In China's architectural ceramics and even the entire large ceramics industry, "the decline after listing" was once regarded as a "curse" that is difficult to break. It is sad to think back to those days when those ceramic companies were prosperous when they were listed, but were in a miserable state when they were delisted.
It was not until 2013 that the "curse" of "decline upon listing" in the ceramics industry was broken by Dongpeng Holdings; a few years later, listing, which was once closely associated with the "curse", finally changed and became a trend for many ceramics industries. The "hot cakes" that companies are competing to pursue.
Up to now, there are 7 listed companies in the construction ceramics industry (all companies whose business includes construction ceramics are included), namely Haiou Residential Works, Yuexin Health, Diou Home Furnishing, Huida Sanitary Ware, Monali Lisa Group, Dongpeng Holdings, and Tianan New Materials. Among them, only one company, Mona Lisa Group, really only focuses on architectural ceramics. There are even more ceramic companies that have started their IPO journey or proposed listing plans, including Jinyitao Group, Wrigley Home Furnishings, Marco Polo Holdings, New Pearl Group, Shuncheng Ceramics Group, Asia Ceramics, Dajiulu Ceramics, etc.
As we all know, in the construction and ceramics industry that is labeled as "three highs and one low" (high energy consumption, high emissions, high pollution and low processing technology), environmental issues have always been the biggest "stumbling block" for ceramic companies on their way to listing. "; Coupled with the issue of financial transparency, it is even more difficult for ceramic companies to go public. China's construction and ceramics industry has long maintained a market volume of 400 to 500 billion yuan. The scale is not small, but there are only a few listed companies. This is the best proof that it is difficult for ceramic companies to go public.
Why is it so difficult to go public and why are there so many ceramic companies vying to go public?
If we do not distinguish between industries, generally speaking, there are five main benefits that companies can gain from listing.
First, establish a sustainable financing platform to solve the problem of enterprise development funds. Listed companies can not only raise a considerable amount of funds when listed, but can also raise funds through refinancing, bond issuance, etc. after listing. At the same time, with the endorsement of listed company qualifications, it is not difficult to find bank loans; unlisted companies encounter difficulties. When faced with financial difficulties, most people can only borrow money from financial institutions, and the operating risks are very high. To put it figuratively and exaggeratedly, after the company goes public, it is equivalent to having a "cash machine."
Second, expand the visibility and influence of enterprises and brands. Listing isA transformation of the enterprise "from good to great". Once successfully listed, the listed company will always receive attention and supervision from all walks of life and securities regulatory agencies, and the visibility and influence of its enterprise and brand will rapidly expand, whether it is building a brand for consumers or seeking strategic cooperation opportunities with partners. More advantages than unlisted companies. There are such cases in all walks of life, including the construction and ceramics industry. Some companies were unknown foreign nationals in the industry before going public, and their popularity and influence in the industry were also very limited. However, after going public, they became "famous overnight" and quickly entered the public eye and became one of the world's leading companies. As a leading enterprise. Can you guess which listed company in the construction and ceramics industry is in this situation?
Third, improve the corporate governance structure and clarify the development strategy. Listing imposes a series of strict requirements on corporate governance, information disclosure, etc. Only by improving the level of corporate governance structure and improving the transparency of operations can companies meet the listing requirements. Due diligence before the launch of the listing will also allow companies to discover existing loopholes and hidden dangers. This process will promote the gradual evolution of the enterprise from a "reckless enterprise" and "family enterprise" to a modern enterprise, providing institutional guarantee for becoming a "century-old store".
Fourth, increase the benefits of corporate shareholders and management. Listed companies can realize asset securitization, which greatly increases the liquidity of the company's assets. It is more convenient for the company's management and shareholders to cash out and make profits. Chasing high-premium transactions is why many companies are enthusiastic about going public.
Fifth, enhance the attractiveness of the company and increase employees' enthusiasm for work. On the one hand, listed companies are more able to attract talents with their strong visibility, influence and complete corporate systems; on the other hand, listed companies can also retain talents in important positions through stock option plans and encourage them to perform their best. talents, thereby creating greater value for the enterprise.
