As of the end of July this year, a total of 145 domestic IPO companies have failed, of which 133 have voluntarily withdrawn their IPO applications.
Why did these companies voluntarily withdraw their IPO applications?
Huayixin believes that there are four main reasons: first, the performance of enterprises may decline due to the market environment in the process of operation, so as to not meet the listing requirements under the registration system; Second, the positioning of the plate is not accurate at the time of application, and the withdrawal is for the purpose of transferring the board and re-declaring; Third, there are various problems in the application materials that are difficult to solve, and the standard cannot be met through rectification in the short term; The last point is that many companies take advantage of loopholes, delusionally want to "break through with illness", and quickly withdraw after the CSRC clearly turned on the red light, and hasty things are done.
[Case].
On August 29, the major shareholder of Zhongrong Trust, Jingwei Textile Machinery (000666SZ) disclosed a surprising announcement, announcing that it intends to voluntarily withdraw the company's listing and trading on the Shenzhen Stock Exchange. The move sparked heated discussions.
According to the announcement, the reason for the voluntary delisting of warp and weft textile machinery is mainly due to market changes that have had a significant impact on the company's operation, and the operation is facing major uncertainties. Warp and weft textile machinery is a leading enterprise in the textile machinery industry, and its products cover many fields such as textile machinery, textile machinery accessories, and textile equipment. In recent years, with the rapid development of the textile machinery industry, the performance of warp and weft textile machinery has been outstanding. However, affected by changes in the macroeconomic environment and intensified competition in the industry, the company's performance has gradually declined. The company said that in order to better protect the interests of investors, it decided to take the initiative to delist in order to enhance the liquidity of the company and improve the company's governance level.
[Case].
Shanda Technology, the road to listing is quite tortuous. Finally, it will be listed on NASDAQ through SPAC on March 9, 2023.
It was listed on the Hong Kong Stock Exchange in 2014 as Shengshi Dailian, and then submitted a prospectus on the Hong Kong Stock Exchange twice in 2018 and 2019, intending to be listed on the "**h"; In March 2019, he passed the hearing of the Hong Kong Stock Exchange and obtained *** original *** 01879HK), and then launched an IPO, which could raise up to about 13HK$1.3 billion. It stopped on the eve of its listing, saying it was concerned about the Science and Technology Innovation Board; The signing of an A-share listing counseling agreement with China Securities Construction Investment in the same month was terminated in November 2020.
Commenting on Shanda Technology's hesitation in the selection of listing destinations, Huayixin believes that the company's long time of hesitation between A-shares and Hong Kong stocks, and finally chose to successfully list on NASDAQ, reflects their lack of clarity in the positioning of listing destinations. If a company had a clear vision of its goals from the start, it wouldn't have been moving between different markets for 10 years.
This behavior also shows the dynamics and a certain degree of hesitation on the part of Shanda Technology in choosing a listing location. It may imply that Shanda Technology may face complex factors such as the assessment of the strengths and weaknesses of different markets, legal and regulatory requirements, investor preferences, and market pricing in the market selection process. In the face of these uncertainties and challenges, companies may need to define their goals and expectations of the market more clearly in order to make more informed decisions
In February this year, the China Securities Regulatory Commission issued the "Implementation Measures for Fraudulent Issuance and Listing" (Trial), which stipulates that if the issuer conceals important facts or fabricates material false content in the prospectus and other issuance documents, and has been issued and listed, the China Securities Regulatory Commission may order the issuer to repurchase the fraudulent issuance in accordance with the law, or order the responsible controlling shareholder and actual controller to buy back.
Also, it was mentioned in the previous article. When the company completes the prospectus, it will hire a professional accounting firm to conduct due diligence on the company's financial situation and write financial reports, and submit them to the China Securities Regulatory Commission and the corresponding exchange for review. However, if there is a financial problem after receiving the CSRC filing application, it will lead to subsequent amendments and re-submission for review, because in the process of IPO, the effective period of the financial statements is only 9 months, if there are still problems after re-revision within 9 months, it is necessary to re-hire an accountant to make financial reports. Re-hiring an accounting firm and making multiple revisions to financial reports requires an investment of money and time, which is a significant cost for businesses
Therefore, in this case, if the enterprise knows that its performance is not good or the application materials are not up to standard, it is better to take advantage of the trend and "exit halfway" than to get through the test by chance. After withdrawing the application, you can find the gaps and make up for the shortcomings more calmly.
[Case].
On July 26, 2021, the Shenzhen Stock Exchange issued the "Decision on Giving Notification and Criticism to Guangdong Yongsheng Animation Co., Ltd.", determining that in the process of issuing and listing applications, Yongsheng Animation had violations, and the company and its sponsor representatives received administrative supervision measures from the Shenzhen Stock Exchange.
At the same time, the regulator has also strengthened the supervision of the project from the institutional level. In July 2021, the China Securities Regulatory Commission issued the "Guiding Opinions on Urging ** Companies to Engage in Investment Banking Business under the Registration System", which clarified that the on-site inspection and supervision scope will be further expandedAdhering to the principle of "declaration is responsibility", the CSRC and the exchange will organize verification in accordance with the law for projects withdrawn after receiving on-site inspection or supervision notices
To sum up, Huayixin believes that the voluntary withdrawal of IPO applications by enterprises is a kind of "retreat as advance" thinking, which is a kind of self-reflection behavior of the enterprise itself, and it is also responsible for the capital market and investors. Only by handing over a real listed company to investors can the company promote high-quality development after it is listed, and the capital market will move towards a more market-oriented and law-based direction.