NewConnect Market Research Articles

Role of digital marketing in enterprises from the NewConnect market in Poland

Role of digital marketing in enterprises from the NewConnect market in Poland

A New Approach to Underpricing Phenomenon in Poland

The purpose of the article/hypothesis. The purpose of the article is to identify and assess the underpricing of initial public offerings in Poland on the regulated and alternative markets, considering the division of total underpricing into primary underpricing and secondary underpricing. The study also takes into account different types of IPOs (cold, neutral and hot). Such an approach to measuring underpricing based on the data coming from both the regulated market of the Warsaw Stock Exchange and the alternative market – NewConnect, is pioneering on the Polish market.
 Methodology. The statistical analysis covers 271 companies debuting on the regulated market of the Warsaw Stock Exchange between 2005 and 2022 and 585 companies debuting on the alternative market between 2007 and 2022. Total underpricing was divided into primary underpricing and secondary underpricing. All IPOs were split into cold, hot, and neutral offerings according to the secondary underpricing. T-tests for estimating the significance of the rate of returns were conducted for both the regulated and alternative markets. The correlations were estimated using Pearson’s index.
 Results of the research. The results of the analysis show that in Poland, the IPO underpricing occurring on the primary market is significantly positive, representing the remuneration of subscribers for participating in the initial public offering. Moreover, it is higher for an IPO on the alternative market than on the regulated market. In contrast, returns calculated from opening prices to closing prices on the first day of trading are negative in both markets, with lower returns in the NewConnect market. The average primary underpricing for cold IPOs is higher than for hot IPOs for both the regulated and alternative markets. Average secondary underpricing is negative for cold IPOs and positive for hot IPOs on both the regulated market and NewConnect. Furthermore, there is a significant positive correlation between primary and total underpricing regardless the hotness of the IPOs and a positive significant correlation between primary and secondary underpricing occurs only for hot offers while for cold offers it is negative.

The NewConnect market as a source of raising funds for the SMEs

Motivation: The NweConnect market is intended for small, innovative and dynamically developing companies, especially in the so-called new economy. A debut on this market is one of the possible strategies for raising capital by a small and medium-sized entrepreneur. In times of economic downturn and limited supply of capital on the capital market, only the most credible have a chance to raise capital on the alternative market.Aim: recognition of the actual nature of companies listed on the alternative market in Poland, with particular emphasis on the voivodeships of Eastern Poland. It was assumed that mainly young, innovative and fast-growing companies are listed on the NewConnect market. The analysis was based on a review of domestic and foreign literature and on the estimated linear econometric model.Results: Most companies on the NewConnect market are not characterized by rapid development, short period of entering the market and a high level of innovation. There are also companies from industries where the level of innovation was not a key element of activity from the beginning. In addition, the changes that have taken place (i.e. from market entry to the current situation, 2007–2022) are not favourable. While at the beginning of their activity (since 2007) listed companies were characterized by a relatively high level of innovation, now (2022) this level is decreasing. This justifies the need for further research on the development of the NewConnect market as a source of financing for small and medium-sized enterprises.

The Culture of Purchasing Processes in Innovative Production Enterprises

The issue of purchasing processes has been analyzed and studied by scientists for several years, and especially the time of the pandemic has shown that activities in the area of procurement require more analysis and focus on creating new values or developing a culture of these processes in organizations.
 The COVID-19 pandemic caused the business world to undermine the reliability of the supply chain and showed that purchasing processes can be unstable. Purchasing functions faced demand-supply imbalances, which often lead to inventory issues, uncertain supply reliability, and high-risk relationships with various stakeholders, particularly suppliers and customers. Opaque supply chains and new realities require flexibility, a certain culture and maturity in sourcing functions to stay in business and succeed as a business in the new era. In order to build effective capabilities in purchasing processes and be able to flexibly respond to the challenges of the business environment, as well as meet the needs of stakeholders, enterprises must protect themselves with new norms, values and principles in this area.
 The article, in the theoretical part, describes the term of purchasing processes, presents elements that can be considered as the basis for building a culture of purchasing processes in innovative production enterprises. The research part describes the research methodology and the results of the conducted surveys as well as the conclusions resulting from the research. The research was conducted on a group of 36 managers who deal with this area in innovative production companies listed on the NewConnect market in Poland. The analysis of the literature and the results of the research showed that the prospects for the development of the purchasing process culture are significantly high. Especially this aspect has become quite important during the pandemic and companies are increasingly including these activities in key business processes.

