Series of promotional articles on the investor protection special action of "Being an Honest and Trustworthy Listed Company" (Part 2)
Release time：
2020-06-17
Registration system is the new track for listed companies!
Aier Eye Hospital Wu Shijun
Listen to thunder in silence.
May 15th is the second "National Investor Protection Day", which seems to add a unique charm to the increasingly strengthened investor protection in China's capital market during this special period.
The new Securities Law has been implemented since March 1st, establishing a securities issuance registration system in China's capital market. Perhaps due to the attention drawn by the epidemic, the market generally lacks sufficient preparation and in-depth consideration for the rapid promotion and deep impact of the registration system. Recently, the registration system reform of the ChiNext board has been announced to be launched, and the incremental and stock reforms will be promoted synchronously. Such a large scale is to accumulate experience for the implementation of the registration system reform in the entire market. And the registration system ultimately focuses on protecting investors. Whoever protects the rights and interests of investors, investors will trust them, and financial resources will flow to them. The survival of the fittest in the capital market will further intensify.
The rapid progress of reform is not without traces. The new securities law clarifies the registration system, fundamentally changes the rules of the capital market, strengthens market supervision, pays attention to protecting investors' rights and interests, significantly increases the cost of illegal activities, and takes a qualitative step towards marketization and rule of law. At present, there are less than 4000 listed companies, and in the future, there may be tens of thousands. It can be foreseen that the registration system is the new normal, and it is becoming increasingly common for companies to go public or delist; The registration system is a weighing machine that will more accurately measure the quality of listed companies; The registration system is a developer, and the information disclosure of listed companies must be more comprehensive and transparent.
From this, it can be seen that the registration system is a new competition track for listed companies, and the relationship between listed companies and investors is like that of fish and water. Protecting the water means protecting the fish. How can we lead all the way, how can we be like fish in water? This is a major issue faced by all listed companies.
1、 Understand new rules and establish new concepts
The registration system focuses on information disclosure and requires listed companies to disclose information truthfully, accurately, and completely. Regulatory agencies do not make substantive judgments on the quality and price of securities. Under the registration system, there has been a qualitative change in the conditions for securities issuance, from the emphasis on "having sustained profitability" in the approval system to "having sustained operational capability", and from "profitability" to "operation". This is a profound change in thinking. Because business ability is more inclusive and diverse than profitability.
The new regulations for refinancing of listed companies, released on February 4, 2020, also follow the spirit of the registration system, cancel the requirement of continuous profitability for two years, and lower the bottom price to 80%. The comprehensive implementation and step-by-step implementation of the registration system should be said to be both proactive and prudent, reflecting the consistent progressive reform thinking.
In fact, as long as a company has the ability to sustain operations, it will inevitably have the ability to sustain profitability, which is a relationship between process and outcome. However, many new economic models require financing before achieving profitability, and the registration system solves this problem. Therefore, it is required that the issuer fully disclose information and not allow investors to be confused or even mislead the market through "beauty".
In order to ensure the implementation of information disclosure, the Securities Law has established corresponding punishment systems, and regulation has not only been strengthened but also electrified. The fines for fraudulent issuance, market manipulation, insider trading, and other behaviors have been increased fivefold or even tenfold, and a special chapter has been established to improve the civil litigation system, protect the interests of investors, and introduce the Chinese characteristic collective litigation system, allowing investor protection agencies to accept the commission of more than 50 investors and represent them in litigation, "explicitly withdrawing or implicitly joining", reducing the difficulty of litigation and increasing the willingness to protect rights. With the emergence of professional "autumn chrysanthemums", such rights protection lawsuits will increase significantly in the future, and listed companies cannot harbor any lucky mentality.
2、 Strength must be hardcore, and operation must be standardized
The great progress of the registration system is to select listed companies with the ability to protect investors through market-oriented selection, guide the flow of capital resources to high-quality enterprises, and promote the development of the real economy and economic upgrading and transformation. The Science and Technology Innovation Board, ChiNext Board, New Third Board Select Layer, Main Board, and SME Board will all be opened successively. The number of listed companies continues to increase, and only with good performance, standardized transparency, and listing is no longer difficult. The era of being a rare commodity for listing is gone forever. The balance of the capital market is gradually shifting from listed companies to investors, and the group of listed companies must adjust their mentality and change accordingly, with new thinking and new actions.
