What is the stock exchange?
Under the provisions of Article 42 of the Securities Law 2019 regulating the organization of the securities trading market, the stock exchange and its subsidiaries are the units that organize securities trading and trading activities. Provides stock market information.
Therefore, the Stock Exchange and its subsidiaries are often known as “stock exchanges”. Thus, the stock exchange here is the stock exchange.
Currently, there are two major stock exchanges:
- Hanoi Stock Exchange (HNX);
- Ho Chi Minh City Stock Exchange (HOSE).
According to Clause 1, Article 42 of the Law on Securities 2019, the Vietnam Stock Exchange and its subsidiaries may organize a securities trading market for securities eligible for listing; securities of state enterprises, one-member limited liability companies in which 100% charter capital is held by state enterprises, converted into joint-stock companies; securities of other enterprises not yet eligible for listing; securities of innovative start-ups; derivative securities and other securities according to the Governments regulations.
It can be understood simply that the company that wants to offer securities to the public must be listed on the exchanges.
To be listed on these exchanges, the company must meet the conditions for the initial public offering of securities by the provisions of the Securities Law.
Thus, listing on the stock exchange is a form in which a company first issues securities to the public after being allowed and organized by the stock exchanges (stock exchanges).
What are the conditions for listing on the stock exchange?
Accordingly, it is necessary to meet the following conditions for the initial offering of shares:
- The amount of charter capital contributed at the time of registration of the offering is from VND 30 billion or more calculated according to the value recorded in the accounting books;
- Business operations of 02 consecutive years preceding the year of registration of the offering must be profitable and at the same time have no accumulated loss by the year of registration of the offering;
- Having a plan for issuance and a plan for using capital obtained from the offering of shares approved by the General Meeting of Shareholders;
- At least 15% of the voting shares of the issuer must be sold to at least 100 investors who are not major shareholders; in case the charter capital of the issuer is VND 1,000 billion or more, the minimum ratio is 10% of the voting shares of the issuer;
- Major shareholders before the time of the initial public offering of shares must commit to jointly hold at least 20% of the charter capital of the issuer for at least 01 year from the closing date. the offering;
- The issuer is not being examined for penal liability or has been convicted of one of the crimes of infringing upon the economic management order but has not yet been cleared of the criminal record;
- Having a securities company to advise on the application for registration of a public offering of shares, unless the issuer is a securities company;
- Committing and having to list or register for trading of shares on the securities trading system after the end of the offering;
- The issuer must open an escrow account to receive money to buy shares of the offering.
This is a general condition for a company to offer shares on the stock exchange. Depending on each stock exchange, there will be additional conditions.
Purpose of determining business value
Valuation is derived from the objective need to determine the value of the property, helping the parties involved in the transaction can agree with each other on the asset price, helping the property transactions to be successful, and ensuring the security of the property. ensure the legitimate interests of the parties. Therefore, valuation plays a particularly important and indispensable role in the market economy, serving many purposes for stakeholders such as State agencies, businesses, organizations, and individuals.
- Issuance of shares; Selling shares to the public;
- Proof of financial capacity;
- Business reform, improve business efficiency
- Serving for equitization, joint venture, and capital contribution;
- Purchase, sale, merger (M&A), consolidation, or division of businesses, attracting investment capital
- Reference market value;
- Other purposes as prescribed by law.
Enterprise valuation method
According to the Vietnam Valuation Standard No. 12 (TDGVN 12), there are guidelines on the approach and methods of enterprise valuation. In which the approach in business valuation includes: an approach from the market, an approach from cost, and an approach from income. Appraisers and appraisers can use all sorts of approaches to business valuation. Each of these approaches includes different valuation methods, which in aggregate include the following main methods:
Average ratio method
Transaction pricing method.
The property method
The firms free cash flow discount method
Discounted dividend stream method
Discounted method of net cash flow to equity
COST OF BUSINESS ASSESSMENT
Enterprise valuation costs are usually determined by appraisal units based on % (percent) of total assets of the Enterprise and the type of business. The second way to calculate the business appraisal fee is a fixed rate (package) agreed between the appraiser and the customer.
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