Specifically, the listing of ceramic companies has a more important role and far-reaching significance.
For ceramic companies, going public can solve a very urgent problem: factors such as increased environmental protection, overcapacity, channel fission, and consumption upgrades, especially the price increases of raw and auxiliary materials, coal, natural gas, and ceramic tiles, have caused a huge disruption in the construction ceramics industry. During the critical period of reshuffle, by raising funds, we will seize the opportunity to become bigger and stronger and become the leader of the reshuffle and the vanguard of the industry.
This is mainly reflected in two aspects:
First, rely on funds to enhance overall strength. In recent years, the proportion of finished rooms has been increasing, and the proportion of finished rooms has been increasing.The trend of channel dispersion and sinking is becoming increasingly obvious. Emerging channels such as project centralized procurement and assembly are gradually encroaching on the traditional sales channels of ceramic tiles. For emerging channels such as centralized engineering procurement and assembly, if you choose to give up, it will be difficult to become bigger and stronger, and you may even be eliminated; if you choose to follow up, you must raise sufficient funds as a backing to further expand your business scale and cost advantages. , build a stronger team, and directly enhance the ability to advance sufficient funds for centralized project procurement. Going public is undoubtedly one of the best ways for ceramic companies to raise funds.
The second is to rely on funds to create environmental protection advantages. In order to win the overall battle and tough battle of "dual carbon" and "double control", this year the country has further increased the intensity of macro-control and environmental protection management and control of all walks of life, especially the "three high" industries. These national measures are reflected in the construction and ceramics industry by limiting power and production, and may become a normalized means. In this context, it has become the unshirkable responsibility of every ceramics company to obey the national "dual control" and "double carbon" overall situation, otherwise it will only be eliminated. If ceramic companies can go public, it means that they have enough funds to introduce more advanced environmental protection equipment, new energy and new technologies that are more energy-saving, emission-reducing, consumption-reducing and efficiency-increasing, thus gaining access to the "double carbon" and "double control" environment. Leading the industry's environmental protection advantages and transforming them into competitive advantages ahead of competitors.
The above are the main reasons why many ceramic companies are rushing to go public first.
Of course, going public is a double-edged sword, and its drawbacks are obvious. For example, establishing a standardized corporate governance structure may affect decision-making efficiency. Standardized corporate operations may bring one-time costs and ongoing costs. Strict information disclosure may increase costs and bring risks. Focusing on stock price performance may lead to short-term behavior. It will affect the long-term competitiveness of enterprises. The regulatory policies of listed companies will impose restrictions on corporate financing and capital operations. Every move of listed companies will easily become the focus of media and public opinion, etc. In the construction and ceramics industry where management is relatively extensive, the disadvantages of listing ceramics companies will be more obvious.
It should be noted that although listing has attracted more and more attention from ceramic companies in recent years, the difficulty of listing has been rising, especially in the context of "dual carbon" and "dual control".
At the "2021 Tianfu Financial Forum" held in Chengdu on October 29Li Hui, deputy general manager of Shenzhen Stock Exchange, delivered a keynote speech and said: The "14th Five-Year Plan" is a critical period and window period to achieve carbon peak. Shenzhen Stock Exchange will consciously stand in the new development stage and support green and low-carbon development. Incorporate sustainable development into strategic development plans, fully, accurately and comprehensively implement green and low-carbon concepts, actively serve and support green and low-carbon transformation, give full play to the role of the platform as a hub, and regard finance as a work goal to assist carbon peaking, carbon neutrality and green and low-carbon development. Top priority. Shenzhen Stock Exchange will strengthen its docking with enterprises related to carbon peaking and carbon neutrality policies, provide special training and policy popularization on green and sustainable development, increase the review of issuers in high-pollution and high-energy-consuming industries, conduct strict review, and guide The issuer pursues green and low-carbon development.
It is conceivable that the road for ceramic companies to go public will be more difficult. In the future competition, ceramic companies that have been listed on the market have already taken the opportunity and are one step ahead.
(Author: Zhuifeng)