On the one hand, it is necessary to adhere to the original intention, follow the right path, ensure the compliant operation of the company, and repay investors. Roll up your sleeves and work hard, it doesn't mean acting recklessly or recklessly. Listed companies should have a deep sense of awe. 'Fear' means not engaging in crooked ways, while 'respect' means fully respecting investors from the bottom of their hearts and creating rich returns for the vast number of investors. For example, Aier Ophthalmology has been rated as A-level in information disclosure by the Shenzhen Stock Exchange for several consecutive years. Its cumulative cash dividends have exceeded twice the amount raised in the IPO, and the company's market value has reached 20 times that of its initial listing. On the other hand, we should actively develop a harmonious shareholder culture and advocate for voting by hand. For example, the annual shareholders' meeting of Aier Ophthalmology is like an investor carnival, where they come from all over the world to provide ideas and suggestions for the company's development.
On the other hand, adapting to new situations and forming new advantages. In addition to strengthening their main business, listed companies should also pay more attention to investor relations (IR), building it into a competitive advantage for the company, continuously gaining more trust from investors, increasing the company's market value and shareholder value, and thus promoting the realization of the company's strategy. For example, in 2017, a large number of private placements by listed companies failed because no one subscribed. Even in this situation, Aier Ophthalmology successfully issued and introduced strategic shareholders such as Hillhouse Capital. The financing at a critical stage has propelled the company's strategic development. So respecting investors is a win-win situation for both investors and companies, and should be a rational choice for listed companies. If one remains passive and conservative, they will be marginalized.
3、 Adapt to the new normal and seek new breakthroughs
Under the new normal of the registration system, listed companies must focus on investor protection and seek breakthroughs wholeheartedly, comprehensively, and throughout the entire process.
1. Practice long termism and share weal and woe with investors
Listed companies should treat investors with honesty and sincerity, like Forrest Gump, and never forget their original intentions. No matter how the market changes, always stand with investors. In the more than ten years since its listing, Aier Ophthalmology has experienced several irrational and drastic fluctuations. The company's controlling shareholder and chairman have decisively increased their holdings in the first place, demonstrating confidence to the market through practical actions. In this year's outbreak of the COVID-19, the company focused on the fight against the epidemic and communication at the same time. It communicated closely with investors through teleconferences, online Q&A, open letters and other ways, analyzed the industry development law and the company's business situation in depth and objectively, and effectively resolved investors' anxiety. With the gradual recovery of the company's market value, it has recently reached a new historical high, effectively safeguarding the interests of investors.
In order to promote rational investment, Aier Eye Hospital established and implemented the "National Hospital Investor Reception Day System" in 2019. Investors can go deep into the front line and learn about the development situation from the hospital management; To promote long-term investment, the founder of the company gifted 100 shares to individual shareholders who held 600 shares for six consecutive years last year (over 300 of whom met the criteria); In order to promote value investing and facilitate domestic and foreign investors to grasp important information in a timely manner, the company has launched bilingual interpretation in Chinese and English for regular reports and major issues.
Lu Yao knows the horsepower. Since its listing ten years ago, Aier Eye Hospital has maintained a compound annual growth rate of over 30%, with transparent and standardized operations, winning the favor of the capital market. The company's investor team has gradually gathered a large number of well-known public funds, private funds, world-class investment institutions, long-term individual investors, and the "national team" of Central Huijin.
2. Make good use of the listing status and accelerate the development of the main business
After a company goes public, it is the real marathon run. We should be good at using the capital market to strengthen our main business, rather than buying and selling with IPO funds. To achieve this, it is necessary to have a clear strategy and focus on what the company should do well in the long run; We also need to regulate governance and accumulate a good market reputation. At the same time, we should also be good at learning from the successful experiences of other companies, pay attention to researching and making good use of various tools in the capital market, such as public issuance, targeted issuance, rights issue, convertible bonds and other financing methods, as well as mergers and acquisitions around our main business. The company should choose the optimal solution based on the actual situation and the opinions of intermediary agencies.