Cena emisyjna w pierwszej ofercie publicznej a przyczyny wykluczenia spółki z NewConnect

The purpose of the article. The subject of this article is the analysis of the change in the share price on the day of the company's debut on the NewConnect market due to the reasons for its exclusion from trading. The analysis was carried out for all companies debuting on NewConnect in 2007–2020. The results are presented depending on the share issue price. The paper hypothesized that companies whose share issue price was incorrectly estimated, which means overvalued or undervalued IPO, are more often withdrawn from the NewConnect market. Methodology. The research was carried out using the analysis of source data. In the research process, the author used, in addition to the analysis of the literature, the method of observation. Results of the research. As a result of the research, it was found that 39.84% of companies that debuted on the NewConnect market in 2007–2020 were excluded from trading. 56.28% of the withdrawn companies were forcibly excluded. On the other hand, 108 companies were withdrawn from trading voluntarily, and the prevailing premise in this group of entities was the transfer of the company to the WSE Main Market. Voluntary reasons prevail among entities withdrawn from trading, whose shares had an issue price of PLN 5 and higher. On the other hand, in the group of "penny" companies, the main reason for delisting is the safety of trading and liquidation bankruptcy. An increase in the share price on the debut day was recorded in 69.64% of entities withdrawn from NewConnect. The adopted hypothesis was positively verified. Companies whose share issue price was not properly estimated were withdrawn from the NewConnect market more often than entities whose securities price did not change on the day of their debut. The level of withdrawn companies whose IPO was overvalued and undervalued is similar. The conducted research proves that among overvalued initial public offerings, the share of voluntary reasons for withdrawal prevails, while among undervalued ones there is a higher share of forcibly excluded entities. However, the amount of the issue price according to the ranges adopted in the study does not constitute a premise for the withdrawal of companies from the NewConnect market.

IPO Underpricing a wysokość ceny emisyjnej na rynku NewConnect

Przedmiot badań: W artykule podjęto tematykę spółek debiutujących na zorganizowanym rynku akcji, prowadzonym przez Giełdę Papierów Wartościowych S.A. poza rynkiem regulowanym w formie alternatywnego systemu obrotu, zwracając uwagę na kształtowanie się ceny emisyjnej akcji spółki w porównaniu z jej ceną na koniec pierwszego dnia notowania.
 Cel badawczy: Celem artykułu jest analiza zjawiska IPO Underpricing na rynku NewConnect w latach 2007–2020 w zależności od wysokości ceny emisyjnej akcji w dniu debiutu. Sprawdzono także, ile wynosiła średnia zmiana ceny papieru wartościowego oraz liczba spółek. Ponadto zwrócono uwagę na zmiany cen w dniu debiutu na NewConnect po wprowadzeniu regulacji dotyczących podwyższenia wartości nominalnej akcji do 0,10 zł.
 Metoda badawcza: W opracowaniu dokonano przeglądu literatury tematu, wykorzystano metodę dedukcji oraz posłużono się metodą obserwacji. Przeprowadzono analizę danych źródłowych oraz aktów prawnych dotyczących NewConnect. Zamieszczono statystyki opisowe dotyczące zmiany ceny w dniu debiutu spółki na NewConnect.
 Wyniki: Na podstawie analizy 620 spółek dopuszczonych do obrotu na rynku NewConnect wykazano, iż akcje 60,22% spółek posiadały wyższą cenę na koniec pierwszego dnia notowań w stosunku do ceny emisyjnej. Prym wiodą debiuty spółek groszowych, tj. o cenie emisyjnej poniżej 1 zł. Przy czym, przed 1 kwietniem 2010 r. średni wzrost ceny w dniu debiutu wynosił 176,06%. Po wprowadzeniu regulacji dotyczących podwyższenia wartości nominalnej akcji do 0,10 zł zmniejszyła się zmienność ceny w dniu debiutu wśród spółek groszowych, co spowodowało ograniczenie ryzyka inwestycyjnego na rynku NewConnect. Biorąc pod uwagę liczbę spółek debiutujących na NewConnect, przeważają podmioty, które wyemitowały papiery wartościowe posiadające cenę emisyjną powyżej 5 zł, przy czym średni wzrost ceny dla tych walorów był najniższy i kształtował się średnio na poziomie 32,83%.

