Frequent corporate withdrawals

  Why does IPO slam on the brakes?

  Our reporter Sun Jie

  The market has set off a wave of IPO withdrawals, and the list of companies is still expanding.

Yesterday, the official websites of the Shanghai Stock Exchange and the Shenzhen Stock Exchange revealed that five more companies have terminated their IPOs.

In the recent past, as many as 50 companies planning to sprint to the Sci-tech Innovation Board and ChiNext, including a group of star companies such as Yunzhisheng and Rouyu Technology, have retreated.

The industry believes that this year the China Securities Regulatory Commission will introduce new rules for on-site inspections of first-issuing companies to ensure that the entry point of listing is well controlled from the source. Regulatory upgrades have caused some "unconfident" companies to slow down their IPO.

  5 listed companies take the initiative to withdraw orders a day

  Yesterday, the official website of the Shenzhen Stock Exchange showed that Zhejiang Debao Communication Technology Co., Ltd. (referred to as "Debao Shares") applied to withdraw the application documents for the issuance and listing.

On July 31 last year, the Shenzhen Stock Exchange accepted the application for Debao’s initial public offering and listing on the Growth Enterprise Market. On February 23, the company submitted an application to withdraw its IPO to the Shenzhen Stock Exchange, and the review was terminated according to law.

The situation of Xi'an Eagle Aviation Technology Co., Ltd. ("Eagle Aviation") is similar, and the review was terminated due to the withdrawal of the ChiNext IPO application to the Shenzhen Stock Exchange the day before.

  The same goes for the Sci-tech Innovation Board.

According to information disclosed on the official website of the Shanghai Stock Exchange yesterday, Shanghai Lanke Petrochemical Environmental Protection Technology Co., Ltd. ("Lanke Environmental Protection") terminated the IPO review because the company withdrew its application for listing on February 18.

On the same day, Dulwich Huatai Technology Co., Ltd. ("Dulwei Huatai") and Jiangsu Guoguang Information Industry Co., Ltd. ("Guoguang Information") were also terminated by the Shanghai Stock Exchange for similar reasons.

  Under the registration system, the listing of companies has been a wave, but now the market has set off a wave of withdrawals, and the Science and Technology Innovation Board and the Growth Enterprise Market have become the "hardest hit areas" for terminating IPOs.

As of the press release yesterday, according to the review dynamics disclosed on the official website of the Shanghai and Shenzhen Stock Exchanges, since the beginning of this year, the Science and Technology Innovation Board has terminated the IPO review of 19 companies, and the number of companies that have voluntarily withdrawn orders on the ChiNext has reached 31, and the total number of the two has reached 50.

  More than 70% of "winning" companies have chosen to leave

  For the emergence of order withdrawals, the market generally believes that there is a very obvious background reason.

On January 29 this year, the China Securities Regulatory Commission issued new regulations for on-site inspections of starting companies, clarifying the basic requirements, standards, procedures and follow-up work for on-site inspections of starting companies.

On-site inspections of IPOs are now beginning to be regulated.

  In the context of the pilot registration system, is it necessary to carry out on-site inspections of first issuers?

The CSRC explained that the on-site inspection is to further strengthen the supervision of the information disclosure of the initial companies, strictly control the IPO entrance, supervise the intermediary agencies to perform their duties, and improve the quality of listed companies from the source.

The China Securities Regulatory Commission also clarified that this applies to all IPO companies in all sectors of the exchange.

  On January 31, the official website of the Securities Industry Association of China released the latest batch of spot checks on the quality of first-issue corporate information disclosure. A total of 20 companies were selected. The Securities Regulatory Commission inspected the quality of their letters and the practice of intermediary agencies.

These 20 IPO companies are the first samples selected after the on-site inspection of the new regulations.

According to statistics from reporters, as of yesterday, 15 of the 20 "successful" companies to be listed on the market have retreated and chose to withdraw their IPO applications, accounting for as much as 75%.

  These cancelled companies include the star company Rouyu Technology, which has been less than two months after its IPO application was accepted.

As for the reasons for the withdrawal of the application, Royole Technology stated that the eligibility of the “three types of shareholders” at the direct level based on the company’s shareholder structure needs to be further demonstrated. Taking into account the company’s development strategy, it was decided after research to suspend this division. IPO application.

Another Papaya Mobile, which took the initiative to withdraw orders from the ChiNext, has been hotly discussed in the market because it has changed its listing path four times in five years, and ran the NEEQ, U.S. stocks, science and technology innovation boards, and ChiNext.

  On-site inspection and purification of IPO source

  Regarding the recent wave of IPO withdrawals, the industry believes that this is a manifestation of the enthusiasm of the IPO on-site inspection.

  Some industry insiders believe that after the pilot registration system, the IPO review has been decentralized from the Securities Regulatory Commission to the exchange, which has greatly improved the inclusiveness of the market, and the threshold seems to have been lowered.

Dong Dengxin, director of the Institute of Financial Securities of Wuhan University of Science and Technology, said that it is precisely because the sector attributes of the Sci-tech Innovation Board and ChiNext Board are not quantified, and the authenticity and adequacy of the IPO application materials cannot be quantified, this ambiguity may lead to some companies. There is a fluke.

  After a company’s IPO application is accepted, the exchange can only review it through the general process, while the random inspection of the quality of the IPO company’s letter is to take targeted and detailed inspections on a small number of samples, "equivalent to the review process in the exchange. In addition, with one additional checkpoint, the selected companies will naturally have more pressure.” Dong Dengxin said that the implementation of on-site inspections of first-launch companies can be carried out by consulting and obtaining relevant basic materials to carry out penetrating focus on the enterprise site. Inspection is a necessary supplement to the written review.

  According to industry insiders, active withdrawal is not the same as passive withdrawal. If it is withdrawn after failing the review, the problems exposed may be regarded as IPO violations and will be included in the integrity list, while active withdrawal will not leave the case. .

Therefore, it can be said that it is a more sensible choice for enterprises to take the initiative to withdraw.

  "This is also enough to prove that the on-site inspection is effective." Dong Dengxin believes that the quality of letter and Phi checks are very important to supplement and improve the audit of the exchange, and have a strong deterrent effect on enterprises, purifying the IPO market environment from the source. Close the entrance to the capital market.