Every 3.2 Days, A Company That Plans To Go To The Science And Technology Innovation Board Presses The Termination Button: There Are No Lack Of Star CITIC Securities And Other Investment Banks "Sitting On The Crater" Of 26 Withdrawal Enterprises

Since 2021, every 3.2 days, a company planning to be listed on the science and technology innovation board has actively pressed the listing termination button.

December 2020 is a watershed. Since then, the number of materials to be withdrawn by IPO companies has risen sharply, and the science and technology innovation board is a disaster area.

According to wind data statistics, as of March 24 this year, 28 enterprises have terminated the IPO road of the science and technology innovation board, and 26 enterprises have taken the initiative to withdraw orders.

The sudden outbreak of the "cancellation tide" has exposed some market concerns such as enterprises "breaking through the barrier with illness" and the practice quality of sponsor institutions, which has aroused the high attention of the market and regulatory authorities.

"According to the preliminary information, it is not to say how big the problems of these enterprises are, nor is it because of the withdrawal of false accounts. One of the important reasons is that the quality of practice of many recommendation agencies is not high." Recently, the chairman of the CSRC, Yi Huiman, set the tone at the China Development Forum.

The reporter of 21st century economic report combed the data of enterprises that cancelled orders during the year, and found that the number, industry, performance and sponsor institutions of 26 enterprises withdrawing orders on the science and Technology Innovation Board showed distinct characteristics, which were also explained by industry experts.

26 orders withdrawn in 83 days

According to the information statistics of Shanghai Stock Exchange, only 83 days from the beginning of this year, 26 enterprises planning to list on the science and technology innovation board have taken the initiative to withdraw orders and terminate the IPO road.

As a matter of fact, it is not a new thing that the IPO companies of the science and Technology Innovation Board will "withdraw orders". The first batch of companies will be listed on July 22, 2019, and four companies will withdraw their listing applications in the same month.

However, December 2020 is an important node.

According to the statistics of the 21st century economic report, before that, the number of enterprises that terminated listing on the science and technology innovation board every month had been small. Except for six in September, there were no more than five in other months, and even zero in February and March. In the first 11 months, a total of 26 enterprises terminated their listing.

However, in December last year, the number of cancellation orders of enterprises to be listed on the science and technology innovation board suddenly rose to 15 in a single month, nearly four times the previous month, bringing the total number of cancellation orders to 41 in 2020. So far this year, 26 enterprises have withdrawn orders, which is equal to the number of cancellations in the first 11 months of last year, more than half of the total number of cancellations in the whole year.

In the view of industry insiders, the cancellation of an enterprise is closely related to the on-site inspection regulations for first-time enterprises issued by the CSRC.

"The core reason is that the barrier lake of IPO has begun to appear. Therefore, the supervision has strengthened the window guidance and on-site inspection. Many enterprises and intermediary agencies that have applied for declaration with illness have done their best, and those enterprises that have not done enough work have voluntarily applied for withdrawal of materials." He nanyo, a senior investment banker, said.

On October 30 last year, China Securities Regulatory Commission (CSRC) issued the "Regulations on on on-site inspection of first-time enterprises (Draft)", which aims to standardize the on-site inspection of first-time enterprises, strengthen the supervision of information disclosure of first-time enterprises, urge intermediary agencies to return to their positions and fulfill their responsibilities, and protect the legitimate rights and interests of investors. It standardizes the basic requirements, standards, procedures and follow-up work of on-site inspection of first-episode enterprises, clarifies the rights and obligations of units and personnel involved in the inspection, compacts the responsibilities of issuers and intermediaries, and strengthens the supervision of inspectors.

After a month of "wait-and-see" period, the relevant parties began to take action, the pace of enterprise IPO slowed down and the planned IPO withdrawal accelerated.

He Nanye also said that after the previous round of IPO on the science and technology innovation board, the quality of the enterprises queuing up at present is worse than that of the previous batches. In terms of probability, under strict supervision, the quantity of materials withdrawn will also increase correspondingly.

