“Science and Technology Innovation Board Daily”, August 8 (Reporter Qiu Siyu) Recently, the number of inquiries and transfers from the Science and Technology Innovation Board has shown a significant upward trend.

According to statistics from the “Science and Technology Innovation Board Daily”, based on the time of the first disclosure of the inquiry transfer plan, since this year, 37 science and technology innovation board companies have announced their inquiry transfer plans, which has exceeded the number for the full year of 2023 (33). Among them, 36 companies have completed the inquiry transfer, with a total transaction amount of 13.084 billion yuan. Lanqi Technology and Stone Technology have completed two shareholder inquiry transfers, and Haier Biotech's inquiry transfer plan is still being implemented.

The number of shareholders participating in the transfer is generally 1 to 3. Specifically, the number of shareholders involved in the transfer of 21 inquiries and transfers was 1; 8 were 2; and 5 were 3. Among them, Nanxin Technology had the largest number of shareholders participating in the inquiry and transfer in April this year, with 12.

The actual share transfer ratio is generally 1% to 3% of the total share capital. Among them, shares transferred by Shanwai Mountain accounted for the highest proportion of total share capital, reaching 3.39%.

In terms of commissioned securities companies, CITIC Securities organized 22 inquiries and transfers, the largest number; CICC organized 11 inquiries and transfers, ranking second; in addition, there were relatively few inquiries and transfers entrusted Huatai Joint Securities, CITIC Construction Investment, Haitong Securities, and GF Securities organizations.

Semiconductor companies have become the main force in inquiries and transfers

Why are inquiries for quotations and transfers sought after by the capital market? An expert from Kande's think tank and attorney Chen Qiaoyi of Shanghai Guangming Law Firm mentioned in an interview with the “Science and Technology Innovation Board Daily” reporter that inquiries and transfers will help reduce the direct impact of shareholders' holdings reduction on the secondary market and maintain market stability. Wang Jiyue, a senior investment banker, also said, “The method of reducing holdings through inquiry and transfer was an innovation in the system design of the Science and Technology Innovation Board at the time; in fact, it was a flood-storage zone-style design that could mitigate the impact of holdings reduction.”

Regarding the market reaction after the announcement of the transfer plan, as shown in the chart above, according to statistics from the “Science and Technology Innovation Board Daily”, the increase or decrease rate of 17 inquiries and transfers on the 5th (5 trading days after disclosing the inquiry transfer plan, compared to the increase or decrease in the stock price before disclosure) was positive. Among them, Hengxuan Technology and Lexin Technology had higher increases of 8.37% and 8.15% respectively.

Another 22 times was negative. Among them, Juchen shares declined the most, reaching 19.06%. On the same day as Juchen Co., Ltd. (July 22), Lanqi Technology and Xinyuanwei, which disclosed their inquiry and transfer plans, also showed a significant downward trend. The declines reached 8.54% and 8.39% respectively on the 5th of the announcement.

At the time, in response to the “Science and Technology Innovation Board Daily” reporter, Lanqi Technology Securities Department personnel said that many factors would interfere with stock price fluctuations in the secondary market, and the company was unable to specifically evaluate the reason. A person from Xinyuan's securities department said, “Reducing holdings may have an emotional impact on some investors, and everyone may have some emotional impact.” (For details, see the previous report of the “Science and Technology Innovation Board Daily”: “Did the inquiry and transfer hurt the semiconductor? The three science and technology innovation board companies disclosed a maximum discount of 6.17% from the market price after the market price”)

It is worth mentioning that in the above, companies such as Hengxuan Technology, Lexin Technology, which have seen high gains, or Lanqi Technology, which have declined significantly, all belong to the semiconductor sector.

According to statistics from the “Science and Technology Innovation Board Daily”, of the 37 science and technology innovation board companies that have disclosed their inquiry and transfer plans since this year, semiconductor companies are the main force, reaching 13. Of these, 8 semiconductor companies have already disclosed their 2024 semi-annual performance forecasts/financial reports:

The performance situation is shown in the chart above. It is easy to see that the net profit of the eight semiconductor companies has all achieved varying degrees of increase. Among them, Lanqi Technology's net profit for the first half of the year was expected to increase 612.73% to 661.59% year-on-year, and the growth momentum was strong.

From an industry perspective, the semiconductor industry's boom has been steadily picking up recently. SIA recently announced that semiconductor industry sales for the second quarter of 2024 (three-month moving average) increased 18.3% year on year and 6.5% month on month to reach 149.9 billion US dollars.

A number of semiconductor companies also revealed positive signs in their performance forecasts/semi-annual reports and other related announcements, such as clear industry recovery, continued recovery in market demand, and full orders. Wang Shubao, an analyst at Guodu Securities, said that under the impetus of AI demand and the influence of the external environment, the domestic semiconductor industry chain will usher in accelerated development.

Quotations and transfers relieve market pressure

Returning to the inquiry and transfer system itself, Kant think tank expert Chen Qiaoyi of Shanghai Guangming Law Firm also mentioned to the “Science and Technology Innovation Board Daily” reporter that in addition to relieving market pressure and reducing direct impact on the secondary market, under the inquiry and transfer system, original shareholders can withdraw at a more reasonable price, while investment institutions have the opportunity to obtain high-quality assets at lower prices, thus achieving a win-win situation.

According to reports, inquiries and transfers require quotes from multiple public funds and brokerage firms to assist in pricing. The pricing is fair and reasonable, and highly attractive to institutional investors, so it can attract the participation of professional institutional investors, optimize the investor structure, and enhance market rationality.

Looking at the 37 science and technology innovation board companies mentioned in this article, the transferees are mainly institutional investors such as private equity funds, public funds, insurance companies, and QFII (Qualified Foreign Institutional Investors).

However, methods of reducing holdings, such as bulk transactions and centralized bidding transactions, are determined based on market trends or the closing price of the previous trading day, and may have a major impact on the market. In addition, enquiry transfers usually have a 6-month sales limit, while other methods of reducing holdings often have an unfixed sales limit period or a shorter sales limit period.

In terms of pricing, specifically, the price of an inquiry and transfer is usually not less than 70% of the average stock transaction price on the 20 trading days before the subscription invitation is sent; the bulk transaction price is not less than 80% of the closing price of the previous trading day; the agreement transfer price is not less than 80% of the closing price on the day the agreement is signed; and the centralized bidding reduction price is determined based on market trends.

Regarding the 30% off reserve price, senior investment banker Wang Jiyue said that compared to auction transactions, there is a lock-up period arrangement (usually 6 months to transfer shares). Precisely because of the existence of this lockdown period, the transferee is at risk and needs to be discounted for risk compensation. The amount of the discount depends on the results of the transferee's bid. “The lower limit is legal, and only when there is sufficient room for the lower limit can the viability of the transfer be guaranteed.”

Currently, an inquiry and transfer system has also been adopted by GEM. In May of this year, the Shenzhen Stock Exchange issued “Guidelines for Self-Regulatory Supervision of Companies Listed on the Shenzhen Stock Exchange No. 16 - Transfer of Shares by Shareholders of GEM Listed Companies through Quotation and Placement Methods”.

Regarding the inquiry and transfer system itself, many market participants mentioned to the “Science and Technology Innovation Board Daily” reporter that active inquiry and transfer is conducive to improving market liquidity, mitigating the direct impact on the secondary market, and protecting investors' interests. With the continuous optimization and improvement of the inquiry and transfer system, this method of reducing holdings is expected to play a more important role in the future capital market and promote market maturity and stability.