Recently, Bian Xiao has been talking with several good friends about investing in American stocks. Many people want to know why some China companies, especially Internet companies, want to go public in Hongkong or the United States, not far from Wan Li, even if they are doing well in China.

Some people say that this is unpatriotic, and some people say that this is because it is more difficult to list A shares?

Patriotism is a basic slogan in business, not to mention it. In fact, domestic enterprises seeking overseas listing have both practical interests and helplessness.

Why do you say that? We might as well know the criteria for listing A shares first. Due to the limited space, Bian Xiao chose more important financial requirements and put some key points on them.

Financial requirements for A-share listing

1. The net profit in the current three fiscal years is positive, with a cumulative amount of over 30 million yuan. Net profit is calculated at the lower before and after deducting non-recurring gains and losses.

2. The net cash flow generated by operating activities in the current three fiscal years has accumulated more than RMB 50 million; Or the accumulated operating income in the current three fiscal years exceeds 300 million yuan.

3. The total share capital before issuance shall not be less than RMB 30 million.

4 intangible assets at the end of the period (excluding land use rights, breeding rights, mining rights, etc.). ) accounts for no more than 20% of net assets.

5. There is no uncompensated loss at the end of this period.

6. The issuer has no other serious independence defects.

You got it? If you want to list on A-shares, the net profit in the current three fiscal years is positive, with a cumulative total of more than 30 million RMB. In other words, the main body of a listed company must have a net profit. And companies like Ali and JD.COM burn money by financing in the early stage of development. In other words, in order to accelerate the development, some powerful Internet companies all occupied the market by burning money in the early stage.

In other words, in order to accelerate the development of these companies, they must constantly look for financing channels and need continuous financial support. As the best financing channel, the stock market should have been the first choice. However, China's A-shares have legally blocked the possibility of listing these companies at the initial stage, because listed companies must have a net profit.

As a result, these companies want to go public on A-shares, so they can only find someone to sell themselves, choose mergers and acquisitions, and take advantage of the situation to go public. Or stop expanding and turn to a profit model, which is obviously not suitable for those ambitious Internet companies.

The failure of A-shares means that the most efficient financing channels in China are blocked, so there are not many choices that these enterprises can make. In order to develop and embrace foreign venture capital, listing overseas is another way.

So, why do so many companies choose to list in the United States? What are the advantages of the US stock market?

Bian Xiao also listed a few here, you can have a look.

1, IPO efficiency is high and listing speed is fast.

In the United States, as long as you pass the relevant examination, you can apply for an IPO in a few months, and generally you can successfully list in the OTCBB market in about 6-9 months. If it is listed in Chinese mainland or Hongkong, including the reading guidance period, it usually takes 1-3 years.

This has great attraction for fast-growing enterprises, especially internet companies. In China, this aspect is more complicated. Many companies that are willing to go public have a look at the relevant processes, plus the layer-by-layer review and queuing system, and they all spit out that the day lily is cold after the domestic IPO.

2. The stock market capacity is amazing.

The capital capacity of American stock market ranks first in the world, and the power it can provide for the financing development of enterprises is extremely amazing. Take NASDAQ as an example, its market capital capacity is hundreds of times higher than that of Hong Kong Growth Enterprise Market, and the average daily financing amount is as high as more than 70 million US dollars. The average daily trading volume far exceeds that of Hong Kong stocks and A-share markets.

In this context, those super-large enterprises can go public without pressure, and the A-share market is a bit "uncontrollable" when it comes to giant enterprises (see the listing of PetroChina in Hong Kong that year)

3. Enterprise Asset Securitization

Companies listed in the U.S. stock market can make standardized and reasonable cash withdrawals in the U.S. market to achieve profit. Compared with the more complicated domestic terms such as lifting the ban and cashing out, US stocks are more relaxed in this respect.

However, the supervision of US stocks is extremely strict, and there is basically no way to cash out maliciously.

4. Improve the elimination mechanism

The American stock market has a perfect elimination mechanism, and the problem enterprises are likely to withdraw from the market directly. Moreover, the securities laws of the United States are extremely harsh and fierce. The pressure brought by delisting and subsequent legal follow-up makes listed companies have to think twice. Non-compliant means, including insider trading, cannot be used so blatantly.

It is this that creates a relatively healthy and ideal financing environment for the US stock market (of course, there are also many fairy stocks and fraudulent stocks, but they are relatively healthy in a high probability)

5. Less off-site intervention.

What domestic listed companies are most afraid of is the temporary intervention of official institutions such as the China Securities Regulatory Commission.

I don't know when it will be published, what it will be, and whether I can understand the new text. This "three unknowns" was once widely circulated as a joke in A-share listed companies.

Domestic regulatory authorities often have some cases of "overcorrection", which is like a referee whose whistle is "broken" on a football field. At first glance, they seem to be trying to maintain order, but they also objectively broke the overall fluency.

Because of its style of handling experience and relatively perfect laws and regulations, the American stock market generally adopts a relaxed attitude. In the domestic market, there is basically no such strange thing as the board of directors and shareholders of the enterprise passing the trading plan, but the key nodes have to be approved by the CSRC and the exchange.

A shares also have advantages.

Of course, the advantage of A shares is also obvious, that is, once A shares are listed successfully, the valuation of enterprises is often higher than that of overseas listed enterprises. If it is listed in China, the price-earnings ratio is 30-40 times, which is very common. Issue shares in the same industry with a P/E ratio higher than that of long-term market transactions. This situation will undoubtedly make listed companies issue the same shares and get more money.

All in all, if you want to cut leeks to make money or raise money, then the A-share market is really the first choice. If we really can't meet the domestic listing standards (such as JD.COM in those days), we can only seek capital to "go out to sea".

In the final analysis, domestic listing depends on your current book, and overseas listing depends on your future disk.

Let's call it a day. See you next time.