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since september, the a-share market has continued to decline in volume, but the restructuring index has performed relatively well, significantly outperforming the csi 300 index. "mergers and acquisitions and restructuring" is a high-frequency word in the capital market recently, and has been mentioned by regulators many times since last year.

recently, liaoning provincial party committee secretary and provincial people's congress standing committee chairman hao peng and provincial party committee deputy secretary and provincial governor li lecheng met with china securities regulatory commission party committee secretary and chairman wu qing in shenyang. wu qing said that china securities regulatory commission implemented the new "national nine articles" deployment to further deepen the capital market reform in an all-round way, continuously improve the quality of listed companies and investment value, give full play to the functions of the multi-level capital market system, support enterprises to grow and develop through equity and debt financing, futures risk management and other channels, and take multiple measures to activate the merger and reorganization market.

mergers and acquisitions and restructuring enter an “active period”

since last year, especially after the release of the new "nine national regulations", the china securities regulatory commission has taken multiple measures to stimulate the vitality of the m&a and restructuring market to further optimize the restructuring policy environment. just before this, the china securities regulatory commission stated that with the support of multiple policies, my country's capital market m&a and restructuring are entering an "active period".

according to securities times databao statistics,so far this year, a total of 147 companies (deduplicated) have disclosed the latest major restructuring progress. the number of companies exceeds the whole year of 2022 and 2023, and is basically the same as 150 in 2021.among them, 66 companies disclosed major restructuring matters for the first time this year, including *st renle, daye co., ltd., hubei yihua and other companies.

from the perspective of the participating entities, state-owned enterprises (including local state-owned enterprises and central enterprises) and private enterprises are the main forces in mergers and acquisitions and restructuring. among them, the proportion of state-owned enterprises participating in mergers and acquisitions and restructuring is on the rise, while that of private enterprises is on the decline. since the beginning of this year,there are 64 state-owned enterprise companies in total, accounting for nearly 44% of the total, while the proportion of private enterprises has dropped to around 49%.

from the perspective of restructuring purpose, this year,the number of m&a and restructuring cases for the purpose of "horizontal integration" reached a new high and exceeded 40% for the first time, indicating that listed companies have significantly increased their willingness to integrate resources and exert synergy effects through industrial chain mergers and acquisitions. at the same time, the number of strategic cooperation and asset adjustment type merger and reorganization cases has dropped significantly.

"hard technology" and securities firms are the main camps for mergers and acquisitions and restructuring

from the perspective of m&a targets, calculated based on the first disclosure date, this year,strategic emerging industries based on "hard technology" and investment banking and brokerage industries have become the main camps for mergers and acquisitions.for example, shuangcheng pharmaceutical, a pharmaceutical manufacturing company, plans to increase its capital to acquire 100% of the equity of aola shares, which has been approved by the board of directors. the transaction target aola shares belongs to the semiconductor industry and is a high-performance analog circuit chip design company. for example, guolian securities acquired 100% of the equity of minsheng securities through a horizontal integration.

it is worth mentioning that the merger and acquisition wave in the securities industry is accelerating. this phenomenon is particularly evident this year. guotai junan absorbed and merged haitong securities to build a securities aircraft carrier. this is the first merger and reorganization of a leading securities firm since the implementation of the new "nine national policies". it can be said that the merger and reorganization of the two giants will push the merger and reorganization to a climax.

in november 2023, the china securities regulatory commission proposed that it would support leading securities companies to become better and stronger through business innovation, group operations, mergers and acquisitions, and restructuring, to build first-class investment banks, and play an important role as the main force in serving the real economy and as the ballast for maintaining financial stability.

in terms of the industries to which the participants belong,high-end manufacturing, pharmaceutical and biological, computer and other industries are the "big players" in mergers and acquisitions and restructuring.since 2022, companies in the machinery and equipment industry have been keen on mergers and acquisitions, with 12 and 16 companies participating in mergers and acquisitions in 2022 and 2023 respectively. since the beginning of this year, 7 companies have participated in mergers and acquisitions, including daye, kraus, and baota industry. in addition, there are 7 companies in the automotive industry, 5 pharmaceutical and biological companies, and 4 companies in the computer, power equipment, and transportation industries.

the financial data of the listed company of the bidder is better

in mergers and acquisitions, the transferor usually refers to the party that sells assets or equity. the transferor may sell for a variety of reasons, including adjusting business structure, optimizing asset allocation, raising funds, or because the business no longer meets the company's long-term strategic goals, in order to divest inefficient assets to "cut off arms to survive." the bidder seeks to expand its business scale, enter new markets, acquire new technologies, and increase market share by purchasing assets or equity. the bidder may be a company in the same industry or an investor from a different industry. their goal is to achieve their own growth and expansion through mergers and acquisitions.

before selling or bidding, listed companies will conduct a comprehensive assessment of their financial situation. taking the bidder as an example, from historical experience, companies with relatively healthy financial conditions and relatively abundant monetary funds are usually more capable and advantageous in mergers and acquisitions. after analyzing major a-share restructuring events (completed) since 2019, the reporter found thatcompared with the transferor, the bidder has a better net profit growth rate and cash-to-current asset ratio (cash-to-current assets).

in terms of company size, the average current assets of the bidding listed companies in the year before the first disclosure (t-1, t represents the year of first disclosure, the same below) were close to 9 billion yuan, while the average current assets of the transferor listed companies during the same period exceeded 25 billion yuan. the current assets of the bidding listed companies are relatively low, which is in line with their needs to expand their business scale.

