news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

(Original title: Failed at the last minute? 4 IPO approvals have expired, Guoxiang only has 4 days left, and these 10 are about to expire)

GetIPOThe number of such “disappointed” companies is increasing. As of July 23, this year, four companies have had their IPO approvals expired and have not been able to issue shares.Listing, namely Kezhi Co., Ltd., Runyang Co., Ltd., Qiaolong Emergency, and Xintong Pharmaceutical.

At present, including the above projects, a total of 32 companies have obtained approvals but have not yet issued shares, of which 10 are about to expire. Among them, the approvals of E-net, Jialiqi, and Xiaofang Pharmaceutical will expire on September 13; the approvals of Hehe Information will expire on September 28; the approvals of Fute Technology will expire on October 10; the approvals of Suda Co., Ltd., Weihua New Materials, and Hongshi Laser will expire in November; and the approvals of Wireless Media and Zhongxin Co., Ltd. will expire in December.

In addition, the registration approval of the controversial Zhejiang Guoxiang will expire on July 28. The company announced in October last year that it would suspend its issuance work.

Enterprises obtainstockFailure to issue shares despite registration approval is mostly related to two factors. One is due to the cyclical decline in the company's performance or the industry it is in; the other is that the existing IPO performance review standards have been raised, but the companies that were approved earlier no longer meet the latest requirements. In addition, sudden events or public opinion that occurred within the company itself, as well as restrictions on the business of intermediary institutions, are also one of the reasons.

Four IPO approvals expired this year and no shares were listed

On July 19, Kezhi Co., Ltd. issued an announcement that since the registration approval for the company's application for public issuance of shares will expire on July 20, Huaxi Securities' underwriting qualification has been suspended and has not yet been restored. At present, it does not have the objective conditions to initiate the issuance and listing, and the issuance cannot be completed before the expiration of the registration approval.

Relevant stock approval documents show that the IPO stock registration application of Kezhi Co., Ltd. on the Beijing Stock Exchange was approved by the China Securities Regulatory Commission on July 20, 2023, approving the company's registration application for public issuance of shares to unspecified qualified investors. The approval is valid for 12 months from the date of approval of registration.

IntendedShenzhen Stock ExchangegemThe listed Runyang shares had their stock registration take effect on June 29, 2023, but the stock issuance has not been completed in the past year, and the stock registration approval has expired. The sponsor of Runyang shares' IPO is Haitong Securities.

Qiaolong Emergency, which also plans to be listed on the Shenzhen Stock Exchange's Growth Enterprise Market, has a stock registration effective date of June 8, 2023. It has already exceeded the 12-month validity period and the company has not issued shares for listing. The company's sponsor is Changjiang Securities.

Xintong drug is intended toShanghai Stock ExchangeThe company will be listed on the Science and Technology Innovation Board. The stock registration effective date is April 25, 2023. The company has not completed the stock issuance in the past year. The company's stock registration approval has expired and is invalid. The company's sponsor isCITIC Securities。

Zhejiang Guoxiang, which originally planned to list on the Shanghai Stock Exchange main board, received the registration approval from the China Securities Regulatory Commission on July 28 last year and started the issuance work in late September of the same year. Later, the company was subject to much discussion from all sides. On October 7 of the same year, the company announced the suspension of subsequent issuance work and would continue the issuance work after the relevant matters were verified and clarified. Now, the validity period of the approval document is about to expire, and Zhejiang Guoxiang's IPO will have a final conclusion.

In addition, on March 20 last year, the registration approval obtained by Kaixue Cold Chain for listing on the Beijing Stock Exchange expired, making it the first company to pass the review but not issue shares.

Due to factors such as performance or industry cycle risks

The reasons why the above-mentioned companies failed to successfully issue shares are related to the company's performance or industry cycle risks.

According to relevant documents of Kezhi Co., Ltd., as of the end of 2022, among the company's real estate customers' orders on hand, there are 56 projects with risks such as delays, suspension of work, and long-term non-repayment, involving an order amount of 120 million yuan, accounting for 15.63% of the total amount of real estate customers' orders on hand. The company said that if the collection of orders on hand is unfavorable, it may lead to delayed or non-delivery of the project, which will make the orders unable to achieve the expected profit or even loss, which will have an adverse impact on the company's operations.

The reason why Runyang shares failed to issue shares for listing may be related to the adjustment cycle of the domestic photovoltaic industry. Runyang shares mainly focuses on the research and development and production of high-efficiency solar cells. The company also disclosed in its prospectus that the risks related to the industry are specifically the risk of fluctuations in operating performance caused by technological upgrading, the risk of international trade frictions, the imbalance of product structure, and the risk of weak ability to cope with fluctuations in downstream industries.

According to the prospectus of Qiaolong Emergency, the company expects to achieve operating income in the range of 116 million yuan to 148 million yuan in January-June 2023, with a year-on-year change of -24.02% to -3.21%; the net profit attributable to the parent company's shareholders after deducting non-recurring gains and losses is in the range of 30.0488 million yuan to 39.3087 million yuan, with a year-on-year change of -28.24% to -6.13%.

