It's about A-shares! What is the impact of the rare change in the IPO?

The country is a through train

2024-05-20 19:37Published on the official account of China News Service "Guoshi Through Train" in Beijing

Text/Chen Kangliang

Since the beginning of this year, a number of China's A-share companies have rarely withdrawn their IPO (initial public offering) applications, which is significantly higher than last year, which has attracted attention.

The number of companies that voluntarily withdrew their IPOs was 1.7 times that of the same period last year

According to data from financial data service provider Wind Information, as of May 19, 144 companies have voluntarily withdrawn their IPO applications this year, including 47 companies on the Shanghai and Shenzhen main boards, 21 on the Science and Technology Innovation Board, 38 on the Growth Enterprise Market, and 38 on the Beijing Stock Exchange; This amount is about 1.7 times that of the same period last year.

Among them, there are many companies that have pressed the "withdrawal button" and have passed the review of the listing review committee of the exchange.

According to a recent announcement by the Shenzhen Stock Exchange, Anhui Jingqi Network Technology Co., Ltd. in the process of reviewing its IPO and listing application documents on the Growth Enterprise Market by the China Securities Regulatory Commission, the company and its sponsor took the initiative to withdraw the registration application documents. It is worth noting that the company has "passed the meeting" as early as 2021.

In addition, Zhejiang Control Valve's GEM IPO in December 2022 passed, and it did not submit for registration for more than a year, and withdrew its IPO in March this year; Boling Electric's GEM IPO in November 2022 passed, but it did not submit for registration for more than a year, and finally withdrew its IPO in March this year.

Zhao Xijun, co-dean of the China Capital Market Research Institute of Chinese University, said in an interview with a reporter from China News Agency that from the perspective of public information, the reason why the above-mentioned enterprises voluntarily withdrew their IPO applications was mainly due to the fact that in the process of IPO self-examination, they found that the company had problems in compliance, sector positioning, information disclosure, accounting treatment, etc., and corrected them in time. The reason why enterprises are so active in self-examination and self-correction on the issue of IPO is closely related to the current atmosphere of "strict supervision" in China's capital market.

Since Wu Qing became chairman of the China Securities Regulatory Commission in February this year, especially since the promulgation of the new "National Nine Articles", "strengthening the foundation and strict supervision and management" has become the regulatory tone of China's capital market.

After taking office, Wu Qing stressed on many occasions in public that listed companies are the foundation of the market and the source of investment value, and it is necessary to further promote the improvement of the quality of listed companies.

At the past "5.15 National Investor Protection Publicity Day" event, Wu Qing once again spoke: from the "entrance" of listed companies to continuous supervision, and then to the "export", more stringent institutional arrangements are being established. The purpose is to resolutely keep counterfeiters out, implement the requirements of openness and transparency in the whole process of corporate information disclosure, integrate the concept of respecting investors and rewarding investors into various mechanisms of corporate governance, and resolutely remove "zombie enterprises" and black sheep from the market.

The latest policy comes from the Guidelines for the Application of Regulatory Rules - Issuance No. 10 issued by the China Securities Regulatory Commission on May 15, which requires issuers to publish a statement to investors in the prospectus, improve the information disclosure rules for post-listing dividend policies, and strengthen the disclosure of relevant information of unprofitable enterprises.

Zhao Xijun said that because the regulator will run the tone of "two strong and two strict" through the whole process of enterprise issuance and listing supervision, and continue to do a good job in IPO supervision, listed company supervision, and delisting supervision, this to a certain extent forces companies to be listed to seriously carry out IPO self-examination and self-correction, effectively curbing the behavior of "breaking through with illness" and speculative listing.

Marco Polo was deferred

It is worth noting that this tone of "strict supervision" is also reflected in the Marco Polo project. As the first project to be listed after the promulgation of the new rules on issuance and listing, Marco Polo's IPO has attracted widespread attention in the market.

On April 30, the Shenzhen and Shanghai Stock Exchanges officially issued the revised "Stock Issuance and Listing Review Rules" and other business rules to improve the financial conditions for listing on each sector and further clarify the positioning requirements of the sector.

The Listing Committee of the Shenzhen Stock Exchange held a meeting on May 16 to consider Marco Polo's IPO application and make a decision to suspend the review.

The relevant person in charge of the Shenzhen Stock Exchange said that the listing committee's suspension of the review of Marco Polo's listing application is mainly due to the actual situation of the company's operating income and profit during the reporting period, and it is necessary to further confirm whether the uncertain factors affecting performance have been eliminated on the existing basis.

According to public information, Marco Polo focuses on the research and development, production and sales of architectural ceramics, and is one of the largest manufacturers and sellers of architectural ceramics in China. From 2021 to 2023, Marco Polo's operating income will be 9.365 billion yuan (RMB, the same below), 8.661 billion yuan, and 8.925 billion yuan, and the net profit will be 1.653 billion yuan, 1.514 billion yuan, and 1.353 billion yuan respectively.

Marco Polo said that because the company's downstream real estate is greatly affected by macroeconomic and policy regulation, if there are major adverse changes in the macroeconomic environment or the competitive environment in which the company is located, it may affect the stability of the company's product prices and operating performance, and the company's operating profit has the risk of further decline.

Some market participants believe that Marco Polo's main business is building ceramics, combined with the company's industry and its own operating conditions, made a decision to suspend the review, and further assess the stability of the issuer's operating performance in the subsequent period, which not only reflects the pragmatic attitude of seeking truth from facts and objectively treating the application for corporate issuance, but also shows the firm determination to conscientiously implement the new "National Nine Articles", strictly control the issuance of access in accordance with the law, improve the quality of listed companies from the source, and better protect the legitimate rights and interests of investors.

In response to the stricter IPO supervision, Dong Zhongyun, chief economist of AVIC Securities, said that this will not only help optimize the allocation of resources, but also promote the proposed listed company to carefully consider the timing and scale of financing by adjusting the pace of IPO, avoid excess or insufficient market liquidity, and realize the effective allocation of capital; It also helps to improve the quality of listed companies, strictly review the companies planning to IPO, and help screen out companies with more development potential, thereby improving the overall quality of listed companies; In addition, it can also stabilize the sentiment of the secondary market, avoid market fluctuations caused by a large number of new listings in a short period of time, and maintain market stability.

Looking forward to the future, Wang Yi, chief economist of Great Wall Securities, believes that with the continuous implementation of policies, a new ecology of the A-share IPO market will gradually take shape, which will not only help optimize the interaction between the primary and secondary markets, improve the overall quality and efficiency of the capital market, but also create a safer and more transparent investment environment for investors. In the long run, it will also promote the sustained prosperity and stable development of the capital market and better serve the high-quality development of the real economy.

Source: The country is a through train

Editor: Zhuge Ruixin

Editor-in-charge: Wei Xi

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