Producer: Sina Finance Listed Company Research Institute
Author: IPO Refinancing Group/Zheng Quan
In April, A-share IPOs once again appeared "0 meetings" and "0 acceptances". From January to April this year, only 2 IPO applications were accepted in A-shares, both of which came from the Beijing Stock Exchange.
In terms of withdrawal, a total of 48 A-share companies terminated the IPO process in April, and a considerable number of companies did not meet the latest listing standards. From January to April this year, a total of 132 A-share IPOs were withdrawn, and CITIC Securities topped the list with 14 withdrawals.
At the level of issuance and fundraising, only 5 companies were successfully listed in April, raising a total of 2.705 billion yuan, a decrease of 54.15% from March. From January to April this year, a total of 35 A-share companies were listed, raising a total of 26.324 billion yuan, and the number of issuances and the total amount of funds raised decreased by 66.02% and 77.13% respectively compared with the same period last year.
(1) IPO termination: Huaxi Securities' rejection rate is as high as 75% Behind the suspension of sponsorship qualifications is the lack of internal control
In April, a total of 48 A-share IPO projects were withdrawn, of which CITIC Securities had the largest number of withdrawn projects, with 7.
Among the 48 companies that withdrew their IPOs, some of them did not meet the latest listing conditions. For example, Changchun Jieyi Automobile Technology Co., Ltd. (Jieyi Technology), Guangzhou Ruxing Technology Co., Ltd. (Ruxing Technology), Weichai Lovol Smart Agricultural Technology Co., Ltd. (Weichai Lovol) and other companies, the huge dividends during the reporting period may be the most important reason for the termination of the IPO process.
The latest regulations of the Shanghai and Shenzhen Stock Exchanges: the cumulative dividend amount in the three years of the reporting period accounts for more than 80% of the net profit in the same period; or enterprises with a cumulative dividend amount of more than 50% of the net profit in the same period and a cumulative dividend amount of more than 300 million yuan, and a total proportion of replenishment and loan repayment in the raised funds is higher than 20%, will not be allowed to issue and go public.
From 2020 to 2022, Jieyi Technology achieved net profit attributable to the parent company of 287 million yuan, 333 million yuan and 199 million yuan respectively, with a total of 819 million yuan. In 2021 and 2022, the cash dividends of Jieyi Technology will be 480 million yuan and 298 million yuan respectively, totaling 778 million yuan, which will exceed the net profit of the year, which is 95% of the sum of the net profit of the three years from 2020 to 2022, far exceeding the audit standard of 80%.
In addition, Jieyi Technology has also been questioned by many mainstream media as borrowing money for dividends. After the cash dividend of 480 million yuan in 2021, the monetary funds of Jieyi Technology at the end of 2021 decreased by 507 million yuan compared with the end of 2020, leaving only 83 million yuan, and the company's interest-bearing liabilities at the end of 2021 The company's interest-bearing liabilities at the end of 2021 (short-term borrowings, non-current liabilities due within one year, long-term borrowings, and bonds payable) increased by 29 million yuan compared with 0 yuan at the end of 2020. After the cash dividend of 298 million yuan in 2022, the interest-bearing liabilities of Jieyi Technology at the end of 2022 were 432 million yuan, an increase of 1389.65% from the end of 2021.
According to the prospectus, the actual controllers of Jieyi Technology are Zhou Lixin and Wang Chao, mother and son, and the two directly and indirectly control 100% of the company's equity. This means that nearly 800 million yuan in cash dividends basically flowed into the pockets of the mother and son of the actual controller.
From 2020 to 2022, Ruxing Technology will pay a cumulative cash dividend of 475 million yuan, exceeding 300 million yuan and exceeding 50% of the net profit in the same period; The company plans to raise 1.5 billion yuan, of which the amount of supplementary liquidity is 481 million yuan, accounting for 32% of the total amount raised, exceeding the 20% review red line.
