Buying Houses And Buying Cars, How Should We Spend Money On The Companies Listed On The Gem?

With the gradual increase in the price earnings ratio and the surge in the issue price, it is easy for the GEM companies to get over raised funds, and the phenomenon of over subscription has become increasingly fierce.

According to the investor report, as of April 20th, the total capital raised by 71 GEM companies listed as high as 27 billion 720 million yuan, the average raised by nearly 400 million yuan per household.

Data show that the first batch of listed companies on GEM was over raised 129%, second batches were over raised 209%, third batches averaged over 248.5%, fourth batches averaged over 250%.

The GEM companies, which were once short of money, are now faced with the trouble of "too much money to spend".

Chen Guohua, President of Guangzhou Anhui investment company, said that for the gem enterprises at the early stage of growth, it would be more difficult to digest hundreds of millions or even hundreds of millions of capital raising funds through its main business.

This has led many GEM companies to raise funds on the bank account to "sleep", while some radical companies may expand blindly.

How should we raise funds?

Despite the guidelines issued by the Shenzhen Stock Exchange in October 15th last year, "guidelines for the operation of GEM listed companies" (hereinafter referred to as "guidelines") and the "Memorandum No. first of the gem information disclosure business" issued earlier this year (the "memorandum of understanding") has made strict provisions on the use of raised funds, but many companies still use it unreasonably.

"Investor newspaper" through a large number of analysis and investigation found that the use of these fund-raising funds appeared chaos: some used to buy houses, buy land, some used to buy cars, others passed the "capital replacement" to avoid regulation.

Chaos one: heavy money to buy a house

The memorandum emphasizes that the raised funds are applied to the main business of the company, and can not be used to carry out high-risk investments such as securities investment, entrusted financial management, derivatives investment, venture capital, and financial assistance to others.

But many companies have bought property with super funds.

The most abundant financial resource is the number of fund-raising funds in China. Over 1 billion 300 million yuan has been raised and 421 million yuan has been purchased for the 16 floors of the Beichen first building in Chaoyang District.

And the Pathfinder is also not to be outdone: 54 million yuan to buy 24 floors of A block, Jin Qiu International Building, Haidian District, Beijing, plus decoration, tax, purchase of office equipment and personnel training costs, the total cost of 66 million yuan.

This alone accounts for 53% of the over raised funds, excluding tax and decoration.

In addition, medio bought a 8 floor property in Beijing Kuang Yi Building with 23 million 245 thousand yuan. Tianyuan dike bought 8 floors of 56 houses in Beijing splendid Times Building, and the total purchase price is expected to be 51 million 700 thousand yuan.

Silver River shares also joined the ranks of buying houses, plans to invest 86 million 400 thousand yuan in Shanghai, Guangzhou, Chengdu, Beijing, Wuhan to buy office buildings to establish regional marketing center, the purchase area of 400~1000 square meters.

Le Pu medical in 2009 annual report, will use no more than 69 million 100 thousand yuan to buy about 5750 square meters of office buildings.

Ding Han Technology to buy 80 million yuan to buy Zhongguancun Fengtai garden headquarters base two phase 34 plots 14 building property, the total cost of 98 million 600 thousand yuan, accounting for 39% of the total raised.

Statistics show that as of April 14th, about 782 million yuan in the GEM listed company's over raised funds were used to buy land and buy houses, which accounted for 23.86% of the funds raised by the over raised funds, and became the first investment in the super fund raising.

Buying office buildings does not seem to have deviated from the main business.

Some analysts believe: "as the company's main business revenue increases and market competition intensifies, buying office buildings will help expand business outlets and boost marketing capabilities."

However, more people believe that this is the blind investment of ultra raised funds.

The fact is that most of the offices purchased by these companies are concentrated in Beijing, and the recent Beijing property market is booming. GEM companies have become active buyers in Beijing's property market.

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Chaos two: buying land

While many GEM companies use extra funds to purchase office buildings and marketing sites, other GEM companies begin to buy land for building company headquarters or bases.