On January 29, this year, the "Regulations on on on-site inspection of first batch enterprises" was officially implemented, so that the on-site inspection work previously classified as window guidance has rules to follow. Subsequently, China Securities Regulatory Commission (CSRC) quickly released the latest round of spot checks on information disclosure quality of first-time enterprises, and a total of 20 enterprises "won the lottery". Among them, 16 enterprises have taken the initiative to withdraw the application materials, with a withdrawal rate of 80%.

At this point, the planned IPO enterprises "cancellation tide" has become more and more intense.

There is no lack of star unicorn

According to the 21st century economic report, from the perspective of the industry of the CSRC, some of the 26 enterprises that withdraw orders from the science and technology innovation board contain a high number of "branches", including star Unicorn companies.

Specifically, among the 26 enterprises that withdrew their applications for listing on the science and technology innovation board, 7 of them were in the computer, communication and other electronic equipment manufacturing industries, accounting for nearly 30% of the total number of cancellation orders, ranking first.

Among them, there are also some star "unicorns", including Hesai technology, which is expected to become the "first share of lidar".

There is also a small and well-known Unicorn enterprise in the display industry in the investment circle.

Its core technology products are mainly flexible display screen and flexible sensor. In addition to the folding mobile phone, there are also soft memory intelligent handwritten book, Rouyu intelligent conference display terminal, e-book, car safety intelligent screen, curved elevator central control, etc. As for the reasons for the withdrawal of materials, Ruoyu technology announcement said that due to the direct level of the company's shareholder structure, "three types of shareholders" and other suitable conditions need to be further demonstrated.

The other five enterprises in the computer, communication and other electronic equipment manufacturing industries also have chaomicroelectronics, Guoguang information, Longxun shares, Zhongke Jingshang and Tianhe magnetic materials.

The second concentrated industry of cancellation enterprises is the professional equipment manufacturing industry, involving 6 enterprises, including linkage technology, shangwo medical, chuangyeng environmental protection, baizijian, Bochuang intelligent and Hongming.

The third is software and information technology service industry, covering Qizhi technology, yunzhisheng and Ruixin micro.

In other words, the number of enterprises gathered in the above three industries accounted for more than 60% of the total number of orders withdrawn from the science and technology innovation board this year, with distinct characteristics of science and technology.

In his opinion, this is determined by the industry positioning and attributes of the science and technology innovation board. The science and technology innovation board is located in high-end technology, while TMT, high-end manufacturing, software and other enterprises are more likely to meet the positioning requirements of the board. Judging from the industry distribution of listed enterprises and queuing enterprises on the science and technology innovation board in the past, the proportion of the above-mentioned industries is also very high. Therefore, there will be a corresponding increase in cancellations.

In terms of regional distribution, enterprises are also concentrated in Shanghai, Zhejiang, Jiangsu, Guangdong and Beijing, which are at the forefront of domestic science and technology development. The number of cancellations in these five regions alone accounts for more than 70% of the total.

Among the 26 cancelled enterprises, there were 1-2 enterprises involved in ecological protection and environmental management, pharmaceutical manufacturing, chemical raw materials and chemical products manufacturing, professional technical services, general equipment manufacturing, metal products and non-metallic mineral products.

Performance is not the main cause

Although the 26 cancelled companies have a high number of "branches", their performance is uneven.

According to the reporter's analysis, among the 26 science and technology innovation board withdrawal enterprises, there are shangwo medical, baizijian, Guanghua Technology (Note: the full name of the company is Zhejiang Guanghua Technology Co., Ltd., not Guanghua Technology (002741), which is listed on the A-share market), and other enterprises, such as shangwo medical, baizijian and Guanghua Technology (Note: the full name of the company is Zhejiang Guanghua Technology Co., Ltd., not Guanghua Technology (002741)) which is listed on the A-share market, and other enterprises are in deficit for three consecutive years from 2017 to 2019 Rouyu technology, yunzhisheng, Shanghai Tuopu and Tianshi biology are damaged.

