration Period (2007–2009): The market was officially launched on October 30, 2009, with the first 28 companies listed.

• Significance:

  • Financing Support: ChiNext provides direct financing opportunities for high-growth SMEs.
  • Exit Mechanism: It offers an efficient exit channel for VC/PE institutions, particularly for high-tech and innovative enterprises.
  • Corporate Governance: The strict information disclosure and regulation help SMEs improve their corporate governance and financial systems.
  • Multi-tier Capital Market: ChiNext contributes to the establishment of a multi-tier capital market system, complementing the main board and SMEB.

1.2 Overview on Listed Companies in the First Anniversary of ChiNext

• IPO Statistics:

  • As of October 22, 2010, a total of 455 Chinese companies had listed on domestic and overseas capital markets.
  • 130 of them were listed on ChiNext, accounting for 28.6% of the total, with an average financing amount of US$107.54M.
  • 343 companies were listed on domestic markets, with an average financing amount of US$207.11M.
  • ChiNext had the lowest average financing amount among the domestic markets.

• Financing Amount Distribution:

  • The largest financing amount was RMB2.55B (Beijing Origin Water Technology Co., Ltd.).
  • The smallest was RMB197M (Hangzhou Huaxing Chuangye Communication Technology Co., Ltd.).
  • 36.2% of ChiNext-listed companies had financing between RMB100M–500M.
  • 46.1% had financing between RMB500M–1.00B.
  • 17.7% had financing exceeding RMB1.00B.

• Issue Price Statistics:

  • The average issue price was RMB32.73.
  • 77.7% of the companies had issue prices between RMB10–40.
  • The highest issue price was RMB88 (Dingli Communications Corp. Ltd.).
  • The lowest issue price was RMB11.30 (Chengdu Geeya Technology Co., Ltd.).

• P/E Ratio Statistics:

  • The average IPO P/E ratio was 64.57, with the highest being 126.67 and the lowest 36.98.
  • ChiNext had the highest average P/E ratio of 114.62, significantly higher than the 52.65 of SMEB and 22.51 of SSE.

• First-day Performance:

  • 96.2% of ChiNext-listed companies had a positive first-day performance.
  • The average first-day price increase was 53.5%, with the highest reaching 209.7%.
  • 53.9% of the companies saw price increases between 0.0%–50.0%.
  • 30.8% had price increases between 50.0%–100.0%.
  • 15.4% had price increases over 100.0%.

1.3 Overview on VC/PE-backed IPOs in the First Anniversary of ChiNext

• IPO Statistics:

  • 343 companies listed on domestic markets were VC/PE-backed, with an average financing amount of US$207.11M.
  • 130 ChiNext-listed companies were VC/PE-backed, with an average financing amount of US$107.54M.
  • 40.8% of ChiNext-listed companies had issue prices above the average.

• Geographical Distribution:

  • ChiNext had a higher concentration of companies from Guangdong, Jiangsu, Zhejiang, and Beijing.
  • The most active regions for VC/PE-backed IPOs were Guangdong and Jiangsu.

• Industry Breakdown:

  • Broadcasting & Digital TV had the highest average issue price at RMB59.90.
  • IC industry and telecom & value-added services followed with RMB57.93 and RMB48.89.
  • Food & drinks industry had the lowest average issue price at RMB11.90.
  • High-tech and innovative industries dominated the market, aligning with the "two highs and six news" criteria.

• Pre-IPO Financing:

  • VC/PE-backed companies typically raised RMB10M–RMB50M in pre-IPO financing.
  • The average return on book value for ChiNext VC/PE-backed companies was 1.46 times, indicating a positive return.

1.4 Overview on IPO Exit VC/PE Institutions via ChiNext

• Types of IPO Exit:

  • VC/PE institutions can exit via IPO, M&A, share buyback, and bankruptcy liquidation.
  • IPO is the most profitable exit option.

• Ranking of Exit Institutions:

  • The top VC/PE institutions in terms of IPO exits included Shenzhen Innovation Venture Capital, Guangdong Huijin Investment, and Beijing Zhongguancun Venture Capital.
  • The average return on book value for these institutions was 1.46 times.

• Geographical Distribution:

  • Guangdong and Beijing were the main regions for VC/PE institutions that exited via ChiNext.

1.5 Ranking of Lead Underwriters on ChiNext

• The report includes a ranking of lead underwriters based on their performance in ChiNext IPOs, though specific names are not listed.

1.6 Case Analysis

• The report provides case studies on ChiNext-listed companies, highlighting their financial performance, industry positioning, and VC/PE involvement.

1.7 Summary and Outlook

• ChiNext has been successful in providing financing opportunities and exit channels for high-growth SMEs and VC/PE institutions.
• Despite its lower listing threshold, the market still faces challenges, such as relatively high listing requirements for profitability and market liquidity concerns.
• The establishment of a multi-tier capital market system is a major achievement, but further improvements in trading systems and pricing mechanisms are needed to ensure market stability and growth.
• The future outlook suggests that ChiNext will continue to play a key role in supporting SMEs and venture capital in China's capital market.

Contact Information

• Publisher: Zero2IPO Research Center
• Founder & CEO: Gavin Ni
• Editors & Authors: Analyst Sophia Luo
• English Editors: Jarod Ji & Lisa Zhang
• Layout Designer: Una Xia
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  • E-mail: Research@zero2ipo.com.cn
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