Source: Chengdu Daily

Journalist: Liu Taishan

Following the 100 A-share listed companies, Chengdu-based companies have continued to make their way into the capital market. In 2022, Jiayuan Technology Co., Ltd. and KSW Technologies Co., Ltd. were listed, and AVIC UAV and Lihang Technology Co., Ltd. applied for IPO and were approved.

Besides the increasing number of listed companies, there has been much more news worth mentioning. This week, Tongwei Co., Ltd. and Bank of Chengdu successively issued announcements on the issuance of convertible bonds, with their total issuance amount reaching RMB 20 billion. It is particularly worth mentioning that Tongwei Co., Ltd. issued RMB 12 billion of convertible bonds, hitting an all-time high in Sichuan. Is it a straw in the wind that the two Chengdu-based leading listed companies are refinancing? From "quantity increase" to "quality improvement", how will Chengdu-based listed companies take advantage of this opportunity in the future?

Garden factory of Yongxiang Co., Ltd.

Bringing in investment

A number of Chengdu-based listed companies are engaging in debt financing

Yesterday, Bank of Chengdu announced that it is planning to publicly issue convertible corporate bonds, with the total amount of funds raised this time reaching RMB 8 billion. With 80,000,000 bonds to be issued, the initial conversion price is RMB 14.530 per share.

Coincidentally, Tongwei Co., Ltd. issued RMB 12 billion of convertible bonds last Thursday. According to the announcement, the term of convertible bonds is 72 months, from February 24, 2022 to February 24, 2028. The amount hits an all-time high among Chengdu-based listed companies.

Tongwei Fishery-PV-Integrated Eco-park in Dongying

Then, what are convertible bonds? A person in charge at a listed company told the journalist: "Convertible bonds are a good financing tool, and a kind of hybrid securities with the attributes of both 'shares' and 'debts'. For businesses, convertible bonds are conducive to reducing financial costs and improving economic benefits. For investors, they serve as an investment target which can be used to both 'attack and defend'. If you are optimistic about the company's development prospects, you can convert convertible bonds into stocks. If you are cautious about the development of the company, you can continue to hold the convertible bonds and collect interest. In the interview, the journalist learned that as far as debt financing is concerned, listed companies must, first of all, have a strong ability of solvency and a good credit record.

In fact, debt financing is becoming another important channel for listed companies to refinance. In November 2021, New Hope issued RMB 8.15 billion of convertible bonds. According to relevant data, since 2021, a total of 159 A-share listed companies have issued their convertible bond issuance plans, and the investor structure has become increasingly diversified. Obviously, convertible bonds are becoming an important investment variety in the securities market. Besides convertible bonds, Kelun Pharmaceutical Co., Ltd. and Sichuan Road & Bridge Co., Ltd. have also successively issued ultra-short-term financing bonds.