Weichai Lovol is a subsidiary of Weichai Power, an A-share listed company. In this IPO, Weichai Lovol plans to raise 5 billion yuan, of which 1 billion yuan will be used to supplement liquidity, which has just touched the red line of 20%. From 2020 to 2022, Weichai Lovol achieved net profit attributable to the parent company of 81 million yuan, 1.231 billion yuan and 769 million yuan respectively, with a cumulative total of 2.081 billion yuan. During the reporting period, the company's total cash dividends were 1.32 billion yuan, more than 50% of the total net profit of the current period.
There are also some IPO companies that do not meet the latest listing performance indicators, such as Guangdong Gaoyi Packaging Technology Co., Ltd. (Gaoyi Packaging). From 2020 to 2022, Gaoyi Packaging achieved net profit attributable to the parent company of 80 million yuan, 76 million yuan and 91 million yuan respectively, and the net profit in the last year of the reporting period did not reach 100 million yuan.
The latest version of the listing conditions of the main board of Shanghai and Shenzhen are: the net profit in the last three years is positive, and the cumulative net profit in the last three years is not less than 200 million yuan, the net profit in the last year is not less than 100 million yuan, and the cumulative net cash flow generated by operating activities in the last three years is not less than 200 million yuan or the cumulative operating income is not less than 1.5 billion yuan.
Wind shows that from January to April this year, a total of 132 A-share companies terminated their IPO applications. Among them, CITIC Securities has the highest number of withdrawn projects, with 14; The number of withdrawals from China Securities Construction Investment, CICC, Haitong Securities, Huatai United and Kaiyuan Securities was 10, 9.5, 8, 7 and 7 respectively, ranking 2-6.
In the first four months of this year, some brokerages withdrew a large number of IPOs, resulting in 0 or only 1 IPO projects under review. For example, the revocation rate of Pacific and Kyushu Securities has been as high as 100% since the beginning of this year, the revocation rate of Zhongyuan Securities is as high as 80% (5 withdrawals and 4 withdrawals), and the withdrawal rate of Huaxi Securities is 75% (4 withdrawals and 3 withdrawals).
Among them, Huaxi Securities was recently suspended from sponsorship for 6 months. Huaxi Securities was suspended by the Jiangsu Securities Regulatory Bureau for 6 months due to problems such as failure to be diligent in due diligence in the implementation of Jin Tongling's 2019 private placement sponsorship project, false records in the sponsorship letter for the issuance of shares to specific targets, false records in the relevant reports issued during the continuous supervision stage, and inadequate implementation of on-site inspections for continuous supervision.
From 2017 to 2022, the amount of inflated or inflated profits of Jin Tongling accounted for 103.06%, 133.10%, 31.35%, 101.55%, 5774.38% and 11.83% of the company's total disclosed profits in each year.
In fact, Huaxi Securities' failure to fulfill its sponsorship responsibilities on the Jin Tongling project is only a microcosm of the company's investment banking business. In recent years, Huaxi Securities has frequently received fines for investment banking business, among which the lack of effectiveness of internal control is the deep-seated reason for the heavy fines.
In 2023, the China Securities Regulatory Commission (CSRC) will carry out special on-site inspections on the internal control of investment banking business and integrity practice of securities firms such as Huaxi Securities. The on-site inspection found that Huaxi Securities had insufficient independence of internal control, the senior executives in charge of the quality control department served as the sponsor representative of the IPO project and participated in the quality control approval, the internal control part of the opinions were not replied to, not implemented or revised and submitted to the outside without kernel, the quality control on-site inspection was insufficient, and some investment banking projects hired a third party did not strictly perform the compliance review.
The personnel involved in quality control, that is, the first line of defense of the internal control of the investment bank, participate in the work of the second and third lines of defense, indicating that the independence of Huaxi Securities' investment banking business is insufficient.
At present, there is only one IPO company in the queue of Huaxi Securities for review, Chengdu Jiachi Electronic Technology Co., Ltd. (Jiachi Technology). Jiachi Technology submitted its registration application on March 22, 2024, but due to the suspension of Huaxi Securities' sponsorship qualifications, it will not be known until 6 months before Jiachi Technology can be successfully approved and listed.
