| Formerly,on account of the limitations of red chip structure,a series of complex procedures,including but not limited to privatization,demerger and domestic re-relisting,is needed for red chip enterprises seeking to re-enter the domestic A-share market.The above capital operations is not only time-consuming,but also likely to fail.Therefore,seeking a more efficient and compliant way to return has been a close concern for red chip companies.The implementation of the registration system reform and the introduction of the STAR Market have opened up a fresh avenue for the re-entry of red-chip companies,i.e.,through the issuance of shares or depositary receipts for listing.As of February 10,2023,six technology red-chip companies have been successfully listed on the STAR Market.In addition,as the global economy rapidly transforms and information technology advances,the semiconductor industry has developed into one of the key industries for China to achieve modernization.The new path of return without dismantling the structure under the registration system is conducive to attracting high-quality red-chip enterprises in the semiconductor field to land on A-shares and guiding domestic capital to help the healthy development of enterprises.Based on the above background,this paper takes Galaxy Core,the first private red-chip company to land on the STAR Market in 2021,as the research object to analyze its return motive,path and economic effect of return.Firstly,this paper conducts a comprehensive review on relevant literature to provide basis for further work.Secondly,this paper compares the institutional evolution of the return of red chips,summarizes the traditional and new paths of return and makes a statistical analysis of the current situation.Thirdly,the paper introduces Galaxy Core’s corporate and industry situation and its listing process,and analyzes the reasons why Galaxy Core chose to retain the red-chip structure for listing on the A-share market from both internal and external factors.At last,the economic ramifications of Galaxy Core’s listing are evaluated through four distinct dimensions: market reactions,financing performance,operational efficacy and innovation ability.Upon investigating the case of Galaxy Core,which utilized the novel path to enter the A-share market,this research yields the subsequent findings:(1)Under the context of the registration system,the return path for red-chip enterprises has been broadened,effectively mitigating the risks associated with dismantling the red-chip framework.The inclusive and innovative regulatory measures adopted by domestic authorities will serve as significant driving forces for the re-entry of red-chip enterprises into the A-share market.;(2)In the context of overseas market undervaluation and stricter regulation,coupled with the ongoing liberalization of domestic red-chip enterprise return policies and increasing support for the semiconductor industry,Galaxy Core chose to list on the Science and Technology Innovation Board with its red-chip structure.This decision aims to secure adequate financing,establish in-house wafer production lines,and foster a more efficient endogenous product development model,ultimately enhancing the company’s research and development capabilities.(3)Galaxy Core has chosen a more suitable path to go public,the scale of financing is in the forefront of the industry,and the strategic placement of a large national fund has been introduced,the financing channels have been expanded and the financing structure has been improved.However,due to the macro fluctuations of the industry and the fact that the fund-raising projects have not yet released their capacity,the company’s operation,profitability,investment research and other indicators after listing are not satisfactory,and the effect of listing needs to be further studied over time.Finally,based on the case study of Galaxy Core,corresponding insightful suggestions are made. |
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