25 Companies Terminated IPO Audit Within Two Months Of The Science And Technology Innovation Board, And The Number Of Companies Voluntarily Withdrawing Materials Exceeded That Of The Whole Year Of 2019

The termination of IPO audit on the science and technology innovation board is frequent.

After three companies announced the termination of the IPO audit of the science and technology innovation board within one day on December 8, 2020, the audit status of three more science and technology innovation board IPO companies changed to terminate on the same day on January 25, 2020.

According to the statistics of 21st century economic report, 25 companies have announced the termination of IPO audit of the science and technology innovation board in December 2020 and January 2021, and only 23 companies in the whole year of 2019. In the first 11 months of 2020, a total of 26 companies terminated the audit.

Why is the recent termination of IPO audit on the science and technology innovation board frequent? For a while, the market began to discuss whether the registration system should be strictly issued.

Termination of IPO audit

According to the review data of the sci tech innovation board project of Shanghai Stock Exchange, the reporter found that in December 2020, there were 15 IPO companies on the science and technology innovation board which were dynamically updated as "terminated". In January 2021, there were not a few cases of termination of audit. As of January 31, 10 companies announced "termination".

Within two months, the number of companies whose IPO audit has been terminated by the science and technology innovation board has reached 25, which has exceeded the level of the whole year of 2019. In addition, 21st century economic reporter found that the cases of termination of audit in the past two months were "voluntary withdrawal".

In terms of the scale of fund-raising, the total amount of funds to be raised by 25 IPO companies on the science and technology innovation board is 21.295 billion yuan, with an average of 852 million yuan.

Among them, Qingdao zhongjiate Electric Co., Ltd. plans to raise the largest amount of capital, which is 2.502 billion yuan, followed by Tianshi biology, which plans to raise 2.426 billion yuan. There are 5 other companies that plan to raise more than 1 billion yuan, namely Ruixin micro (1.347 billion yuan), Zhengji Pharmaceutical (1.144 billion yuan), jiangeng medicine (1.143 billion yuan), Zesheng Technology (1.5 billion yuan) and Yiteng Jingang (1.316 billion yuan); There are also two companies to raise 1 billion yuan, namely Shanghai Hejing and zhongkejing. Kangdai intelligent plans to raise the least amount of funds, 270 million yuan.

According to the audit process, three companies withdrew their applications voluntarily before issuing a reply letter. For example, Longxun shares, the company's sponsor is Hua'an securities, which plans to raise 315 million yuan. Its IPO application for the science and technology innovation board was accepted on October 26, 2020, and it was shown that it had been inquired on November 23. However, two months later, the company still failed to reply to the inquiry of Shanghai Stock Exchange, and the audit was finally terminated on January 27, 2021.

The other two unresponsive companies are Dana bio and Yiteng Jingang. The former's sponsor is CITIC Securities, which plans to raise 408 million yuan. Its IPO application is withdrawn after one month of inquiry; the latter's sponsor is Guotai Junan, which plans to raise 1.316 billion yuan, and its IPO application withdraws after being asked for 4 months.

Zhengji Pharmaceutical Co., Ltd., whose sponsor is China Merchants Securities, plans to raise 1.144 billion yuan. Its audit status will be displayed as "accepted" on December 3, 2020, and will be "terminated" on December 25, less than one month.

According to the prospectus, Zhengji pharmaceutical is mainly engaged in the R & D, production and sales of characteristic APIs and advanced intermediates. It is a national high-tech enterprise focusing on the invention of innovative drug structures, the research and application of new technologies, and the research and manufacture of characteristic drugs.

The reporter noted that Zhengji pharmaceutical once talked about environmental risks in its prospectus, saying that API belongs to heavy pollution industry, and the production process involves a large number of chemical reactions, resulting in a large amount of waste water, waste gas and waste residue, and the composition is complex, so the treatment is difficult. Qixinbao data shows that the company was ordered to stop production and punished by Hongze County Environmental Protection Bureau in 2016, and was punished twice by Suzhou Huqiu District Ecological Environment Bureau in 2018. In addition, some media reports questioned that the equity transfer of the chairman of Zhengji Pharmaceutical Co., Ltd. is suspected of interest transfer.

From the industry point of view, the most IPO companies to terminate the audit are computer industry, with 7 terminated; followed by pharmaceutical manufacturing industry, with 6 terminated; and finally, special equipment industry, with 5 terminated.

It is worth noting that this round of IPO termination audit of the science and technology innovation board shows the characteristics of single day concentration, which once attracted wide attention in the industry.

For example, on December 8, 2020, the audit status of Shanghai Hejing, seccess and Esso information was changed to "terminated"; on January 19, 2021, Tianhe magnetic materials and Hongming Co., Ltd. pressed the IPO termination key; on January 21, the audit of Zhongchao and zhongkejing was terminated; on January 25, the audit status of Ruixin micro, Guanghua technology and Dana biology was changed to "terminated".

The secret behind the frequent withdrawal of IPO materials

Why is IPO termination audit so frequent? Does it mean strict audit standards?

In the view of many professionals, although this "high incidence" does not mean strict audit, there are indeed a variety of trigger factors.

A person close to the regulation told reporters, "we can understand it from three aspects. First, the Shanghai Stock Exchange has strictly checked the entrance, which conforms to the consistent keynote of the science and technology innovation board and has not changed. Second, through on-site supervision and on-the-spot inspection, the exchange has enabled enterprises with problems to "retreat in the face of difficulties". Third, there is a time point problem. Last year, a group of IPO companies on the science and technology innovation board concentrated to supplement the central paper, which was exposed at this time. "

Wang Jiyue, a senior investment banker, said frankly that the direct reason was that the project itself had problems. "Auditing is not stricter, but it's not accidental. With the registration system, there are more people fishing in troubled waters and more people who have broken through with diseases. When problems are found in the audit, supervision is put forward, but it is withdrawn as soon as it is mentioned. This shows that there are real problems. In this case, companies usually withdraw voluntarily, but it is not ruled out that some companies want to struggle again. For example, a medical company that recently withdrew orders has given four rounds of inquiries, and the company has always insisted on not withdrawing. "

21 century economic report reporter learned that on December 8, the three companies terminated the audit on the same day, which was related to the on-site inspection.

In fact, the regulatory authorities have been encouraging on-site inspection of first-time enterprises in order to further strengthen the supervision of information disclosure of first-time enterprises. China Securities Regulatory Commission (CSRC) pointed out that under the background of pilot registration system, it is still necessary to carry out on-site inspection of initial enterprises.

"The implementation of on-site inspection on IPO enterprises can be carried out by consulting and retrieving relevant basic materials and conducting penetrating key inspection on the site of the issuer. It is a necessary supplement to the written audit, which helps to improve the pertinence and effectiveness of the audit, and can play a powerful deterrent role in relevant violations of laws and regulations, and purify the IPO market environment from the source." According to the CSRC, the next step will be to carry out problem oriented and random on-site inspection, focus on key issues, and continuously improve the quality of information disclosure of first-time enterprises.

Just on January 31, the Securities Association also released a list of quality spot checks on the initial information disclosure. The objects of the spot check were the companies on the science and technology innovation board and the growth enterprise market 30 days ago, including nine IPO companies on the science and Technology Innovation Board: Rouyu technology, bluetech environmental protection, Borgen intelligence, and Guoguang information.

"This is also the performance of standardizing the information disclosure responsibility of issuers and compacting the responsibilities of intermediary agencies," said the person close to the regulator

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