Sanctions as a Mechanism Disciplining Issuers on the NewConnect Market

Purpose: This article aims to analyze the types of disciplinary measures imposed by the WSE, as the ATS Organizer, on NewConnect companies in 2008-2020 for violation of applicable law. The analysis covers the types of disciplinary measures depending on the breach of the ATS Regulations by issuers. Design/Methodology/Approach: Due to the complexity of the data analysis, mixed research methods were used as observation, analysis, and inference. The study used reports available at www.newconnect.pl and statistical data from the Annals of the Warsaw Stock Exchange. Findings: In the analyzed period, 57.42% of NewConnect companies were subject to sanctions. The most common disciplinary measures imposed on companies for non-compliance with the ASO Regulations are suspension, warning, and a fine. A financial penalty has a more disciplinary effect on NewConnect companies than other punitive measures. Practical implications: The conclusions of this study can be used in the sanctioning process of the ATS Organizer. The article's content concerns the findings of the analysis of the most common violations of the ATS Regulations by issuers and the answer to whether the penalty imposed by the ATS Organizer disciplines issuers, contributing to better fulfillment of the obligations arising from the ATS Regulations. Originality/Value: The theoretical and empirical literature does not provide guidance on factors that discipline issuers, contribute to compliance with regulations, and avoid excluding a company from the NewConnect market. The analysis results presented in the article supplement the existing research on sanctions imposed on companies listed on NewConnect in 2008-2020 due to the type of violation.

Short-Term Price Reaction to Filing for Bankruptcy and Restructuring Proceedings—The Case of Poland

This study aims to check market reaction to filing for bankruptcy and restructuring proceedings and to verify the short-term effect of a price reversal in the Polish market in the years 2004–2019. The research was conducted by dividing the analysed companies according to the procedure (bankruptcy and restructuring) and market (the main market and the NewConnect market). The research methodology used in the study is the event analysis method (AR, CAR, AAR and CAAR rates were used in the research), with a few statistical tests (T-test, Generalized rank Z Test, Generalized rank T-Test, Patell or Standardized Residual Test, Kolari and Pynnönen adjusted Patell or Standardized Residual Test). It was found that share prices in the Polish share market react quickly to public information about filing an application for bankruptcy or restructuring. For all analysed companies, the mean rate of return on the event day was equal to −14%, and on the next day, it was −3%. Regardless of the type of share market and the form of proceedings, the reversal effect was not confirmed in the short term. It was found that cumulative above-average rates of return fall more strongly for companies listed on the less liquid Newconnect market (−23.6%), and when information on the filing for bankruptcy proceedings is provided (−28.5%), as opposed to the main market (−19.1%) and restructuring proceedings (−17%). The cumulative average rate of return for all analysed companies in the research period (−2, +10 days) was equal to −20.6%.