in terms of growth, affected by the asset scale, the net profit level of the bidder listed companies is relatively low, averaging 577 million yuan in t-1, an increase of nearly 12% year-on-year, while the net profit of the transferor listed companies fell by 10% in the same period. in terms of cash situation, the bidder listed companies had an average of 2.547 billion yuan in cash in t-1, with a cash flow asset ratio of 34.02%; the transferor listed companies had an average of 5.828 billion yuan in cash in t-1, with a cash flow asset ratio of 27.37%.

according to the company attributes, from the perspective of state-owned enterprises, the current asset ratio of the bidder and the transferor is not much different, but the net profit growth rate of the bidder's local state-owned enterprise listed companies is relatively high, reaching 18%, while the net profit of the transferor declined slightly during the same period; among central state-owned enterprises, the net profit of the bidder's listed companies declined slightly. from the perspective of private enterprises, the average current asset ratio of the bidder and the transferor's listed companies in the t-1 year was 33.4% and 25.27% respectively; during the same period, the net profit of the bidder increased by nearly 15% year-on-year, while the net profit of the transferor was in an average loss state.

take yingfangwei as an example. in 2014, the company successfully went public by acquiring sunyuan industrial. in 2020, the company sold 100% of the equity and debt assets of daikun technology as the transferor. at the same time, as a bidder, it planned to purchase the equity of huaxinke and world style. at that time, the company had suffered losses for three consecutive years (2017 to 2019). as of the end of 2019, the company had less than 9 million yuan in cash on its account. since then, the transaction targets huaxinke and world style have helped the company out of trouble and helped yingfangwei turn losses into profits. in 2023, the company once again planned an asset reorganization and initiated the acquisition of the remaining equity of huaxinke and world style. as of the end of 2022, the company's cash and cash equivalents were close to 14 million yuan, and its net profit increased by more than 360% year-on-year.

positive expectations for mergers and acquisitions and restructuring stimulate stock price increases

from the perspective of the secondary market, the stock prices of companies involved in mergers and acquisitions and restructuring have performed well before and after the first disclosure of the merger announcement and after the latest disclosure of progress.

for companies that have completed mergers and acquisitions since 2019, from 3 days before the first disclosure to the first disclosure day, the average share price of participating companies rose by 2.68%, while the csi 300 index fell by 0.1% during the same period. the average share price of participating companies rose by nearly 3% in the first 5 days, while the csi 300 index fell by 0.13%. from the first disclosure day to the 3 days and 5 days after the first disclosure day, the average share price increase of related companies was close to 5%, while the average increase of the csi 300 index was less than 0.5%. from the latest disclosure day to the 3 days and 5 days after the first disclosure day, the average increase of related companies was within 2%, still outperforming the csi 300 index.

it is worth mentioning that after the completion of the merger and acquisition (latest disclosure date),the excess returns of related companies compared to the csi 300 index have declined significantly, and the stock price trend of companies has gradually become rational. after the merger and reorganization of some companies, the stock price has fallen.. taking datang telecom as an example, on june 9, 2021, the company first disclosed the matter of "datang telecom's subsidiary datang microelectronics introducing new strategic investors". in the following 5 days, the company's stock price increased by more than 29%. on november 12, 2021, the merger case was completed. the company disclosed the matter on the 18th. from november 18, 2021 to the next 3 days and 5 days, the company's stock price fell by 2.15% and 3.28% respectively. during the same period, the shanghai and shenzhen 300 index was on the rise.

the fact that these companies are highly sought after by investors reflects the market's positive expectations for their future development potential. mergers and acquisitions are seen as an effective means for companies to achieve rapid growth and enhance their competitiveness. therefore, companies that can achieve their strategic goals through mergers and acquisitions can often gain higher valuations and investor attention in the secondary market.

some mergers and acquisitions and restructuring companies are released

with the continuous strengthening of policies, more companies will participate in mergers and acquisitions in the future. according to the announcements of "planning major restructuring" or "change of actual controllers" issued by listed companies (excluding companies that announced restructuring progress during the year, and only one listed company's information was collected for the same matter), 26 companies expected to be involved in mergers and acquisitions were sorted out, of which as many as 21 were state-owned enterprises.

except for the three companies in the non-bank financial sector, the remaining 23 companies will have relatively sufficient cash and cash equivalents at the end of 2023, with an average cash and cash equivalents ratio exceeding 31%.xiyu tourism, shuifa gas, salt lake sharesthe cash and cash equivalents ratio of 5 companies exceeds 50%. the current controlling shareholder of xiyu tourism is tianchi holdings, and the actual controller is fuqiang municipal finance bureau. after future changes, the state-owned assets supervision and administration commission of the xinjiang uygur autonomous region will become the new actual controller. the net profit in 2023 will increase by more than 12 times, and the asset-liability ratio will be less than 10% at the end of 2023, and the finances are relatively healthy.

the state-owned enterprise china shipbuilding plans to absorb and merge china heavy industry. the company has ample cash on its account, close to 68 billion yuan, and its net profit in 2023 will increase by more than 16 times.

local state-owned enterprisesshaanxi coal industryit plans to acquire all the shares of shaanxi coal and electric power group co., ltd. to create an integrated coal-electricity operation model.

public enterpriseschangdian technologypreviously, there was no actual controller. the company is the largest semiconductor packaging and testing giant in my country and the third largest in the world. after the completion of the share transfer and the reorganization of the board of directors of changdian technology, the controlling shareholder of changdian technology will be changed to panshi hong kong or its affiliates, and the actual controller will be changed to china resources.