IPO prospectus is required to be rewritten? Such cases were unheard of before, but have now become a reality. According to media reports, since September this year, three companies, such as Longda Shares, Jingsong Intelligent and Yonyou Automobile, which are planning to be listed on the Science and Technology Innovation Board, have been asked by the audit department of the Shanghai Stock Exchange to rewrite some chapters of the prospectus during the first round of IPO inquiries. Personally, I think that the IPO company prospectus is required to be rewritten, which is the fundamental embodiment of the "internal strength" of the securities company's investment bank.
Two of the three companies were asked to rewrite the "Business and Technology" chapter. For example, the first inquiry response disclosed by Longda Shares shows that the first question of the SSE is to require the company to rewrite the "Business and Technology" chapter so that the relevant content in the chapter matches the structure of the issuer's product sales revenue to objectively reflect the issuer's business situation. In terms of Jingsong Intelligence, due to the insufficient description and insufficient prominence of the intelligent logistics software system involving the main source of income of the enterprise, it was also required by the Shanghai Stock Exchange to rewrite the "Business and Technology" chapter.
In another enterprise, Yonyou Automobile, because the issuer and the sponsoring institution did not conduct a detailed analysis of the reasons for revenue growth, as well as the analysis of cost changes, and did not disclose the changes in the volume and price of each project under the software development and service business and the reasons for the analysis of fluctuations, the SSE requested it to rewrite the contents of relevant chapters such as "Operating Income Analysis" and "Operating Cost Analysis".
The sponsors involved in this time include Guosen Securities, Huaying Securities, Huaan Securities and Guotai Junan Securities, among which there are many leading brokers. For the prospectus, the regulatory authorities have already disclosed the relevant content and format. For the writing of related content, there are already requirements. However, even the head broker, even if it is a low-level mistake, it is indeed worth pondering in the brokerage industry.
Although the prospectus of the proposed IPO company mainly serves the listing of the enterprise, it can also reflect many problems through the prospectus.
The prospectus is an important window for investors to understand a company to be listed, and it is also an important basis for the research department of the securities company to write a research report. How well the prospectus is written is actually related to the interests of many parties. At the very least, for these three proposed IPOs, if the relevant chapters are not rewritten, their IPO journey will not be smooth, and may even lead to the withdrawal of application materials. Therefore, the importance of writing a good prospectus is also self-evident.
The quality of the prospectus is objectively related to the quality of the issuer's information disclosure. All three enterprises are planning to be listed on the Star Market, and the Star Market has started a pilot registration system, the core of which is the information disclosure of the issuer. If the information disclosure is not passed, the registration system pilot will be discounted invisibly. Moreover, for the sci-tech innovation board that has opened the registration system pilot, it is more necessary for the issuer to present a comprehensive and transparent enterprise in front of the market, which also puts forward different requirements for the quality of its prospectus.
The quality of the prospectus is also a major indicator to measure the practice quality and practice level of a securities company's investment bank. For brokerage investment banks, writing a qualified prospectus is obviously the most basic requirement. If even the prospectus is not written well, the quality of the sponsorship of such a brokerage investment bank is obviously questionable.
The prospectus is actually also related to the quality of listed companies. Many companies in the A-share market can achieve listing through fraudulent issuance and financial fraud, and the prospectus has become the most important "carrier" among them. Like a fraudulent issuer, if the prospectus truthfully discloses information, it is impossible to break through the barrier successfully. Moreover, as long as there is no information that should be disclosed but is not disclosed in the prospectus of the proposed listing, then some enterprises are unlikely to enter the capital market. In this sense, the quality of the prospectus writing will also have an impact on the quality of the listed company.
The three enterprises to be listed were required by the Shanghai Stock Exchange to rewrite the relevant chapters of the prospectus, which is also a concrete manifestation of the sponsoring institution's failure to practice "internal skills". Writing a good prospectus is the basic skill of a brokerage investment bank, and it is also a hurdle that it must pass. Therefore, for securities investment banks, it is necessary to practice "internal strength" in order to provide services for the market and have a basis for obtaining benefits from the market.
Personally, I think that the Shanghai Stock Exchange only requires the relevant securities companies to rewrite the prospectus, and such a "penalty" is obviously light. In order to achieve the effect of setting an example, it is necessary to take certain regulatory measures against sponsors and issuers that are not well-written in prospectuses, such as rewriting prospectuses and restarting the IPO queue. In particular, the penalty of requeueping is personally thought to be extremely lethal. At the very least, the listing process will be delayed and the cost of listing will increase significantly. In this way, will issuers and securities investment banks still not pay attention to prospectuses?