Przyczyny wykluczenia spółek z rynku NewConnect

Przedmiot badań: W artykule podjęto tematykę przyczyn wykluczenia spółek z zorganizowane­go rynku akcji prowadzonego przez Giełdę Papierów Wartościowych S.A. poza rynkiem regulo­wanym w formie alternatywnego systemu obrotu, zwracając uwagę na istotną rolę debiutu spółki na rynku NewConnect przed zaistnieniem na Głównym Rynku GPW.
 Cel badawczy: Celem artykułu jest analiza przyczyn wykluczenia spółek z rynku NewConnect w latach 2008–2020, z uwzględnieniem rodzaju przeprowadzonej oferty oraz liczby wykluczo­nych spółek w stosunku do IPO przeprowadzonego w latach 2007–2020. Sprawdzono liczbę dni od dnia debiutu do dnia wykluczenia spółki z obrotu na NewConnect, biorąc pod uwagę przy­czyny wycofania. Zakres przedmiotowy artykułu obejmuje również analizę statusu spółki, której konsekwencją wykluczenia było przeniesienie na Główny Rynek GPW. Ponadto sprawdzono, jaki udział spółek po zmianie parkietu został wykluczony z obrotu na rynku regulowanym GPW. W związku z powyższym przyjęto hipotezę, iż spółki debiutują na NewConnect w formie oferty niepublicznej, aby w kolejnych latach zmienić parkiet notowań na Główny Rynek GPW.
 Metoda badawcza: Najważniejszą zastosowaną metodą badawczą jest krytyczny przegląd lite­ratury, analiza danych źródłowych oraz aktów prawnych dotyczących funkcjonowania Głównego Rynku GPW oraz zorganizowanego rynku akcji, prowadzonego przez Giełdę Papierów Warto­ściowych S.A. poza rynkiem regulowanym w formie alternatywnego systemu obrotu. Posłużono się także metodą obserwacji oraz wnioskowania logicznego.
 Wyniki: Do najczęstszych przyczyn wykluczenia spółek z obrotu na rynku NewConnect w latach 2008–2020 należą bezpieczeństwo obrotu, przeniesienie na Główny Rynek GPW oraz upadłość likwidacyjna. Ponadto dominuje udział wykluczonych spółek, których debiuty zostały odnoto­wane w pierwszych pięciu latach funkcjonowania na rynku NewConnect. W artykule wykazano, iż 97% spółek, które zostały przeniesione z NewConnect na Rynek Główny GPW, wprowadziło instrumenty finansowe do obrotu poprzez przeprowadzenie oferty niepublicznej. Zmiana parkietu notowań następowała średnio po upływie 3,3 roku. Ponad 80% spółek, które zmieniły parkiet notowań na Główny Rynek GPW, pozostaje aktywna na rynku regulowanym

Skutki zastosowania ICT w przedsiębiorstwach z rynku NewConnect

Przedmiotem przeprowadzonych analiz jest stosowanie technologii teleinformatycznych przez przedsiębiorstwa notowane na rynku NewConnect. Celem artykułu jest identyfikacja podstawowych efektów stosowania ICT w polskich przedsiębiorstwach prowadzących działalność innowacyjną (notowanych na rynku NewConnect). W badaniu wykorzystano technikę CASI (badanie na próbie 60 innowacyjnych przedsiębiorstw). W badaniu zastosowano metody: analizy, syntezy, dedukcji oraz indukcji.

Growth of Companies and Growth Potential on the Example of Business Services for Firms Sector on NewConnect Market

The article is related to the growth of young companies operating in the business services for firms sector, that are listed on the Warsaw Stock Exchange alternative market – NewConnect. The growth opportunity models are introduced to explain the growth process of these companies together with other controlling factors such as profitability, size of the company and its earnings. As the result of the research it is found that growth potential is negatively correlated with assets and equity growth in short term, but it affects positively earnings per share growth in a longer, three-year period. It can therefore be concluded that in the sector taken into consideration, investors’ decisions reflected in the growth potential measures may be translated into company’s value growth only in a longer term.