Over 305 million Wah Yuen testing and testing also launched a new project to build China headquarters and Southern China testing base, including 18 million yuan for land purchase and 164 million 850 thousand yuan for building and decoration of headquarters buildings and laboratory buildings, of which 135 million yuan was used for raising funds, accounting for 44% of the total.

Xing Hui car model proposed investment of 130 million yuan in Zhangzhou, Fujian to establish baby car mold manufacturing base, of which 27 million 860 thousand yuan for the purchase of land, 37 million 170 thousand yuan for office buildings, factories, dormitory building.

The new States belong to the "buy land group". The company proposed to purchase 37 thousand square meters of industrial land use rights in the petrochemical area of Dayawan economic and Technological Development Zone in Huizhou with the amount of 20 million yuan of the raised funds. It is the two phase of the new electronic chemicals project in Dayawan base. At the same time, it uses 18 million yuan to purchase the 40 thousand square meter industrial land use right of Nantong Chemical Industrial Park, which is used as the land for lithium chemical and chemical projects in Nantong Chemical Industrial Park.

Although the red sun pharmaceutical industry did not put forward specific projects to raise funds, its planning framework also included the right to reserve land for production and operation.

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Chaos three: purchase of vehicles

In addition to buying and selling houses, buying cars has become another way to raise funds for some GEM companies.

More typical is Le Pu medical treatment, the company announced the purchase of office buildings at the same time, also said that it will not be more than 4 million 200 thousand yuan to purchase office vehicles 15~20 vehicles.

Although the share of the purchase and purchase of a car does not exceed 73 million 300 thousand yuan, it only accounts for 41% of the core and domestic marketing network projects, and accounts for only 12% of the funds raised by the company. However, the behavior of buying a car and buying a house is still questioned by many investors.

There are also gem buying companies, including Xin Ning logistics and Dayu water saving.

The same is the purchase of cars, but the two companies are mainly used for the pport of goods vehicles, relatively speaking, closer to the main business.

Xin Ning logistics new subsidiary Shanghai Xin Ning Jie Tong warehousing, plans to use 1 million 500 thousand yuan to purchase vehicles, its purchase of vehicles and unit price have not been explained.

Da Yu has saved 10 million yuan of over raised funds for new sales offices throughout the country, and has purchased office equipment, pport vehicles and pportation facilities for the original sales outlets.

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Chaos four: capital replacement

The guidelines issued by the Shenzhen Stock Exchange last October 15th stipulate that over raised funds can not be used to carry out high-risk investments such as securities investment, entrusted financial management, derivatives investment, venture capital, and financial assistance to others.

As for the amount of over raised funds used for permanent supplementary liquidity and the repayment of bank loans, the memorandum stipulates that every 12 months, the cumulative amount of 20% of the total raised funds must not exceed 20%. Meanwhile, in the process of deliberation, it is required that the bill be approved by more than 2/3 of all directors of the board and all the independent directors, and the sponsors shall expressly agree.

But there are policies and countermeasures.

Some companies avoid regulation by means of "capital replacement".

In November 3rd last year, Yiwei Li released the first board of directors' opinions on capital replacement of gem. It plans to replace the "self raised fund which has already been invested in the main business" with fund-raising funds. At the same time, before the company's fund-raising fund has not yet been implemented, it will take the lead to invest in the main business first.

After that, other companies also followed suit. Hua test detected a replacement of 21 million 350 thousand yuan, and the Lai Mei pharmaceutical industry replaced 21 million 350 thousand yuan, and decided to use over 36 million yuan of the raised fund to supplement the working capital.

Shanghai Jia Hao also used over raised funds to replace the original investment fund-raising project of 12 million of the fund, the company secretaries Ma Rui said that the 12 million yuan is the company's own funds invested, after the replacement is used to supplement liquidity.

According to the analysis of the industry, capital replacement did not change the number of funds on the surface. But through replacement, the funds raised by enterprises become self financing funds of listed companies. They are no longer subject to the supervision of the three party agreement, and are no longer restricted by the SFC only to invest in the main industry, thus evading the supervision of the regulatory authorities on the collection of funds, which in fact is a disguised appropriation of fund-raising funds.