■Liao Muxing/Picture
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As soon as it is investigated, it will be withdrawn and held accountable
CITIC Securities and China Securities have both withdrawn nine
The whole chain of IPOs has been tightened, and the regulator has proposed to strictly control the access to issuance and listing, strictly prohibit excessive financing, and the number of IPO withdrawals has continued to rise. According to the data, a total of 257 IPOs will be terminated in 2022 and 262 in 2023, and the number of withdrawals will also hit the largest wave of withdrawals in the past decade. Since the beginning of 2024, 82 IPOs have been terminated on the Shanghai and Shenzhen Stock Exchanges, and most of the reasons for termination are withdrawal of materials. From the perspective of industries, according to the statistics of the China Securities Regulatory Commission, the computer, communication and other electronic equipment manufacturing industry has the largest number of IPO termination enterprises, with 15 cases, followed by the special equipment manufacturing industry and the chemical raw materials and chemical products manufacturing industry.
Since the beginning of this year, the number of CITIC investment sponsor orders has been 27, and 9 have been withdrawn, with a withdrawal rate of 33.33%. The number of CITIC Securities sponsorship orders is as high as 31, and 9 have been withdrawn at present. In addition, it is relatively rare that Guojin Securities has withdrawn 3 IPOs in just 4 days, and 4 have been withdrawn this year, with a withdrawal rate of 36.36%.
It is worth noting that in February this year, the China Securities Regulatory Commission notified Shanghai Silxin Technology Co., Ltd. of the administrative penalty for fraudulent issuance in the process of applying for the initial listing of the Science and Technology Innovation Board. Silxin was fined 4 million yuan, and the executives at the time were fined 1 million yuan to 3 million yuan. This case is the first fraudulent issuance case investigated and handled by the CSRC after the issuer submitted the application materials but before it was registered since the implementation of the new securities law.
On March 15, the China Securities Regulatory Commission issued the "Opinions on Strictly Controlling the Access to Issuance and Listing and Improving the Quality of Listed Companies from the Source (Trial)", which clearly stated that it is strictly forbidden to blindly seek listing and excessive financing for the purpose of "circle money", and pay close attention to whether the enterprises to be listed have pre-listing surprise "clearance" dividends. Against this backdrop, quite a number of companies withdrew their applications. In June 2023, the IPO application of Daoerdao Technology Co., Ltd. was accepted by the Shenzhen Stock Exchange, but the prospectus shows that the company's actual controller and his relatives hold a total of 87.57% of the company's shares directly and indirectly, and in the three years from 2020 to 2022, the sum of the company's net profit deducted from non-attributable to the parent is only 447 million yuan, and the company has paid a total of 440 million yuan in dividends during this period, which can be described as a "hollowed-out" dividend. On March 31 this year, Doydo withdrew its listing application.
Since the beginning of this year, the China Securities Regulatory Commission and the three major exchanges have issued a total of 33 fines to securities firms and their practitioners for the IPO issuance sponsorship business, involving Guangzhou V-SOL Communication Technology Co., Ltd., Shenzhen Huazhirong Technology Co., Ltd., Jiangsu World Agricultural Machinery Co., Ltd. and other IPO projects, most of which were withdrawn after being selected for on-site inspection or on-site supervision.
On April 4, the Shenzhen Stock Exchange terminated the IPO review of five companies, including Haojida, Zhouyu Design, Huayi Ecology, Direction Electronics and Sumai Medical, all of which were voluntarily withdrawn by issuers and sponsors. Among the five sponsorship projects, CITIC Securities accounted for 2, Haitong Securities, Shenwan Hongyuan, and Zheshang Securities each accounted for 1.
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Strict quality control of research report compliance
CITIC Securities received 17 fines last year
In recent years, the brokerage industry as a whole has shown a strong regulatory trend, in addition to strictly controlling the quality of listing, research, brokerage, investment banking and other businesses are also developing towards a strict and refined degree. In 2023, the China Securities Regulatory Commission, the Shanghai Stock Exchange, the Shenzhen Stock Exchange and other regulatory authorities issued a total of 323 fines or regulatory warnings to 82 securities firms. Among them, 134 were related to brokerage business violations, 105 were related to investment banking business violations, 48 were related to research report violations, and 20 were related to asset management business violations.
