You may still remember when we introduced the New Third Board in September 2014，The market-making system has just begun，There are only more than 1,000 listed companies，The transaction volume is also very small。More than half a year later，New OTC Market has burst into the eyes of entrepreneurs with a booming attitude，There is even talk that now is an opportunity that cannot be missed。So is the New OTC Market a good capital platform?？NEEQ Listing、Market Making、Directed additional issuance、Market Value Management、What is the value behind VIE structure demolition etc.？Full of useful information，Let you understand all the secrets of the New Third Board in ten minutes！

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1. 1. What are the requirements for listing on the New OTC Market?

2. 2. What are the functions of the New OTC Market?

3. 3. What is the use of listing on the New OTC Market?

4. 4. What are the shortcomings of the New OTC Market?

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Xiao Ming’s career

Xiao Ming is an Internet project entrepreneur，Established Tomorrow Company with my friend Xiaohong，Victory along the way，Received angel investment，And established a VIE structure to obtain Series A investment from a well-known US dollar fund。To motivate employees，Tomorrow the company has also set up an employee option incentive plan (ESOP)。The company’s equity structure is as follows:

Tomorrow Company was established in May 2013，Currently the product has a large number of users，RMB 2 per year,0 million yuan in income，But the company is losing money。Based on the nature of the company’s business，ICP license has been obtained。

First News New Third Board

-NEEQ listing requirements

Xiao Ming knows，I used to want to go public in China，Can access the motherboard、Small and medium-sized board、GEM，But these sectors are required to be profitable，According to tomorrow’s company’s business，三、It is difficult to make a profit within five years，So Xiao Ming chose to raise money from the US dollar fund，Built the VIE structure，I want to 188bet app be listed on NASDAQ。But now the New OTC Market has suddenly become popular，And it is said that there are no requirements，Xiao Ming is a little excited。After research，Xiao Ming finally figured out the motherboard、Small and medium-sized board、GEM、What are the requirements for listing on the New Third Board。

The company is listed on the New Third Board，Not limited to high-tech enterprises；But there is no financial threshold，But there is no financial threshold；For the enterprise’s industry (real estate development、Except government platform companies)、There are no restrictions on the nature and size of the enterprise；Listing review takes information disclosure as the core，Do not make judgments on corporate profitability and prospects，Highlight “controllable、Evidence available、Principle of "identifiable"。At the same time，Need to be recommended by a securities firm and continue to supervise。

After consulting experts，Xiao Ming noticed a small detail，Continuous operation required by the above standards for more than 2 years，refers to the need for 2 complete fiscal years。Tomorrow Company was established in May 2013，It will not be listed in May 2015，But after 2014、After two full years in 2015，That is, it can only be listed in 2016。But it doesn’t matter，You can prepare first，Wait until everything is ready，It’s only been 2 years，Xiao Ming is full of confidence。

-The temptation of the New OTC Market

Although it meets the listing requirements of the New Third Board，Xiao Ming still has a little knot in his heart，New OTC Market Pilot in 2006，Expansion in 2013，Xiao Ming, who was ambitious at the time, did not take it seriously。Now，Although the New Third Board is popular，But it’s listed there，Is it reliable?？

As CEO，Xiao Ming’s learning ability is not guaranteed，I quickly understood how popular the New OTC Market is。

Tips

A. What is the New OTC Market?

NEEQ is a national securities trading place，Mainly innovative、Entrepreneurial、Development services for growing small, medium and micro enterprises。About its positioning and other details，You can take a look at Sinovation Ventures’ introduction in September last year。The official name of the New Third Board is the National Equities Exchange and Quotations，We sometimes refer to it as the stock transfer system below。

B. Market size of the New OTC Market

The number of companies listed on the New OTC Market has 188bet app download exploded since 2014，As of the end of April 2015，The number of listings has reached more than 2,300，It is expected that a total of 13,000 companies may be listed in the next five years。The transaction scale also expanded sharply，Monthly Transaction 1 from March 2014.2.6 billion yuan，Highest 220 as of March 2015.0.2 billion yuan，Increase of 174.61 times。[Introduction from Huarong Securities] From the perspective of industry distribution，Information technology accounts for 32%，Reached 698，Industry accounts for 31%，Reached 688。At the same time，The proportion of these two industries is still rising。[Introduction from CITIC Securities] It seems that there is still a market for Internet companies in the New OTC Market！

C. Financing function of New OTC Market

The financing function of the New OTC Market is also constantly showing，From 2012 to March 31, 2015，The National Equities Exchange and Quotations System has completed a total of 629 stock issuances，Raised funds 179.3.8 billion yuan。Only 24 stock issuances were completed in 2012，Raised funds 8.5.5 billion yuan；In 2014, 329 stock issuances and capital increases were completed，Raised funds 132.0.9 billion yuan。[Introduction from Huarong Securities]

Also，After listing on the New Third Board，Except private placement，Enterprises can also use such a capital platform，Pass credit rating、Equity pledge using market-based pricing，To obtain a bank loan。At the same time，Enterprises can also use corporate bonds、Convertible bonds、Financing through small and medium-sized enterprise bonds and other methods。This greatly expands the channels for corporate financing。

