IPOs are "strict": 55 companies have withdrawn their applications during the year, and 33 fines were issued within 2 months of supervision
At the beginning of 2024, the word "strict" is at the forefront of review, and IPO applications are frequently withdrawn or rejected (including withdrawal, rejection, and registration termination, the same below).
According to statistics from Wind, The Paper reporter found that 55 companies have terminated their IPOs this year, and supervision and law enforcement have been stepped up simultaneously. Since the beginning of 2024, not only have securities institutions ushered in strict supervision, issuing 33 related fines, but the China Securities Regulatory Commission has also investigated and handled the first case (before registration) fraudulent issuance cases.
In addition, as the entire IPO chain tightens, companies in restricted industries have turned to the Beijing Stock Exchange and the Hong Kong Stock Exchange to seek listing opportunities.
55 companies have terminated their IPOs this year
On the last day of February, three IPO companies withdrew their orders simultaneously.
On February 29, the official website of the Shenzhen Stock Exchange showed that the review status of the GEM IPO of Shandong Valin Electronics Co., Ltd. ("Valin Electronics" for short) was changed to "terminated" because the company and the sponsor withdrew its application for issuance and listing.
According to relevant regulations, the Shenzhen Stock Exchange decided to terminate its issuance and listing review.
At the same time, Anhui Shangxin Zhengtong Information Technology Co., Ltd. and Changzhou Hengfeng Special Guide Co., Ltd., which planned to apply for listing on the Beijing Stock Exchange, also chose to withdraw voluntarily.
With the withdrawal of three companies, 55 companies have terminated their IPOs this year.
According to statistics from Wind, a reporter from The Paper reported that a total of 35 companies terminated their IPOs in January, and a total of 25 IPOs terminated in January last year (which coincided with the Spring Festival holiday); a total of 20 companies terminated their IPOs in February, compared with 22 in the same period last year.
In other words, a total of 55 companies have terminated their IPOs this year, which is slightly higher than the 47 companies' IPOs terminated in the same period last year.
However, the monthly withdrawals in January and February did not exceed the peak value in 2023.
In March and December of 2023, a total of 37 and 50 companies withdrew their approval.
In fact, The Paper has noticed that starting in 2022, the number of IPO cancellations has continued to rise, with a total of 257 companies' IPOs terminated.
In 2023, under the market turmoil, the entire IPO chain tightened, and withdrawals became more prominent. As many as 262 companies' IPOs were terminated throughout the year, and the number of withdrawals also hit the largest wave of withdrawals in the past decade.
33 fines issued within 2 months of supervision
At the beginning of 2023, after the implementation of the comprehensive registration system, although the conditions for issuance and listing are more diverse and inclusive, the review and legal constraints will also be stricter.
Especially since 2024, not only have securities institutions ushered in strict supervision, the China Securities Regulatory Commission has also investigated and handled the first case of fraudulent issuance (before registration).
According to statistics from The Paper, since 2024, the China Securities Regulatory Commission and the three major exchanges have issued a total of 33 fines to securities firms and their employees for IPO sponsorship business.
It is worth noting that the Shenzhen Stock Exchange issued 19 fines in the first week of 2024, involving Guangzhou Xinde Communication Technology Co., Ltd., Liaoning Yinyi Biotechnology Co., Ltd., Xintianxia Technology Co., Ltd., Shenzhen Huazhirong Technology Co., Ltd., Jiangsu Wode Agricultural Machinery Co., Ltd. and other IPO projects, and most of them were withdrawn after being selected for on-site inspection or on-site supervision.
In addition, on February 9, the China Securities Regulatory Commission notified Shanghai Sierxin Technology Co., Ltd. ("Sierxin" for short) of administrative penalties for illegal issuance of fraudulent issuances during its application for initial listing on the Science and Technology Innovation Board.
Among them, Sierxin was fined 4 million yuan, and the then senior executives were fined ranging from 1 million yuan to 3 million yuan.
It is worth noting that this case is the first fraudulent issuance case investigated by the China Securities Regulatory Commission after the issuer submitted application materials but before being registered since the implementation of the new Securities Law.
Since the beginning of this year, regulatory authorities have repeatedly stated their stance on stricter IPO review.
On January 19, the China Securities Regulatory Commission held a press conference. Zhou Xiaozhou, the main person in charge of the Comprehensive Business Department, said that we must adhere to the principle of "taking responsibility upon reporting" and severely punish those who "break through the border while sick" and "withdraw as soon as possible".
From January 25th to 26th, the China Securities Regulatory Commission held the 2024 system work meeting.
