| * In 1998, seven listed companies began the trial issue of Seasoned Public Offering (SPO). By December 30, 2000, 24 listed companies have begun to issue stock A. More and more Chinese listed companies have adopted SPO as a means of refinancing, which greatly impacts Chinese stock market. * As SPO broke through the limitation of Rights Offering in terms of objectives, quantity, amount, condition, etc., it gradually becomes the major channel of re-financing for the listed companies in China. SPO not only functions as a means of capital increase for listed companies but also plays an important role in controlling resource flow in stock market. SPO, an inevitable choice for listed companies in China, marks that Chinese enterprises have become in line with the world with respect to capital operation mode.* Compared to Initial Public Offering (IPO) and Rights Offering, SPO is more initiative in Chinese stock market and tends to adopt more market principles. As far as Chinese stock market is concerned, SPO is an originality innovation of Investment Banking and reflects the fact that Investment Banks in China are oriented to the market and become more in line with the international conventions. * The price making of SPO is an technological innovation of investment banking. SPO is related to the interests of the listed companies, new shareholders, existing shareholders and the underwriters, and therefore, how to coordinate the interests of the above-mentioned four parties is the key to the success of SPO. Various coordinating plans lead to different price making patterns of Stock A. Price making is essential to SPO planning. From the Price-to-Earning Ratio (PER) pattern to the pattern based on discounted price, and the aggregated bid inquiry pattern, SPO 's price making becomes more and more market-oriented. * The underwriting of SPO reflects the innovation about the contents of investment banking in China. Road Show and Financial Public Relations Company come into being to further propagate the investment value of the issuer. Inquiry system, which is widely adopted abroad has been introduced in order to carry out more scientific determination of SPO amount. In addition, the on-line return system between institutional investor and individual investor has been established. In order to ensure the benefit of original shareholders and new shareholders, SPO has abandoned the method of regarding Rights Offering as divide rights. And in order to subdue market risk more efficiently, the underwriter have started the exploratory application of many techniques such as "Green Shoe Right", "Prior Placement Rights", etc. All these measures have brought Chinese investment banking more in line with international market. * SPO is the innovation of Chinese investment banking. To make it more market-oriented in Chinese stock market will exert positive effect on the development of Chinese investment banking. To finance through SPO establishes a significant reference for the listed companies on Growth Enterprise Market (GEM) that is to be set up in China soon. In addition, the GEM will improve the SPO. And as the GEM becomes more market-oriented, it is more suitable for SPO compared to the main board. The SPO in GEM tends to be more market-oriented. In the future, Shelf Registration, Secondary Combined Offerings, etc. can be introduced into investment banking as well as to IPO, which will surely make SPO more market-oriented. |
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