IPO Inspection To Relieve Dammed Lake Effect Monthly More Than 10 Projects To Fight "Retreat Drum"

With the promotion of the reform of science and technology innovation board and registration system, the quality control of the IPO sector by the regulators has not been loosened.

According to the statistics of wind data by 21st century economic news reporter, since the regulatory authorities started IPO verification in the early July, no less than 44 IPO companies have "terminated the review" for reasons such as voluntarily withdrawing materials, with an average of 11 projects terminated each month.

In the view of the insiders, the random inspection and verification of the proposed IPO enterprises by the regulators are putting pressure on the declaration of some problematic enterprises. At the same time, some IPO projects are planning to wait for the emergence of new registration system reform windows, such as gem, while admitting that they have problems. Therefore, the current stage chooses to give up actively.

An investment banker close to the regulatory level pointed out that although the registration system reform is expected to speed up the efficiency of IPO audit, it is still necessary for the reporting enterprises to do a good job in internal force, strengthen compliance, and attach importance to the quality of information disclosure, so as to avoid the fluke mentality of going to the market due to the registration system reform window.

IPO "withdrawal" high occurrence period

Since the second half of the year, material withdrawal has become a high incidence phenomenon in the IPO field.

According to the statistics of 21st century economic report, no less than 44 enterprises in the A-share market have "terminated the examination" due to the withdrawal of initial application and other reasons in the four months since July.

In fact, the scale of this "material withdrawal" is not common. According to the statistics of wind, there are only 15 companies that "terminate the review" in the first six months of this year, which means that the number of companies that terminate the review in more than four months since July is nearly three times that in the first half of this year, and 50% higher than that in the same period last year.

In the view of the insiders, this is closely related to the on-site inspection of IPO launched by the CSRC in early July.

On the evening of July 12 this year, the CSRC disclosed that, according to the problem oriented and spot check and drawing, 44 enterprises under review had been arranged to start the on-site inspection recently. Within less than one month of the start of the inspection, no less than 8 enterprises, including puppy electric, new Zhongguan intelligence, huaketai biology, etc., took the initiative to withdraw materials.

From the distribution of material withdrawal enterprises since July, the number of GEM companies accounts for the most, up to 19, and secondly, there are 14, 7, and 4 boards of science and technology, small and medium sized boards, and main boards respectively. From the perspective of industry distribution, the number of companies withdrawing materials from the three industries of the Internet, software and information technology services, and special equipment manufacturing industry has the largest number of households, and 5 of them respectively. In addition, two industries of computer communication and pharmaceutical manufacturing also have 4 withdrawal enterprises.

"The characteristics of these enterprises are relatively light assets, general financial transparency and verifiability, so they may face some more strict inquiries or feedback in the audit process, and some may even encounter on-site inspection." An accounting firm engaged in IPO business said frankly.

However, some insiders believe that in addition to the reasons for on-site inspection, the establishment of science and technology innovation board has also become another reason for the withdrawal of materials enterprises to focus on the present.

"In addition to the inspection, there are reasons such as the establishment of science and technology innovation board, because considering the opening of science and technology innovation board and the pre audit, there are more enterprises to be listed." "But some of them are of average quality, and under the strict auditing standards, some science and Technology Innovation Board companies have to withdraw materials because they are aware that the problems cannot be solved," said a Shanghai investment banker

In fact, some of the IPO companies' withdrawal is not much related to IPO verification. For example, in August 26th, Xiaomi group announced the withdrawal of the application for CDR issued last year, which is related to its relatively sufficient capital.

"At present, the company focuses on business development and has sufficient capital. After careful study and consideration, it has decided to terminate the issuance of main board depository receipts." Xiaomi group announced on the Hong Kong stock exchange.

"Last year, Foxconn and Ningde took the green channel and the CDR policy. From the window, the issuers were not enthusiastic, but in nominal terms, this policy is still effective and applicable." One investment banker close to the regulatory level explained, "on the one hand, Xiaomi's suspension is due to the delay in the window, on the other hand, the current IPO pace is relatively fast, and there are many large lists. Both the policy side and the issuer are not willing to carry out A-share IPO at this point in the CDR project."

Suppress fluke psychology

Although there are different reasons for the "withdrawal of materials", in the view of industry insiders, the on-site inspection conducted by the regulatory authorities still improves the seriousness of IPO audit to a certain extent, and plays an objective role in relieving the pressure of "barrier lake coming back".

Since the first half of the year, the pace of IPO in the stock markets such as the main board and the growth enterprise board has been accelerating. On the one hand, the meeting passing rate has been increasing, on the other hand, the time for enterprises to wait for approval has also been shortened. This regulatory trend has also inspired many IPO companies to come to the "centralized market".

"Some potential issuers have their own problems, but seeing that there are more IPO projects at this time point and the over meeting rate has also increased, they start to apply for listing with the mentality of" try it out and rush to break through this time point. " "A series of on-the-spot inspections and verifications conducted by the regulators have also played an objective role in curbing this fluke mentality of issuers," said the investment bankers close to the regulators

The on-site inspection did play a brake role in the overheating of the issuer's declaration enthusiasm to a certain extent.

In twenty-first Century, economic statistics reporters Wind statistics found that as of the end of June this year, the main board, small and medium board and gem were listed on the market, and the number of listed companies that had been accepted, feedback and pre disclosure had been updated to 449. In the second half of this year, the IPO inspection was launched, and a group of enterprises withdrew material or successfully listed on the "queue". The number of quasi IPO enterprises in the above three big states was cut to 367 by the end of October, and the number of IPO enterprises in the above three situations was reduced to 367.

Nevertheless, the enthusiasm of enterprises for guidance seems not to be fading. According to the data, in the first half of 2019, there were 191 new enterprises in the period of filing and tutoring, while in the four months of the second half of 2019, there were 166 new tutoring enterprises.

It is worth mentioning that the pace of IPO since the fourth quarter seems to have revived. According to the data, the number of IPO companies in October this year reached 35, 10 more than the sum of 25 in August and September.

In the view of the insiders, with the acceleration of the gem registration system reform, the pace of IPO is expected to be further simplified and accelerated, but the strict review of the quality of the proposed IPO enterprises will not be relaxed.

"The pace of issuance of new shares has accelerated after the fourth quarter, which is partly related to the meetings and meetings of some issuers who have completed half a year's report, but the trend of objective issuance is still evolving in a more efficient way." The aforementioned investment bankers close to regulators said, "but in this process, the normative requirements of enterprise quality and information disclosure will not be relaxed. On the contrary, the regulators will also carry out a series of checks, spot checks and on-site inspections to control the entry of IPO. Since the second half of this year, the withdrawal of materials from some enterprises is undoubtedly a corroboration of the strict implementation of the audit standards."