Author丨Cui Wenjing
Editor丨Wu Yanling
Figure source丨Figure worm
The IPO market is still navigating the winter.
According to Wind, as of April 28, the number of projects withdrawn during the year reached 122, 28 more than the same period last year. Among them, the most obvious increase was in the number of withdrawn projects, with 118 projects withdrawn during the year, 42 more than the same period last year.
Echoing the significant increase in the number of withdrawn companies is the sharp decline in the number of new IPOs. From January 1 to April 28, there were 35 newly listed companies in A-shares, only 33.98% of the same period last year and 29.66% of the same period last year.
For investment banks and companies planning to IPO, the current days are quite difficult.
Since the beginning of this year, the number of newly listed companies, withdrawn projects, and newly accepted enterprises have all shown the same fact: the pace of IPO listing has slowed down significantly, and the difficulty of listing has increased significantly. However, the new "National Nine Measures" and its supporting policies have clarified that the listing threshold of the Shanghai and Shenzhen stock exchanges has been raised, so that more companies have been forced to terminate the IPO process.
A number of interviewed insurance agents told the 21st Century Business Herald reporter that due to the improvement of listing standards such as financial indicators and plate attributes, a large number of companies planning to IPO were persuaded to withdraw, and most of them did not quickly submit applications for withdrawal materials, but queued up first and waited for the right time before withdrawing. On March 15, the China Securities Regulatory Commission (CSRC) clarified that "the coverage rate of on-site inspections shall not be less than one-third of the companies to be listed", which has become a major reason why many enterprises and investment banks choose to withdraw their projects.
In fact, for investment banks, compared with the increase in the number of withdrawn companies and the decrease in new stock IPOs, what makes them more troublesome is that the acceptance of enterprises is almost zero. During the year, the Shanghai and Shenzhen Stock Exchanges accepted zero enterprises, and the Beijing Stock Exchange only accepted 2 new enterprises, compared with 39 enterprises in the same period last year.
A number of interviewed insurance agents revealed that no new projects were accepted, which means that investment banks cannot enter enterprises to conduct business. At present, many investment bankers have no projects to do, and from "can't go home every day on a business trip" in previous years to "go to the company every day to punch in every day". In the long run, the only thing that awaits investment banks is layoffs.
There is also a queue to withdraw materials
Looking at the IPO situation during the year, the sharp decline in the number of newly listed companies and the sharp increase in the number of withdrawn enterprises are two typical characteristics.
According to Wind, as of April 28 (the same below), there were only 35 newly listed companies in the year, compared with 159, 118 and 103 in the same period from 2021 to 2023, respectively, and the number of new IPOs this year is only equivalent to 22.01%, 29.66% and 33.98% of the past three years.
Last year, the "827 New Deal" made it clear that the Shanghai and Shenzhen stock exchanges were tightening the pace of IPOs in stages, but judging from the current number of newly listed companies, the Beijing Stock Exchange has also slowed down significantly. During the year, there were 9 newly listed companies on the Beijing Stock Exchange, a significant decrease of 68.97% from 29 in the same period last year, while the year-on-year declines on the main board, ChiNext and Science and Technology Innovation Board were 66.67%, 56.52% and 72.22% respectively.
Behind the sharp decline in the number of newly listed companies is a significant increase in the number of companies that have withdrawn from the company.
A number of interviewed insurance agents told reporters that since last year's "827 New Deal", many insurance agents have been advised to withdraw materials, due to the large number of projects that need to be withdrawn, the withdrawal of materials is not like in 2020 1-3 trading days can be carried out, but to communicate first, wait for the right time to submit the withdrawal application.
"Now the supervision is cracking down on 'one inspection and withdrawal', not only the withdrawal materials are correct, but also the investment bank will be extended to the inspection. Therefore, only when the insurance agency and the enterprise fully communicate before submitting the withdrawal materials can it be 'smoothly implemented'. There is a guarantee agency revealed.
Some insurance agents said that it is precisely because the insurance agents tacitly control the rhythm of withdrawing materials, judging from the current IPO withdrawal data, although there is an increase compared with previous years, the difference is not huge.
Wind data shows that from January 1 to April 28, a total of 122 A-share projects were withdrawn, 28, 31 and 20 more than the same period in 2023, 2022 and 2021, respectively. Among them, the number of rejected projects has decreased rather than increased, and the increase in withdrawn projects is mainly due to the large increase in withdrawn projects. As of April 28, a total of 118 projects were withdrawn during the year, a year-on-year increase of 55.26%, and double compared with the same period in 2022.
It is worth noting that with the introduction of the new "National Nine Articles" and the new IPO regulations on April 12, the listing threshold of the Shanghai and Shenzhen Stock Exchanges has been further raised, which will make more companies planning to IPO unable to meet the new listing standards, and such companies will also join the ranks of the withdrawal of materials one after another.
