this man is not calm

Chapter 377 Context Analysis
Given the current financial conditions in the country, not all good companies are listed, and many century-old companies, represented by family businesses, are not listed in the secondary market.

The more mature the stock market is, the lower the listing threshold is, but the cleaning efforts will definitely be greater.

As of the beginning of 1997, there were only more than 250 companies listed on the Beijing Stock Exchange, a few fewer than two years ago. The reason was that the number of companies that voluntarily or involuntarily delisted was greater than the number of companies approved for listing.

If Jin Shang had not taken over CSSC Electromechanical, although its performance had improved in the past two years, it would probably have been forced to delist.

Listing in the secondary market has both advantages and inconveniences. If you just want to raise funds and then sell the company, it is quite difficult and you may easily get into lawsuits if you are not careful.

The number and activity level of listed companies also reflect the vitality of private finance to a certain extent.

As it stands now, the strength is slightly insufficient. The quality of listed companies is much better than in the previous life, but the number has been halved.

In fact, as a major shareholder of a listed company, as long as the stock price rises and the market value increases, it is a good thing. It is not necessary to cash out and sell it to get benefits.

For example, the share price of CSSC Electromechanical has been rising steadily, and Jin Shang's shares have become more and more valuable. In the past year alone, he has made a net profit of more than 40 million through the securities lending business, which is a profit with almost no risk.

As for the money obtained through various pledge guarantees, preferred stock dividends, refinancing, corporate bonds, etc., the returns obtained from reinvestment will be even greater.

Turning paper wealth into real money is not just about cashing out at a high price. A clearance sale is a last desperate measure and people will not sell off easily until they are at their wit's end.

Even so, not all high-quality assets will be pushed into the secondary market. The football club and many pieces of land and real estate owned by Jintoki are considered ancestral properties and are unlikely to be listed. Fresh food supermarkets, large garment and textile factories, chain hot pot restaurants, Uniqlo stores, etc. are traditional industries that are steady and reliable, with ample cash flow and solid operations. As long as they can persist, they do not need financing.

The Minxing Bank led by my second uncle Mei Yingnian is different. This kind of business relies entirely on credibility and reputation. It is not listed and its financial statements are not transparent. Who knows how strong you are and whether your savings are safe?

When it comes to capital-intensive enterprises, capital operations are naturally required and financing channels must be unobstructed, otherwise the ability to resist risks will be too poor.

Jinxi Video, which is preparing for a listing, is another case. On the one hand, it needs money to expand its business, but an Internet media group that serves the general public is naturally a public company. It must either choose to strategically introduce state-owned capital or push it into the secondary market. In this case, it is inevitable that it will be subject to supervision by the people.

It's okay to do small things, but once you expand it, you have to consider sharing the profits and risks.

When it comes to capital operation, Zhang Yunying is a layman, and Jin Shang is only a half-baked expert. However, Mei Wenhui, who received elite education since childhood, knows more.

After listening to Jin Shang's description, I thought about it for a while and figured out the twists and turns.

"It's not a big problem. If you can complete the employee stock ownership by next month, you can prepare the prospectus and prepare for the roadshow."

After a pause, Mei's cousin explained very seriously,
"These rules of the capital market do not necessarily mean iron thresholds or red lines. For example, if the actual controller does not change within three years, the main business is positive within three years, and the revenue of a single financial reporting period exceeds 200 million, it means that if it is achieved, it is considered excellent and will be given special attention, and most of the time it will be green light all the way; but if it does not meet the standards, it does not mean that it fails. It can be discussed based on specific analysis of specific circumstances. Of course, in most cases, there is no room for compromise. There are so many companies waiting in line for pre-examination, and there is no time to help you check for omissions and fill in the gaps one by one. If a colleague helps to speak for you, or gives a roundabout way and a tolerable explanation, people are still willing to raise their hands."

Upon hearing this, Jin Shang immediately understood.

"There are no principled issues in the procedure. Does that mean that as long as the 'intention' is there, people are willing to do a favor?"

"Of course, it's harder to make people take risks, but if it's for the sake of face, then we can talk about it. We're all in this business, we see each other every day, so what's there to not talk about?"

Patting Jin Shang on the shoulder, Mei Wenhui said confidently,
"Do you know some of the fastest records in the secondary market? The fastest listed company in history was listed nine months after its establishment. This company was acquired and privatized more than ten years ago. The fastest listing record for existing listed companies is two years and three months. The fastest time from application for guidance to listing is two months... There are many other jaw-dropping data. Which of them fully meets the requirements?"