2014，The total number of NEEQ cooperative banks reaches 27，Loans to listed companies exceed 43 billion yuan，Among them, listed companies completed 130 equity pledge loans，Financing 18.9.3 billion yuan。[Introduction from Huarong Securities]

D. Market valuation of the New OTC Market

While the scale of financing continues to expand，The price-to-earnings ratio of the New OTC Market is also growing，Laid the foundation for the enterprise at the right price。

(Note: The above data are as of April 30, 2015 [quoted from the introduction of CITIC Securities])

You may have noticed，The NEEQ P/E ratio also distinguishes the overall P/E ratio、agreed transfer price-earnings ratio、Three types of market-making P/E ratios，The mysterious market making system is 188bet Online Sports Betting and Casino involved here again，About the market making system，We will talk about it later。No matter what，Now the valuation of enterprises under the market making transactions of the New Third Board has exceeded that of the small and medium-sized boards，Close to GEM。This is also a big temptation。

-The significance of listing on the New Third Board

With the rapid rise of the New Third Board，Xiao Ming noticed，In addition to realizing some listing functions，It’s unique、Innovative system design，Also suitable for startups。

A. Lower listing cost and high efficiency

As mentioned before，New OTC listing standards are very simple and the listing procedures are simple、Short time for stock transfer system review with less than 200 shareholders，Audit by the China Securities Regulatory Commission for more than 200 people，There is no need to queue up before the review committee，Simple procedure。General specifications、share reform、The total time required for listing is about 6 months

Low listing cost

The cost is generally 1 million to 2 million yuan，And can obtain government financial assistance。Many securities firms are also very willing for companies to exchange equity for listing fees，Get investment income，The company can also solve the problem of short-term capital shortage。

Convenient and flexible financing

NEEQ has many innovative systems，For example, private placement，Can be filed once、Additional issuance in stages；At the same time，The review time for each private placement is very short，Can also be short、frequency、Quick on-demand financing。

Quick channel to enter the motherboard market

As part of the multi-level capital market，The "New Third Board" has the functional positioning to connect with the GEM market，Is the green channel to a higher level of capital market。Of course，Although the China Securities Regulatory Commission has issued a document allowing unprofitable Internet and technological innovation companies to be listed on the GEM after being listed on the New Third Board for 12 months，But it has not been implemented yet。

B. Can realize certain basic functions of listing

If the market performs well after listing，You will have the opportunity to establish a good brand image，It’s also a good advertisement。

Help the company standardize management

At the securities firm during the company’s listing process、Law Firm、With the intervention of professional 188bet sports betting app download intermediaries such as accounting firms，Enterprises can initially establish a modern corporate governance and management mechanism；After listing, the operation will be standardized under the continuous supervision of the sponsoring securities firm and the supervision of the China Securities Regulatory Commission and the National Equities Exchange and Quotations。Can effectively improve standardization，Promote the sustainable and healthy development of enterprises。

Discover business valuation

By agreement、Market Making Transaction，Pricing the enterprise，Conducive to future additional issuance at reasonable prices、Mergers and Acquisitions。At the same time，Listed and displayed on the New Third Board，It is also easier to be discovered and acquired by powerful large companies。

Enhance liquidity

The shares of listed companies can be freely circulated on the New Third Board，Thus enabling the company to obtain a liquidity premium，is a shareholder of the company、Employees bring greater value。

Improve financing capabilities

Realize equity and debt financing，After the company is listed, it can be based on business development needs，Direct financing to specific objects；Bond Financing，Quoted companies can purchase corporate bonds in the national over-the-counter market、Convertible bonds、Debt financing for small and medium-sized enterprises through private placement bonds and other methods；Lower cost bank loans，The company’s equity valuation increased significantly after listing，The bank’s awareness and importance of the company will also be significantly improved，It will be easier to obtain commercial bank loans at lower interest rates，Financial institutions more recognize the market value of equity，And then obtain financing facilities such as share mortgage loans。

-Currently existing problems on the New Third Board

Thousands of good things，Xiao Ming also rationally sees the current problems of the New Third Board:

At present, the transactions of companies listed on the New OTC Market are only agreement transactions and market-making transactions；

New OTC investors also have certain thresholds，Limited total number，These have greatly affected the trading activity。Although，Collective bidding transactions may be launched in the future，And lower the threshold for investors，But not yet determined；

Shanghai、Shenzhen Exchange competes for project resources，188bet app Everyone has taken measures，It is said that the Shenzhen Stock Exchange’s GEM standards will be adjusted，The Shanghai Stock Exchange will also launch an emerging board with lower threshold，These all constitute competition for the New Third Board；

The market is currently active，But investors’ understanding of Internet companies is still relatively superficial，The valuation system has not yet been established，The current booming status is largely due to the overall activity of the capital market and favorable policies，Whether it can be maintained for a long time is still a question。

Investment entity:

Institutional investors: legal entities with registered capital of more than 5 million yuan；Partnerships with a total paid-in capital contribution of more than 5 million yuan。

Natural person investor: securities assets with a market value of more than 5 million yuan；With more than two years of securities investment experience，Or have accountant、Finance、Investment、Finance and other related industry background or training experience。

Other investors: collective trust plan、Securities Investment Fund、Bank financial products、Securities Company Asset Management Plan，As well as other financial products and other assets recognized by financial institutions or relevant regulatory authorities。