From the perspective of the fined institutions, CITIC Securities and Everbright Securities will both have more than 10 fines in 2023, 17 and 10 respectively. CITIC Securities' violations focused on the investment banking business, while Everbright Securities focused on the brokerage business. The brokerage business involved the largest number of violations, accounting for more than 40%.
After the regulatory authorities carried out the "double random" on-site inspection of the research report in 2022, the research report violation became the "hardest hit area" of fines in 2023, of which the number of fines for Zheshang Securities, Guorong Securities, Guosheng Securities, and Pacific Securities exceeded 3. The main reasons for the fines are the inadequacy of the quality control and compliance review of the research reports, the lack of effective management of analysts in serving customers and making public statements, the failure of individual research reports to ensure the compliance of information sources, and the imperfection and implementation of relevant regulations in research reports. Not only the analysts themselves are punished, but also the heads of the research institutes and the companies themselves are often to blame.
From January to March 2024, the cumulative number of fines exceeded 160, including 52 institutional fines and 112 personnel fines, and a total of 168 employees (person-times) were held accountable. The securities companies involved include Haitong Securities, China Merchants Securities, CITIC Securities, Minsheng Securities and Ping An Securities. This year, the sponsorship business has become the focus of supervision.
In addition, penalties for illegal stock speculation are also the focus of the regulatory authorities' rectification, including that in February this year, Han Fei, former vice president of Great Wall Securities, was banned from the securities market for 10 years and fined a total of 117 million yuan for illegally using pseudonyms to hold and trade stocks, and Zhou Jingjie, general manager of a business department of Guotai Junan, was fined 530,000 yuan for using undisclosed information to imply that others were engaged in relevant transactions and illegal stock speculation. A number of employees of China Merchants Securities bought and sold stocks and other violations of laws and regulations, and 63 people were fined more than 80 million yuan.
point of view
●Cheese Fund Investment Manager Hu Kunchao:
Strong growth in innovation ability
High-tech companies are relatively easy to go public
The policy of IPO has been tightened, and it will be relatively easier for those companies with strong innovation ability, high growth and high technical barriers to go public. In addition, the whole chain of IPOs has been tightened, and companies with restricted industries have turned to the Beijing Stock Exchange and the Hong Kong Stock Exchange to seek listing opportunities, providing a financing platform for those smaller enterprises, and the support of funds is conducive to the development and growth of enterprises. On the other hand, it is also a platform for investors in the primary market to exit.
●Wang Jianhui, a senior researcher of industrial economics
Repeated fines may affect the rating of brokers
Penalties imposed on securities firms may have a short-term impact on the relevant business, and if the regulatory handling of fines for an institution is more frequent and concentrated, the degree of impact on the institution's related business may be greater. In addition, repeated fines may have an impact on the rating of the brokerage, and the downgrade of the rating of the brokerage may affect the proportion of the securities investor protection fund of the brokerage, thereby reducing the current profit to a certain extent, and may also have an adverse impact on the brand and business development.
prospect
It is expected in the first quarter of this year
Brokerage investment banking income may drop by 20%
According to the research report of the Xu Kang team of Huachuang Securities in the financial industry, due to the recovery of market trading sentiment in 2023, the rise of the balance of the two financial institutions, and the continuation of a slight decline in the market commission rate in the fourth quarter of the brokerage business, it is expected that the brokerage business income of 43 listed securities companies will decline by about 10% year-on-year, and the credit business income will decline by about 20% year-on-year. In addition, in 2023, the scale of equity underwriting will be under pressure, and the scale of debt underwriting will be relatively stable month-on-month, and the overall investment banking business income is expected to decline by about 21% year-on-year. The overall asset management business revenue is expected to decrease by 1.6% year-on-year.
Due to the large decline in investment banking and investment income, Zheshang Securities said in the research report that it is expected that the annual revenue and net profit of listed securities companies will increase by 2% and 5% year-on-year, of which the performance growth rate in the first quarter of this year is at a low point due to factors such as the policy has not been tightened in the same period last year and the strong money-making effect. It is estimated that in the first quarter of this year, the revenue and net profit of listed securities companies will decline by 10% year-on-year, of which investment banking and investment income will drop by 20% and 30%, and the net income of brokerage, asset management and interest will decrease by 6%, 2% and 8% respectively year-on-year.