"That's true!"

It won’t be long before these records are broken drastically, and the soon-to-be-established China Television Media will dazzle everyone.

In comparison, Jinxi Video, which plays a gray area and is strictly speaking not in violation of the rules, can be regarded as pure as a little white flower.

However, you can turn a blind eye when applying for listing, but once listed, the supervision is unambiguous, and financial compliance, report audits, the board of directors and the board of supervisors can no longer be treated as a joke. Investors will come to you from time to time to request research, and you cannot refuse.

It’s no wonder that some companies are unwilling to go public. Their bosses are not comfortable being listed and face many constraints.

However, there is one thing that Jin Shang is still a little confused about...

"Speaking of which, it has been almost 30 years since the establishment of the domestic secondary market restructuring. It should have been very mature. Why are there so few listed companies? I looked and found that during the economic upswing, there were not many listings, but many delistings. However, during the economic downturn, the opposite was true. Isn't this a bit counterintuitive?"

"This is it!"

Mei Wenhui rubbed his nose awkwardly, hesitated for a while, and then said,

"I used to have this doubt and asked many people about it, but later I gradually realized it. Going public is nothing more than accepting public supervision, promising some conditions, and using other people's money to do your own business. When the economy is good, no one is short of money, the currency is loose, and financing is simple. There is no need to beg in the secondary market, unless you come here with the intention of fraud from the beginning. Only when the external environment is bad and everyone is short of money will they think of raising funds to tide over the difficulties."

“In other words, a surge in the number of listed companies in the stock market, or too many unsavory stocks, means that the economy is bad?”

"certain!"

Mei Wenhui answered very pertinently:

"Those that can be listed on the secondary market should be the best of the best. If there are too many fakes, doesn't that mean something bad is going to happen?"

"Understood!"

The biggest difference between today's secondary market and that of the past is that market participants are stronger. They are all thousand-year-old foxes and cannot play the game of Strange Stories from a Chinese Studio.

The review for listing is stricter and the implementation of investor protection is more stringent.

The cost of fraud is extremely high, and if you are caught, the consequences will be dire.

Qi Zhaoyun was implicated and arrested. He did not take the initiative to participate, but knew about it but did not report it, provided convenience, and did nothing. He has been working on the sewing machine for more than two years, which shows how risky this thing is.

As for why this happened, it's very simple. The main buyers and sellers are institutions, there are few individual investors, and the threshold for opening an account is not low. In addition, the Internet era has not yet arrived, so there are no online clients, mobile apps, bank-securities links, and other services.

Individual investors basically go to the retail hall to trade at the counter, while those who are more financially capable go to the medium-sized and large-sized rooms.

As for the threshold, the handling fee is 3,000 and the deposit is 100,000.

That's right, the entrance is so exaggerated, such simple and unpretentious conditions have stopped a large number of "leeks" who want to go to the capital market to make money. In this era when a family with an annual income of 10,000 yuan is considered decent, those who can take out 100,000 yuan of spare money to speculate in stocks are not ordinary leeks, and they cannot be cut, at all.

Coupled with various safeguards, if something does go wrong, class action lawsuits will often be initiated to protect one's own rights and interests. Some newly established law firms that want to make a name for themselves will represent the case for free.

Therefore, there are fewer listed companies in the secondary market at present. They may not be the best in the industry, but they are definitely large modern companies with strong strength, large scale and standardized management that can stand the test.

The maturity of stock investors is far from comparable to the noisy aunties in the vegetable market, the fishing uncles or the bar girls in the previous life.

As the World Trade Organization becomes more active, global division of labor deepens, and capital becomes more involved, it can be foreseen that more and more companies will be pushed into the secondary market in the future, especially emerging industries such as the Internet, semiconductors, and new materials, which will become the main force.

Currently, listed companies on the Beijing Stock Exchange are basically concentrated in the fields of machinery manufacturing, auto parts, railway and highway transportation, coal energy, metallurgy and chemical industry, finance and insurance, and shipping and logistics. There are very few truly high-tech companies, and there is not a single one in the Internet IT industry. Either they are very strong and have no plans to go public for the time being, or they have not yet reached the threshold.

"Why are there so few tech companies? Logically, there shouldn't be that many!"