The prospectus of Xintong Pharmaceutical shows that from 2020 to 2022, the company's operating income was only 9.835 million yuan, 1.7852 million yuan and 1.1003 million yuan respectively, and the non-net profit in the same period was -102 million yuan, -82.0655 million yuan and -69.9974 million yuan respectively.

On March 20 last year, Kaixue Cold Chain stated that it planned to hire a sponsor and restart the listing application process at an appropriate time after the internal control deficiencies were rectified in a standardized manner.

Exchanges optimize listing conditions

On April 12 this year, the newNine Articles” was released, and on the same day, the Shanghai and Shenzhen Stock Exchanges optimized their listing conditions.

After careful research and demonstration, the Shanghai Stock Exchange plans to improve the conditions for listing on the main board and moderately increase indicators such as net profit, net cash flow, operating income and market value.

First, the cumulative net profit indicator for the last three years in the first set of listing standards will be increased from 150 million yuan to 200 million yuan, the net profit indicator for the most recent year will be increased from 60 million yuan to 100 million yuan, the cumulative net cash flow indicator generated by operating activities in the last three years will be increased from 100 million yuan to 200 million yuan, and the cumulative operating income indicator in the last three years will be increased from 1 billion yuan to 1.5 billion yuan.

The second is to increase the net cash flow generated from operating activities in the last three years in the second set of listing standards from 150 million yuan to 250 million yuan.

Third, the estimated market value indicator in the third set of listing standards was raised from 8 billion yuan to 10 billion yuan, and the operating income indicator in the most recent year was raised from 800 million yuan to 1 billion yuan. At the same time, the main board positioning was further clarified in the "Stock Issuance and Listing Review Rules", and detailed requirements were put forward for the issuer's industry status, etc.

On the same day, the Shenzhen Stock Exchange publicly solicited opinions on the revision of the "Stock Issuance and Listing Review Rules" and answered reporters' questions. The newly revised "GEM Stock Listing Rules" moderately raised the net profit index of the first set of GEM listing standards, raising the net profit index in the most recent two years from 50 million yuan to 100 million yuan, and added a new requirement that the net profit in the most recent year must be no less than 60 million yuan, highlighting the company's risk resistance; moderately raised the estimated market value, revenue and other indicators of the second set of GEM listing standards, raising the estimated market value from 1 billion yuan to 1.5 billion yuan, and the operating income in the most recent year from 100 million yuan to 400 million yuan, supporting the listing of companies whose scale, industry and development stage meet the requirements of the GEM positioning.

On April 30, the Shanghai Stock Exchange issued the "Shanghai Stock Exchange Science and Technology Innovation Board Enterprise Issuance and Listing Application and Recommendation Interim Provisions (Revised in April 2024)", which will be implemented from the date of issuance. The revised contents are as follows.

First, strengthen the key indicators for measuring scientific research investment, scientific research results and growth. The first item of the first paragraph of Article 6 of the Interim Provisions, "the amount of R&D investment in the last three years" is adjusted from "accumulated more than 60 million yuan" to "accumulated more than 80 million yuan", and the third item "more than 5 invention patents applied to the company's main business" is adjusted to "more than 7 invention patents applied to the company's main business and capable of industrialization", and the fourth item "the compound growth rate of operating income in the last three years" is adjusted from "reaching 20%" to "reaching 25%". The fifth item of the first paragraph of Article 7, "the total number of invention patents (including national defense patents) that have formed core technologies and applied to the main business is more than 50" is adjusted to "the total number of invention patents (including national defense patents) that have formed core technologies and applied to the main business and capable of industrialization is more than 50". Second, new sponsorship requirements are added to promote scientific and technological innovation and the development of new quality productivity.

Dual pressure from performance and regulation

In the view of Wang Jiyue, a senior investment banker, projects that have been delayed in launching issuance after obtaining approval documents are mostly due to post-meeting matters that need to be reconfirmed. They are also related to problems with the company's performance, the industry it operates in, and other risk issues, which have led to the failure to implement the issuance plan and ultimately the expiration of the approval document.

A senior insurance agent said that the current review standards are higher than those for companies that passed the review. Some companies that obtained approval documents earlier may not have just met the current standards, or some may have experienced a decline in performance, and there is great uncertainty in their operations.

At the same time, the insurance agent pointed out that all IPO projects that are subsequently approved should meet the requirements, and it will be rare that shares are not issued during the validity period of the approval.

He Nanye, an investment banker, pointed out that with tightening supervision, once a company has major changes after obtaining approval, such as public opinion pressure, reports, etc., the supervision may press the pause button on issuance. In addition, with the economic downturn, the company's performance may decline significantly after obtaining approval, resulting in the inability to issue shares on time. Until the approval expires, the performance has not improved.