According to the prospectus, one of the shareholders of Jiachi Technology is called Gaotu Yida, with a shareholding ratio of 3%. According to a number of media reports, there are influential shadow shareholders behind Yida Capital, and a number of IPO companies in which it participates have been pressed the pause button by the exchange.
(2) Issuance and listing: Hongxin Technology's actual fund-raising amount "broke bones" Caitong Securities' fee rate was as high as 11.5%
Wind shows that only 5 A-share companies were successfully listed in April, raising a total of 2.705 billion yuan, down 54.15% from March.
Among the five newly listed companies, the actual amount of funds raised by Zhongrui shares is the highest, which is 800 million yuan; Wuxi Dingbang raised 178 million yuan, ranking at the bottom.
Interestingly, the price-earnings ratios of the five IPO companies are lower than the industry average, and the actual amount of funds raised is less than expected.
Wind shows that Hongxin Technology is expected to raise 855 million yuan, and the actual fundraising ratio is 394 million yuan, and the actual fundraising ratio is 46.07%, less than 5%.
Although Hongxin Technology's actual fundraising is insufficient, the fee rate of Caitong Securities, the sponsor brokerage, is not low, with an underwriting and sponsorship fee of 45.283 million yuan, and the expense ratio is as high as 11.5%, which is higher than the expense rate of Wuxi Dingbang (7.19%), which only raised 178 million yuan. In practice, the smaller the amount of funds raised, the higher the average commission rate.
In April, all five new stocks rose on their first day of listing, with an average increase of 145%. Among them, Hongxin Technology rose 238.16% on the first day of listing, the highest increase among the five companies.
Some investment bankers believe that now that IPOs are tightened, new shares have become very scarce, and the price-to-earnings ratio of the issue is low, so it is more common for the stock price to soar on the first day of new stock issuance. However, some investors believe that the logic of "new stocks must rise" should be broken, and the lack of new shares does not mean that it has investment value, and the low price-earnings ratio does not mean that it must skyrocket.
(3) Ranking of sponsor brokers: the underwriting amount of China Securities Construction Investment fell by 95.86% year-on-year
Wind shows that from January to April this year, a total of 35 A-share companies were listed, raising a total of 26.324 billion yuan, and the number of issuances and the total amount of funds raised decreased by 66.02% and 77.13% respectively compared with the same period last year.
In the first four months of this year, Huatai jointly underwrote the largest amount of 26.324 billion yuan, which was 5.367 billion yuan, and CITIC Securities, Minsheng Securities, China Merchants Securities, and Haitong Securities ranked second to fifth, with underwriting amounts of 5.066 billion yuan, 2.777 billion yuan, 1.892 billion yuan, and 1.529 billion yuan respectively.
来源：wind
In the first four months of this year, the trend of IPO slowdown was obvious, and the underwriting volume of some large and medium-sized investment banks fell sharply. In the first four months of this year, the IPO underwriting volume of CITIC Securities, Haitong Securities, China Securities Construction Investment, Guojin Securities and Industrial Securities decreased by 80.78%, 84.99%, 95.86%, 85.66% and 89.62% respectively year-on-year.
In particular, it is worth noting that China Securities Construction Investment, which saw the largest decline, had an underwriting volume of 19.126 billion yuan in IPO projects and an underwriting sponsorship income of 887 million yuan in the first four months of last year. In the first four months of this year, the IPO underwriting volume of China Securities Construction Investment was 792 million yuan, a year-on-year decrease of 95.86%; The underwriting and sponsorship income was 68 million yuan, a year-on-year decrease of 92.36%.
Since the beginning of this year, the IPO underwriting volume of China Securities Construction Investment has dropped sharply, which is related to the general environment on the one hand, and on the other hand, it may be related to the company's frequent involvement in fraudulent issuance cases. According to the data, China Securities Construction Investment was deeply involved in the fraudulent issuance of amethystum storage, and recently was involved in the fraudulent issuance of 5 Evergrande bonds and 3 fraudulent issuance of Hongxiang shares, and the practice quality of the company's investment banking business has been questioned.