The meeting pointed out that it is necessary to consolidate the "gatekeeper" responsibilities of intermediary agencies such as sponsors and accounting firms, adhere to the principle of "declaration means taking responsibility", and strictly verify and severely punish those who "break through the border while sick".
On February 4, the official website of the China Securities Regulatory Commission published the article "The China Securities Regulatory Commission Strictly Cracks Down on Fraudulent Issuances, Financial Frauds and Other Illegal Information Disclosures in accordance with the Law", emphasizing the implementation of the concept of "declaration equals responsibility" and "withdrawal after investigation". Let it go."
On February 23, Yan Bojin, Chief Risk Officer and Director of the Issuance Department of the China Securities Regulatory Commission, further expressed his position at a press conference.
He said that the China Securities Regulatory Commission system adheres to the investor-oriented principle, strictly examines companies planning to be listed, severely punishes violations of laws and regulations, and infringes on the interests of investors, and uses the deterrent power of supervision to prevent companies from "going through the border with illness". Improve the quality of listed companies from the source.
"In the supervision of issuance and listing, we are continuing to strengthen the entire chain of controls, severely punish financial fraud and fraudulent issuances. We will also significantly increase the proportion of on-site inspections of companies to be listed, and respond to investors' concerns with the improvement of the quality of listed companies. "Yan Bojin said.
Many companies have switched to Beijing Stock Exchange and Hong Kong Stock Exchange.
In addition to the withdrawal of IPOs due to illness, some companies have withdrawn due to industry restrictions and other reasons.
Among them, The Paper combed through the VIP and Wind data of Great Wisdom and found that in 2023, a total of 40 "food, clothing, housing and transportation" and 38 pharmaceutical companies had their IPOs intensively failed in 2023.
The Paper has noticed that these restricted companies have turned their attention to the Beijing Stock Exchange and the Hong Kong Stock Exchange for IPOs.
On February 1, 2024, Lao Niangjiu Catering Co., Ltd. (referred to as "Lao Niangjiu", 874418.NQ), which failed in its IPO on the Shanghai Stock Exchange, was officially listed on the New Third Board, and then submitted the Beijing Stock Exchange listing guidance filing to the China Securities Regulatory Bureau.
Also in February, Jiangsu Teweinong Food Co., Ltd., Dalian Haibao Food Co., Ltd., Wufeng Chicheng Biotechnology Co., Ltd., Suzhou Aide Technology Development Co., Ltd., and Shandong Qilong Offshore Oil Steel Pipe Co., Ltd. applied for BJT Directly contacted for review.
Some investment institutions admitted to The Paper that they have been paying close attention to the Beijing Stock Exchange since the second half of 2023, and have even cooperated with the sponsorship business departments of securities companies to guide companies to be listed on the Beijing Stock Exchange.
The above-mentioned industry insider said, "We will push the projects invested by early-stage funds to be listed on the Beijing Stock Exchange. Projects with a single investment scale of 10 to 20 million can easily be exited on the Beijing Stock Exchange."
Investors from Wuxi Xinshang Capital also told The Paper that the Beijing Stock Exchange is relatively friendly to smaller companies, and they prioritize companies with valuations of several billion yuan to be listed on the Beijing Stock Exchange.
"Due to the pressure of listing, many entrepreneurs will still choose convenient channels. Some of the companies we have invested in are also reporting to the Beijing Stock Exchange. The current liquidity of the Beijing Stock Exchange is also quite good." Another industry insider also told The Paper The news said, "They encourage companies to go online as soon as possible, but the core still depends on the development of the company itself."
Wang Jingyuan, chairman of Tianqi Capital, also said in an interview with reporters that while the door to listing in other sectors is ajar, it is necessary to seize the opportunities of the Beijing Stock Exchange.
As for some people who are worried about valuation and liquidity, he believes: "The activity of the capital market depends on the quality of assets. If Beijing Exchange has enough high-quality assets, its liquidity will not be bad."
In addition to the Beijing Stock Exchange, the Hong Kong Stock Exchange is also one of the listing destinations for companies with restricted industries.
In 2022, Mixue Bingcheng, a new tea beverage leader that had sought to be listed on the A-share main board, did not realize the shift after the implementation of the comprehensive registration system.
In January 2024, Mixue Bingcheng also officially submitted a prospectus to the Hong Kong stock market.
In addition, Beijing Huahao Zhongtian Biopharmaceutical Co., Ltd., Zhejiang Taimei Medical Technology Co., Ltd., and Peg Biopharmaceutical (Suzhou) Co., Ltd. have all failed to enter the Science and Technology Innovation Board in 2023. Now two companies have chosen to join the Science and Technology Innovation Board this year. Moved to the Hong Kong Stock Exchange.
The Paper reporter Qi Yeyun