Poor business performance
China stipulates that listed companies will be delisted for operating losses for three consecutive years. In order to preserve the listing qualification, once a listed company has been operating at a loss for years and cannot extricate itself from the predicament, the probability of successful shell purchase will increase. Take 1994 Hengtong's acquisition of Prism as an example. Due to the reorganization of Prism Company, its leading products, a variety of silicon products and timely glass products, were affected by the downturn of the whole industry, and the profit from its main business was very small, so it was listed as a small-cap third-tier stock in Shanghai. At this time, Hengtong is willing to contribute to buy 35. 5% of the shares of Prism became the largest shareholder of Prism, helping Prism to seek new development. This acquisition will benefit prism.
(B) poor prospects for the development of the industry
Industry is a sunset industry. After 20 years of rapid economic development, some industries that were originally in short supply have become saturated. These industries have passed the "golden stage" of their life cycle and entered a recession, and their profitability and growth space are getting smaller and smaller. Therefore, the whole national economy is facing the need of comprehensive innovation of industrial structure, and those industries that have shown fatigue at present especially need to transfer the assets stored in them to emerging industries. As a scarce resource, "shell" resources are of course facing the problem of industrial transfer. Therefore, China's highly saturated textile, machinery, machine tools and other industries, urban businesses with too dense shopping malls, ordinary building materials industries with overcapacity, and some university industries lacking marketing capabilities are all facing the problem of industrial transfer. Most of the restructuring sectors discussed in the market are distributed in the above industries, such as low-priced textile stocks in Shanghai and Shenzhen, machinery stocks such as Nantong Machine Tool, Yuhuan, etc.
Commercial stocks, such as shares, Nanyang Industrial and other industrial stocks in colleges and universities that have been poorly managed for a long time.
(3) Product features
The leading products and industries have no development prospects, the product life cycle is in the late stage of recession, and it cannot be updated, or the consumer preferences change, and the products are eliminated by the market, and there is no hope for restructuring. For example, some products in the home appliance industry and chemicals in the pharmaceutical industry.
(4) Characteristics of share capital
Listed companies with complex capital structure are more likely to succeed in mergers and acquisitions and have greater difficulty in subsequent operations, so it is generally difficult for such companies to become the targets of restructuring. The capital structure is simple and the acquisition obstacles are small. Smaller share capital will help the acquirer to raise funds and reduce the acquisition cost and risk. The equity structure of the ideal "shell" target company should be relatively dispersed, with the equity of the relative holding company accounting for less than 5% of the total share capital, or the equity of state-owned shares or legal person shares accounting for an absolute majority. The concentration of these shares makes it possible to obtain the controlling position of listed companies as long as the OTC agreement is successfully transferred.
(V) Scale characteristics
The stall is too big, involving too many industries, and the investment loss is serious, but it is not difficult to change the main business.
(VI) Debt characteristics
The debt burden of the enterprise is too heavy, and it will continue to lose money, but it will not go bankrupt.
(VII) Characteristics of stock prices
The stock price has been depressed for a long time. Generally speaking, when the market is looking for potential "shell" sources, most of them should consider the possible restructuring costs. However, most companies with long-term depressed stock prices have sluggish business, and the current management of the company can't show its talents in growth, so it is in a favorable position in the negotiations and can get the support of shareholders. After all, shareholders feel that the new forces involved in the company may change the company's operating conditions, which will be reflected in the stock price, and ultimately improve the return on investment of shareholders.
(VIII) The parent company is powerless.
Generally speaking, if the parent company of a listed company still has a certain strength, it will not allow external forces to intervene. Only when the parent company is unable to transfer assets to improve its book income will it welcome external forces to intervene. After all, the intervention of external forces also provides the parent company with a possibility to increase its income, at least, it also relieves the parent company of a burden.