New Opportunities and Challenges for Instrument Firms Listing on GEM

Since the first batch of 28 GEM companies were formally listed on October 30, 2009, the China Growth Enterprise Market has weathered the precarious years and has quickly become one of the most active GEM markets in the world. For investors in the instrumentation industry, this market is also full of unlimited opportunities and unknown variables.

Instrument Industry GEM IPO Approach

Recently, while foreign instrument giants have stirred up frenzy of mergers and acquisitions, the domestic instrument industry and the analytical and inspection industry are not calm, and they have carried out a variety of capital operations: obtaining venture capital, small and medium-sized boards, and listing on the Growth Enterprise Market. On November 16, the news of the application of Jiangsu Tianrui Instrument Co., Ltd., the leading domestic optical spectrum analyzer, went on the market. It was officially accepted by the China Securities Regulatory Commission's GEM issuance review committee, and the instrument industry’s attention to the listing of the GEM. Also gradually warming up.

As an international high-tech enterprise specializing in the research, development, production and sales of three series of analytical instruments for spectroscopy, chromatography and mass spectrometry, it has been preparing for the listing since its completion in December 2008. In 2009 before the company's listing, Tianrui Instrument attracted four venture capital companies during the capital increase process. Industry insiders conservatively estimate that these four venture capital companies invest in Tianrui Instruments with a yield of 5-7 times.

Listing is both an opportunity and a challenge for the development of any company and the entire industry. In fact, after the company has formed a certain scale, it needs a lot of money to grow and expand. It is a good choice to get venture capital and go public. It is no exception for China's instrument companies. In particular, with the first full year of the GEM still being buoyed by the market, listing of domestic instrument companies is no longer a dream. Are you planning and preparing for listing?

What are the advantages of companies listed on the GEM?

1. Establishing a platform for direct financing for independent innovation enterprises and other growth-oriented start-up companies, which will help increase the proportion of the company’s own capital, improve the company’s capital structure, improve the company’s ability to resist risks, and enhance the company’s development potential.

2. It is conducive to the establishment of a modern enterprise system, the standardization of corporate governance structure, the improvement of corporate management, the reduction of operational risks, and the enhancement of entrepreneurial and innovative power.

3, is conducive to companies establish a brand, improve corporate image, more effective market development.

4. It is conducive to capital operations such as asset mergers and reorganizations.

Is there also a risk with GEM listing?

1, the secondary market point of view, most of the stocks of the GEM are new topics, wearing high-tech, high-growth aura, and the smaller share capital, more likely to be eyeing on the concept of hot money, fierce speculation, resulting in serious stock price and company facts Divorce! Therefore, it is necessary for retail investors to know whether they have sufficient risk-taking ability before entering the market.

2. Starting from the company itself, because China's GEM is still at the beginning of its creation, the SFC will usually select some companies with mature business capabilities and operations for the sake of market stability. In fact, the company has been finalized, and the main business has been expanded. Space is not as big as the outside world has said. Therefore, many companies on the A-share GEM itself are not equal to the high growth stocks of the Nasdaq Model!

3. The greatest advantage of a company after listing is that it has an efficient financing channel. However, one must know that a company's growth lies in the continuous expansion of its scale, but the decline of one company is also due to the blind expansion of the scale.

The main purpose of GEM is to provide financing for emerging companies to help them develop and expand their businesses. Most of the companies listed on the Growth Enterprise Market are engaged in high-tech business and have high growth. However, they tend to be established for a shorter period of time, have smaller scales and perform better. The domestic instrument industry should seize the opportunity to accelerate the development of the enterprise itself and improve the competitiveness of the instrument products so that the company can become bigger and stronger!