Specifically, Ruoyu Technology Co., Ltd. has the largest performance loss in the three years from 2017 to 2019, with a net profit loss of 359 million yuan, 802 million yuan and 1 073 billion yuan respectively, and the amount of loss is increasing year by year.

However, its three-year operating revenue is increasing year by year, from 65 million yuan in 2017 to 227 million yuan in 2019. From January to June of 2020, the net profit loss of Ruoyu technology was nearly 1 billion yuan, and the loss range continued to increase. The main reason for the company's continuous loss is that the company's products are still in the market development stage, and the sales scale is relatively small, and the research and development of new products need to invest a lot of money.

The company with the second largest performance loss is also a "technology unicorn" - yunzhisheng, which lost 174 million yuan, 214 million yuan and 292 million yuan respectively from 2017 to 2019, and its operating income is also growing.

According to the performance data of these companies in 2019, 10 enterprises achieved double-digit growth in operating revenue and net profit, and 16 enterprises achieved growth in both revenue and net profit. In terms of net profit, the net profit of 10 enterprises is more than 50 million yuan.

"Performance is not the main reason for the withdrawal." He Nanye pointed out in an interview.

In his opinion, one of the reasons why many enterprises voluntarily withdraw materials is that the industry positioning and the attribute of the science and technology innovation board are not strong, which does not meet the requirements of listing on the science and technology innovation board. The second reason is the hasty declaration, many due diligence work is not enough, once the on-site inspection, it is easy to be found problems by supervision and lead to punishment, so many enterprises take the initiative to withdraw materials.

The quality of practice is the key

However, in the situation of "cancellation tide", the quality of the practice of recommendation agencies has been pushed to the forefront.

As Yi Huiman pointed out, one of the important reasons for the withdrawal of the listed companies is that the practice quality of many recommendation agencies is not high.

In the companies that withdraw their listing applications on the science and technology innovation board, there are frequent large-scale securities companies.

According to the reporter's statistics, among the 26 enterprises, CITIC Securities has the largest number of enterprises, with a total of 4.

Closely followed by CSCI and Haitong Securities, three of their sponsors withdrew their IPO applications on the science and technology innovation board this year. China Merchants Securities and Dongguan securities ranked fourth, with two sponsors.

CITIC Securities, Haitong Securities, CITIC construction investment and China Merchants Securities are not only the four securities companies with the largest number of sponsors listed on the science and technology innovation board, but also rank in the "first file" echelon in the evaluation results of the practice quality of the sponsor securities companies in 2020 issued by the national stock to equity company.

"Because the implementation time of the registration system is still relatively short, the recommendation experience of the sponsor institutions is still insufficient, and the audit mode and key points of the CSRC and the exchange may still lack sufficient communication with the sponsor. There are essential differences in the transformation from the past approval system to the registration system, but the recommendation agencies may still have not changed their ideas and are doing it according to the old set. " Dong Dengxin, director of the Institute of Finance and securities of Wuhan University of science and technology, said.

He Nanye pointed out that under the current registration system, firstly, the competition between securities companies is very fierce, so the securities companies are also catching up with the declaration progress, which will inevitably lead to the lack of meticulous due diligence. At the same time, as the second line of defense of the project, the quality control and core departments of securities companies will lower the requirements and lower the standards in this fierce competition pattern, and serve the performance of securities business. Third, under the registration system, the workload of the major securities companies, especially the investment bank team of the head securities companies, is extremely saturated. The continuous high-intensity work inevitably leads to a lot of due diligence work not in place.

In view of the fact that many intermediary agencies have not really possessed the concept, organization and ability to match the registration system, and are still in the "old way with new shoes", Yi Huiman stressed, "we are making further analysis and will take targeted measures for the problems found. Those who "break through the barrier with illness" will be dealt with seriously and will never be allowed to withdraw. In general, we should further strengthen the intermediary's responsibility and urge them to improve their ability to perform their duties. The regulatory authorities also need to further strengthen the construction of basic systems and accelerate the improvement of relevant measures and regulations. "

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