"Well, the risk appetite of domestic capital is obviously low and too conservative. In order to open up financing channels for emerging companies, the GEM was established. However, it is not well-known enough and has average influence. Only when real 'unicorn' companies are cultivated to support the facade can the situation be improved."

"I see, that's what I said!"

Except for a few hardware manufacturers, the entire network IT industry is basically unprofitable, with poor financial statements and few fixed assets. It is supported solely by valuation and goodwill, and no one buys into it at all.

This was in 1997. Software companies without hardware support were like sand castles that would collapse at the first blow. Microsoft was helped by IBM, which helped it get through the most difficult early stages of its development. It also reached an alliance with chip manufacturers, which was considered a combination of software and hardware.

Look at those IT giants that were purely hype concepts on the Nasdaq in the 1990s. Few of them survived, and the bubble burst was not far away.

With the performance being like this abroad, people in China naturally dare not invest blindly.

Only after the first bubble was squeezed out and the dross was eliminated, the Internet would usher in its first leap.

At present, it is still the golden age of computer hardware, operating systems, browsers and office software. The Internet still needs to further prove itself, and Jinxi Video is the first to take the plunge. At least in China, it is the first company to go public and raise funds to increase its investment in the Internet.

"Wait, doesn't this mean that the importance of my Jinxi Video is more important than you thought?"

"You just realized that?"

Mei Wenhui said with a smile,

"The first Internet company to go public in Europe and the United States was a browser, which was listed in September of the year before last. As for China, it got up early but arrived late. There are no companies listed on the New Third Board. The fundamental reason is that domestic funds do not recognize such illusory things. The risks are too great. Only..."

Looking at his little cousin's calm face, Mei Wenhui sighed inwardly.

"E-commerce seems to be quite interesting, especially your Jinxi Mall has added warehousing and logistics, which is very popular."

"The Bodhisattva with a temple is the real Buddha and is naturally worthy of worship."

"That's right!"

If you can run, the monk can't run the temple!
No one understands the invisible and intangible Internet, but the real land, warehouses, mountains of goods, huge numbers of employees and company headquarters are all high-quality assets.

Chat software, online games, online reading, etc., even though their valuations are higher than one another, when you really have to pay out real money, they all shrink.

Jin Shang has raised the price of acquiring Fetion to 500 million, but it is still impossible to succeed, and the higher the price, the harder it is to buy.

For Hao Qilian, whether or not he can make money is secondary. After all, it is just a side job to earn some influence and arrange some salary. But if there is a risk of asset loss, or even he will be held responsible, it will be even more impossible for him to make a decision.

Will you sell it for 500 million?
What if things develop better in the future and are worth 5 billion?
For those who decide to sell, won’t their future path be narrowed?

After all, it is still too abstract. No one knows how much these things are worth. Traditional valuation methods cannot measure such emerging industries at all.

If Jinxi Video goes public, it will be the only one in the secondary market. It is a scarce resource, at least it is very rare now.

Thinking of this, Jin Shang's heart suddenly became hot.

"The valuation is 20 billion, and the financing is 3.5 billion? That's too low, we need to raise the price! The valuation is 30 billion, and the financing is only 5 billion!"

With so much money, it is enough to produce a thousand "Big Times" and five hundred "Drunken Master" at the same time. First, take over the special effects center of the Shanghai Animation Film Studio, and then recruit people for research and development. We must make it bigger and stronger, as it will be needed in many places in the future.

Then there is the data center, where we can try to upgrade our weaponry.

It's so comfortable to use other people's money to build your own business.

"We have to hurry up and get it on the market as soon as possible. Time is life."

In the words of Mr. Qu, the literary and art circles are actually quite confused about the future direction and don’t know which direction to push their efforts. Since they don’t know how to choose, then give up the choice and leave it to everyone to judge.

Films and TV dramas that are closer to ordinary people are the weather vane.

Launch a series of works into the market and see which ones receive the best reviews and are most accepted.

Coming from the masses and going back to the masses will never be wrong.

Even if some people hold different opinions, it doesn’t matter.

The masses like it and the people love to watch it. If you don’t like it, who do you think you are?

If you think in this way, your thoughts will suddenly become clear.

Whether it is filming a TV series or a movie, producing animation, creating comics or novels, or building theme parks, amusement parks and tourist attractions to enrich the spiritual and cultural life of the people, money is needed.

If you want to make money, you must do it with confidence!
(End of this chapter)