In terms of large-scale mergers and acquisitions both domestically and internationally, the company is composed of the "Eight Nation Alliance" consisting of the Securities Department, Investment Department, Business Department, Finance Department, Quality Control Department, Human Resources Department, Operations Department, Equipment Department, etc. During due diligence, the company considered future integration work and empowered the integration of the acquisition targets, greatly improving the success of mergers and acquisitions and achieving an organic combination of internal development and external expansion.
The use of equity incentives by listed companies has natural advantages, and making full use of them is conducive to gathering talents and overtaking in the curve. Aier Ophthalmology has implemented three consecutive equity incentives, with a target audience of 3000 people, allowing core talents to share the company's growth achievements. Afterwards, the company launched an upgraded version of equity incentives - the "Partner Plan", which became a major innovation in the medical industry. A large number of doctors came in droves, and currently the number of ophthalmologists is close to one eighth of the national total. The strong talent strength and sound training system have broken the core bottleneck and provided a strong backing for the company's nationwide chain.
3. Establish a united front and expand the 'circle of friends'
Our party has achieved success in revolution and construction, and one of the three magic weapons is to establish a united front. Similarly, for listed companies to continue to develop, in addition to serving customers well, they also need to be good at integrating resources from all aspects and developing "friend circles" in various lines. For example, various investors belong to the key "united front targets". Over the years, a large number of investors or their families have become hospital clients, gaining a deeper understanding of industry trends, company technology, and services. Over time, trust and lasting positive interactions have formed between listed companies and investors.
The smooth development of listed companies is crucial for government departments, regulatory agencies, suppliers, listed company associations, various media outlets, investor protection centers, hospital employees, and partners. Listed companies need to strive to become "model students" in order to gain more support from all parties. Aier's performance comes from its own efforts and benefits more from the help of various sectors. Therefore, since its listing, Aier Eye Hospital has simultaneously disclosed its annual report and the "Social Responsibility Report" for 11 consecutive years, reporting the company's contribution to society.
4. Keeping up with the times and innovating, making the company's image more "three-dimensional"
Regardless of the industry, enterprises must adapt to the changes of the times. As public companies, listed companies need to establish close and harmonious relationships with mainstream media, and convey the company's characteristics, innovation points, and shining points from multiple perspectives in order to attract more investors' understanding and attention.
At the same time, listed companies should learn to use new media to enhance brand penetration, including Tiktok, official account, We Media, etc. Always attentive, with themes everywhere. For example, we made a 10 second short video on Valentine's Day in response to the occasion:
Dad asked his daughter: My boyfriend has been talking to you for five or six years, why hasn't he bought a house yet?
The daughter confidently replied, 'He has bought Aier Ophthalmology stocks!'!
Through this lifelike scene, the audience naturally associates the company's good and sustained growth over the years, with a large number of clicks.
A listed company is an organism, and regular reports alone are far from enough. The company's long-term development is determined by its corporate culture, which can be vividly demonstrated through the use of new media. For example, during the epidemic this spring, more than 2400 medical staff from Aier Eye Hospital submitted petitions and went to the front lines of epidemic prevention and control in various places. This is not accidental, because the two founders of the company also wrote a bloody letter 35 years ago, requesting to bravely fight on the front line of Laoshan in Yunnan! We published an article on self media titled '16 year undercover employee of Aier Eye Hospital reveals shocking secrets of the chairman and CEO', revealing that this' retrograde 'spirit comes from the cultural genes of the company. Investors have expressed their deep impressions.
In short, the registration system is being implemented step by step, and the concept of investor protection is becoming more popular. Honesty is the passport of honest people, and progress is the guiding light for those who move forward. Looking forward to the group of listed companies speeding and steadily on the new track, making high-quality development the main theme of China's healthy economic growth!
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