Subsidies in the financial statements of companies listed on the Warsaw Stock Exchange

Motivation: In connection with the growing popularity of using non-returnable public aid, financed both from national and European Union funds among the enterprises, it is worth looking at the quality of financial reporting in this respect. The author’s earlier studies showed that companies listed on the Warsaw Stock Exchange (WSE) on the NewConnect market do not fully disclose the impact of the subsidy on their financial standing and results.Aim: The aim of the paper is an attempt to diagnose the quality of financial statements of public companies listed on the WSE main market in terms of using subsidies as well as confirming the theses included in the paper. The theses refer to compliance with the reporting obligations and the lack of dependence of the disclosure number on the significance of the subsidy amounts in the financial statement.Results: Both explanatory notes and the management board’s report on operations do not include all required disclosures. This is demonstrated by the average as well as the median of the number of disclosures below half of their maximum number. The number of disclosures is not related to the increased significance of the subsidy amounts in the financial statements, which has been confirmed by comparing the entire population of companies under study to a group of companies with the share of subsidies determined as significant. Analysis results for individual company reports as well as the analysis at sectoral level speak in favour of this finding.

Knowledge management significance and communication complexity in the context of innovative enterprises: case of Polish NewConnect market

The main goal of this study is to show how the communication complexity influences the knowledge sharing in the organizational dimension, on the example of the NewConnect market in Poland. This paper presents and investigates the above mentioned topics of showing the importance of different forms of communication in sharing knowledge in innovative enterprises based on the questionnaire that has been conducted in NewConnect market in Poland. The empirical study proved that: (1) there is no correlation between the level of communication management in innovative enterprises, (2) the age of the enterprise level and the significance of knowledge management in innovative enterprises, (3) the age of the enterprise and the level of communication complexity in innovative enterprises. The findings of this research give varied and valuable arguments to managers from each sector in paying much attention to different forms of communication with stakeholders in sharing knowledge. This paper is valuable to academics and practitioners in search of reliable data on the influence of modern and traditional forms of communication on sharing knowledge in innovative enterprises, showing the fulfilment of the gap this type of study in the literature.

Building Relationships with Customer 4.0 in the Era of Marketing 4.0: The Case Study of Innovative Enterprises in Poland

(1) Background: Contemporary enterprises are putting more and more emphasis on shaping lasting and effective relationships with clients. This is not an easy task, especially in the conditions of Marketing 4.0, which imposes on enterprises the need to holistically consider the needs as well as the skills and inventiveness of customers. It can be assumed that Clients 4.0 require both changes in the scope of business processes and shaping communication with their environment. That is why it is important today to skillfully and correctly determine the complexity of communication with Clients 4.0, as well as to determine the importance of communication with clients for the development of enterprises—especially those operating in innovative industries. (2) Methods: Empirical research was carried out on a sample of 100 innovative enterprises listed on the NewConnect market in Poland. The respondents were managers at various levels. Two indicators were constructed based on these assessments: Customer Relationships Importance Index (CRII) and Customer Communication Complexity Index (CCCI). (3) Results: It was determined that the complexity of communication of innovative enterprises with customers is at a high level. What is more, the importance of relationships with Customers 4.0 for the development of innovative enterprises is at a high level. It was also indicated that there is no correlation between the level of complexity of relationships with Customers 4.0 and the importance of these relationships for the development of innovative enterprises. (4) Conclusions: Based on the survey, it can be assumed that the relations with Clients 4.0 have the greatest share in shaping the development of innovative enterprises in the areas of minimizing the number of complaints, financial liquidity and efficiency of core business processes. It is also important that, in shaping the complexity of communication with Clients 4.0, enterprises mainly consider traditional phone calls and email account.

Cost analysis in the audit of selected companies in Poland

The aim of the article is to present the issues related to the work of auditors in the area of cost analysis as an element of the financial statement in an enterprise. Empirical studies were conducted on the basis of the financial statements published by selected companies listed on the NewConnect market in 2017, as well as the audit reports issued for those companies. The partial goals include the assessment of the percentage of certain types of opinions issued by independent auditors reviewing the financial statements of selected companies listed, as well as the identification of the areas regarding costs of activities, which are most often described in the explanations or qualified opinions in the research sample under analysis. The undertaken research are preliminary and in the future should be carried out on a larger research sample divided into industry sectors.

Is there a place for tax incentives for SMEs in the qualitative development of the NewConnect market?

Is there a place for tax incentives for SMEs in the qualitative development of the NewConnect market?

