Dr. Kon­rad Bösl: Chi­na IPOs

Eco­no­mic and legal ana­ly­sis of Chi­ne­se issu­ers in Ger­ma­ny
BLÄTTCHEN & PARTNER AG pres­ents eco­no­mic and legal ana­ly­sis of Chi­ne­se issu­ers in Ger­ma­ny

  • No attrac­ti­ve Chi­ne­se com­pa­nies are lis­ted on the stock exchan­ge in Ger­ma­ny
  • All New Chi­ne­se issu­es have mas­si­ve pri­ce los­ses (-69.4 )
  • The last 15 new issu­es could not be ful­ly pla­ced
  • Lack of liqui­di­ty in the share
  • At Group level, part­ly irra­tio­nal liqui­di­ty hol­dings
  • The Exe­cu­ti­ve Board and Super­vi­so­ry Board do not ful­fil their legal obli­ga­ti­ons ade­qua­te­ly

Munich | Stutt­gart | Zurich, Novem­ber 2014. BLÄTTCHEN & PARTNER AG, one of the lea­ding cor­po­ra­te finan­ce con­sul­tants, has sub­jec­ted the Chi­na IPOs in Ger­ma­ny to a cri­ti­cal ana­ly­sis for the third time. The cur­rent stu­dy (as of 31 Octo­ber 2014) sheds light on Chi­ne­se issu­ers from an eco­no­mic and legal point of view. It also addres­ses spe­ci­fic fea­tures that have not yet been con­si­de­red, or only mar­gi­nal­ly.

Deut­sche Bör­se AG has worked hard for several years to per­sua­de Chi­ne­se com­pa­nies to go public in Ger­ma­ny. The­se efforts have now been dis­con­ti­nued, not least becau­se of poor pri­ce per­for­mance and incre­a­sing accoun­ting irre­gu­la­ri­ties and even fraud. Alrea­dy almost cha­rac­te­ris­tic of Chi­ne­se issu­ers are: lack of trans­pa­ren­cy in busi­ness models and busi­ness deve­lo­p­ment, poor com­mu­ni­ca­ti­on with the finan­cial public and lack of liqui­di­ty in the stock. As a result, main­ly pri­va­te inves­tors enga­ge with Chi­ne­se issu­ers. As a result of the cata­stro­phic pri­ce deve­lo­p­ment, Chi­ne­se issu­ers have beco­me the big­gest des­troy­ers on the stock mar­ket. Pri­va­te inves­tors are the losers.

The lis­ted Ger­man AG is often only a let­ter­box com­pa­ny without its own employees. Com­mu­ni­ca­ti­on bet­ween the Exe­cu­ti­ve Board and the Super­vi­so­ry Board is extre­me­ly dif­fi­cult due to lan­guage bar­ri­ers. Both insti­tu­ti­ons are the­re­fo­re unab­le to ful­fil their legal obli­ga­ti­ons reli­ab­ly. This can lead to signi­fi­cant lia­bi­li­ty risks.

The sharp decli­ne in pla­ce­ment rates shows that inves­tors are laging at a distance from Chi­ne­se new issu­es. Thus, the last 15 new issu­es could only be pla­ced incom­ple­te­ly. In some cases, the cost of emis­si­ons was even hig­her than the volu­me of emis­si­ons.

“In light of the stu­dy results, it is more than asto­nis­hing that four unknown Chi­ne­se com­pa­nies have gone public again in Ger­ma­ny this year. The reac­tion on the capi­tal mar­ket to this was clear. Nevertheless, I fear that weak Chi­ne­se com­pa­nies in Ger­ma­ny will con­ti­nue to be reck­less­ly pushed onto the stock mar­ket by secu­ri­ties tra­ding banks in the future,” says Dr. Kon­rad Bösl, CEO of BLÄTTCHEN & PARTNER AG.

About BLÄTTCHEN & PARTNER AG

With its inno­va­ti­ve finan­cial stra­te­gies, BLÄTTCHEN & PARTNER AG has been one of the lea­ding cor­po­ra­te finan­ce experts for almost 30 years. With offices in Munich, Stutt­gart and Zurich, the com­pa­ny spe­cia­li­zes in advi­sing on IPOs, bond issu­es, cor­po­ra­te invest­ments and M&A tran­sac­tions, as well as manage­ment par­ti­ci­pa­ti­on pro­grams and exe­cu­ti­ve com­pen­sa­ti­on. More than 300 tran­sac­tions are a tes­ta­ment to the company’s pro­ven exper­ti­se. The gro­wing inter­di­sci­pli­na­ry com­pe­tence net­work, the high level of cus­to­mer satis­fac­tion and the lar­ge num­ber of publi­ca­ti­ons on important finan­cing issu­es reflect the reco­gnis­ed repu­ta­ti­on of BLÄTTCHEN & PARTNER AG.

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