How big is the impact of the new listing standard? In terms of GEM, according to the new IPO regulations, the first set of listing standards adds a requirement that the net profit in the latest year is not less than 60 million yuan, and the second set of listing standards has increased the operating income in the latest year from "100 million yuan" to "400 million yuan". Among the 34 GEM projects that were withdrawn during the year, 16 had an operating income of less than 400 million yuan or a net profit of less than 60 million yuan, accounting for 47.06%.
In terms of the main board, according to the calculation of the first set of listing standards with a net profit of not less than 100 million yuan in the latest year and the third set of listing standards with an operating income of not less than 1 billion yuan in the latest year, among the 40 main board companies that withdrew during the year, 21 had an operating income of less than 1 billion yuan or a net profit of less than 100 million yuan in the latest year, accounting for 52.50%.
According to the interviewee, in addition to the financial indicators listed in the new IPO regulations, traditional industries such as declining profits, large dividends before IPO, and consumer products are also the focus of current persuasion. At the same time, enterprises that meet the characteristics of steady increase in revenue and net profit in terms of operation and far exceeding the listing standard line, belonging to science and technology enterprises, especially hard technology enterprises, moderate in the early stage of dividends and formulating a clear post-listing dividend plan, good compliance and risk control, and rarely receiving fines, can now promote the IPO process more smoothly.
Investment bankers "have nothing to go out of"
On May 10 this year, the 20th anniversary of the registration of the first batch of insurance agents in mainland China is about to expire. In the past 20 years, the pace of mainland IPOs has slowed down or even paused several times, and the last large-scale slowdown occurred in 2013, when there were only two listed companies.
The person in charge of the equity business of a brokerage company with nearly 20 years of experience in insurance agency told reporters that compared with the slowdown in the pace of IPOs in previous years, the biggest headache for it is that the acceptance of new projects is almost suspended.
According to Wind, as of April 28, the Shanghai and Shenzhen Stock Exchanges have accepted zero since the beginning of the year, and there are only 2 new projects accepted by the Beijing Stock Exchange. In the same period of 2023, there will be 39 new A-share projects, and 63 in 2020, when the number of projects is larger.
What does it mean that the number of accepted projects has dropped sharply?
According to the interviewed, first of all, the current investment banks generally do not dare to submit prospectuses, due to the very small number of new projects and the proportion of on-site inspections is not less than one-third, the current new projects are likely to be strictly inspected.
Second, without new projects, investment banks will not be able to carry out new IPO business, and if there are no projects under review, investment banks will basically have nothing to do. Due diligence is one of the most important and time-consuming parts of the IPO business of investment banks, and the premise of entering the market is to formulate a clear IPO promotion schedule. This also means that if the investment banking team does not have a project under review, it has little to do at the moment.
In addition to the projects that have been suspended, according to Wind, there are currently 161 companies that are normally advancing the IPO process, and the number is above 500 in the same period from 2020 to 2023, and the maximum number will reach 597 in 2021. Among the only 161 IPO companies that are currently progressing normally, only 85 have updated their listing process during the year, accounting for 52.80%.
Affected by this, nothing can be wrong, which has become the current work norm for most investment bank IPO practitioners. As a result, a situation that was unimaginable in the past has generally appeared in various investment banks: investment bankers who used to have almost no time to go to the company due to too many business trips are now required to clock in to the company every day, and some people are even fired because they are not qualified. After punching in, many investment bankers have no substantive work to do, so they can only repeatedly study policies, meeting materials, and past cases;
Moreover, many investment bankers have become Buddhists and are waiting to be laid off with the attitude of "being a monk for a day and hitting the clock for a day". "There are basically no investment banks hiring now, and unless personal resources are very abundant, being laid off at this time is almost equivalent to losing your job. Although the salary has been reduced again and again, basically no one has resigned, and everyone is waiting to be laid off and receive compensation. For brokers, if the pace of IPO listing cannot be restored for a long time, the redundant burden of personnel of investment banks will be unbearable, and layoffs will almost become inevitable. The interviewed insurance agent said bluntly.
Baodai's predicament has even affected headhunters. Investment bank IPO practitioners have not been massively laid off, and many of the headhunters who used to be responsible for investment bank recruitment have lost their jobs.
"'Yesterday' was still helping people recruit, and 'today' I have been laid off. When investment banks generally no longer have recruitment needs, headhunters lose their value. The brokerage firm where the investment bank is located has strong economic strength and can stand up, but the private company where the headhunter is located cannot bear it. A headhunter said helplessly, "Who would have thought that the first batch of people who lost their jobs due to the slowdown in the pace of IPOs were actually our headhunters?"
SFC
Editor: Jin Shan, Intern: Su Jinyi
A number of robot companies have withdrawn their IPOs!
It's about the IPO, and another blockbuster document has been released
100% of the lottery should be checked, without prior notice!