Determinants of the capital structure of TSL sector enterprises

Determinants of the capital structure of TSL (Transport, Spedition, Logistics) sector enterprises The capital structure has been of interest for researchers in the field of financial theory for over 60 years. However, literature surveys show that relatively few studies on the structure of capital and the factors shaping it can be applied to the TSL industry. The TSL (Transport, Spedition, Logistics) sector belongs to industries with a high development potential, both in the world and Poland. In order to meet the need for the diagnosis of the TSL industry in Poland, the research was undertaken to identify and examine the strength and direction of the impact of selected factors on the capital structure of enterprises in the TFL sector in Poland. The article consists of two parts. The first part explains the issues related to defining the concept of capital structure and includes identification of capital structure determinants based on the literature. The second part shows research methods, describes the sample, defines variables and presents results of the research. The enterprises listed on the NewConnect market were the subject of the research. It was to achieve the set goal that the correlation analysis and the linear regression method were used. Both correlation analysis and regression analysis have not confirmed the significance of all seven capital structure determinants. The correlation analysis has confirmed the significance of four determinants: asset structure, profitability, company size and financial liquidity. The regression analysis has also confirmed the statistical significance of the four determinants; these are: the structure of assets, size of the company, financial liquidity and the effective tax rate. The analysis of correlation shows that the level of indebtedness is positively correlated with the size of the enterprise and profitability, while negatively, with the structure of assets and financial liquidity. In turn, the regression analysis shows that the level of indebtedness is positively correlated only with one variable: the size of the enterprise, while negatively with the three variables: the structure of assets, financial liquidity and the effective tax rate.

Sygnalizacja wyników finansowych w polityce dywidendowej na rynku NewConnect

The aim of the paper was to give evidence whether changes of dividends could be considered as signals forecasting changes in future financial results. The sample consists of 42 companies listed on the NewConnect market in the years 2007–2016, paying regular dividends for at least 3 years. Using linear regression models, we show that dividend changes have a weak but positive effect on revenues changes, but they are insignificant when explaining changes in operating performance and net income. The paper fills a gap in empirical research on the Polish stock market, and especially the signalling function of dividends on NewConnect, which is characterised by a high degree of information asymmetry, has been examined for the first time.

ZINTEGROWANE PODEJŚCIE OBEJMUJĄCE METODĘ AHP I TOPSIS W OCENIE KONDYCJI FINANSOWEJ PRZEDSIĘBIORSTW SEKTORA TELEKOMUNIKACYJNEGO

The aim of the paper is to make a synthetic evaluation of the financial condition of telecommunications sector companies listed on the NewConnect market in the years 2012-2015. Integrated approach, which includes the use of the AHP and TOPSIS methods, is presented and applied. The paper is both theoretical and empirical: the first part describes the process of developing a synthetic measure and the second contains the analysis and assessment, on the basis of the presented synthetic measure. Next, the studied companies are ranked and grouped by assigning the companies to four typological groups. The conducted calculations show that, the analysed companies had a varying financial condition. Most often it could be described as average and good. A positive sign is that, in the analysed time period, financial condition improved in 70% of the studied companies

Wykorzystanie wybranych metod statystycznych do oceny zagrożenia kontynuacji działalności przedsiębiorstw produkcyjnych

The principle of continuation of business activities is considered as the foundation of accounting, conditioning the principles of preparing financial statements. It is possible to indicate a lot of premises, the occurrence of which may endanger the existence of an economic entity. The different analytical methods are used to identify them. The purpose of this article is 1) to present the principle of continuation of business activities, 2) to indicate the circumstances that threaten it, 3) discuss the methods of financial forecasting, and 4) to analyze and assess the risk of loss of ability to continue operations of companies listed on the NewConnect market, whose business is production building materials. The analysis covered the unit financial statements of companies for the years 2015-2017. To assess the financial condition of individual enterprises, selected discriminant models and logit models were used, which are characterized by a high level of forecast accuracy and relate to the business profile of the analyzed companies.