The "Problem Oriented" Thinking Of On-Site Verification Made It Clear That The "First Share" In The Specific Subdivision Field Of Materials Was Withdrawn From The Three Disputed Enterprises And Became The Focus Of Attention

Another round of on-the-spot inspection shows that enterprises withdraw listing materials on their own initiative.

On July 4, the Securities Industry Association announced the latest round of spot checks on information disclosure quality of IPO enterprises, also known as on-site inspection in the industry. This is the fourth IPO on-site inspection this year, and a total of 19 IPO companies have been selected.

As of August 2, among the 19 selected enterprises, 3 have chosen to withdraw their IPO application materials and terminate their listing. It includes Zui Qingfeng, which intends to impact the "first share of sex goods", Laibang technology, whose family members hold more than 97% of the total shares, and Kahn culture, which has the situation of taking shares by surprise.

Among the 20 IPO companies selected on January 31, 17 of them chose to withdraw their IPO application materials on their own initiative. Such a high proportion of withdrawals made the market look sideways. The CSRC specially revised the new regulation, saying that it would further expand the scope of on-site inspection and supervision, adhere to the principle of "declaration means responsibility", and organize verification according to law for items withdrawn after receiving on-site inspection or supervision notice, and resolutely put an end to "breaking through customs with illness".

"From the perspective of the selected enterprises in this batch of on-site inspections, the enterprises selected by supervision are representative, which are concerned about the problems of enterprises and carry out targeted on-site inspection." There are senior investment banks in Beijing said. In terms of investment banks, the recently released cases of insurance agency punishment also show that after enterprises withdraw their materials, relevant insurance agents still have a greater probability of being prosecuted by supervision.

Another round of on-the-spot inspection shows that enterprises withdraw listing materials on their own initiative- Visual China

Temporary dream of "the first stock of sex goods"

On June 24, Zui Qingfeng, known as "the first stock of sex goods", applied for listing on the gem by Shenzhen Stock Exchange. As the "first share" in the subdivided field, Zui Qingfeng has won the attention of the regulatory authorities and was selected to participate in the latest IPO on-site inspection.

However, two weeks after the on-site inspection, Zui Qingfeng suddenly announced the withdrawal of the listing application documents and terminated the listing examination on July 19. From the application acceptance to the termination of the audit, Zui Qingfeng's listing only took less than 1 month to announce the termination.

According to the company's prospectus, Zui Qingfeng is an e-commerce company focusing on gender health products, and a comprehensive operator integrating brands, products and platforms.

"Our withdrawal this time is mainly due to the company's further strengthening of brand building, market cultivation and R & D strength, enhancing the company's core competition and sustainable operation ability, and then adjusting the company's development strategy and delaying its listing plan." As for why they chose to withdraw their listing application, some Zui Qingfeng securities representative explained this to the reporter of 21st century economic report.

However, from the information that Zui Qingfeng has disclosed, the company's withdrawal is not as simple as it describes.

As an e-commerce business platform, Zui Qingfeng was once infatuated with the common fault of "brushing orders". According to the information in the prospectus, the company has been brushing orders continuously from 2018 to 2020, and the amount of brush orders in the above years accounts for 3.17%, 0.77% and 1.4% of the sales revenue of that year respectively. Based on the simple calculation of sales revenue, the amount of Zuiqing wind brush will reach 24.1373 million yuan, 7.4267 million yuan and 14.9434 million yuan respectively from 2018 to 2020, with an accumulated amount of 46.5074 million yuan. Until October 2020, before receiving the listing guidance, Zui Qingfeng stopped brushing orders.

According to Zui Qingfeng, the company's brush order aims to improve the shop ranking and praise rate, and achieve the purpose of promotion and drainage. The sales revenue is not confirmed in the order of brush order, and there is no false increase in performance. The company's sponsor, Cinda securities, also said, "swiping banks do not constitute major violations of laws and regulations, and do not constitute a substantial obstacle to the IPO."

"Scalping is a problem for the whole industry. As long as it is not too excessive and there is no financial fraud, the regulatory authorities generally don't think it will constitute a substantial obstacle to listing." Wang Jiyue, a senior investment banker.

In contrast, the market pays more attention to whether Zui Qingfeng, as an e-commerce platform for sex goods, conforms to the implicit standard of gem listing.

At present, Zui Qingfeng mainly adopts the asset light business model of "Internet + OEM production", and the company's R & D investment has not been paid attention to. From 2018 to 2020, Zui Qingfeng's R & D expenses accounted for only 0.11%, 0.19% and 0.23% of operating revenue respectively. In 2020 alone, the R & D expenditure of Zui Qingfeng is only about 2.5 million yuan.

From the information in the prospectus, Zui Qingfeng has only 18 product and technology developers. The company's only two product developers also have multi role experience of warehouse packer, customer service, operation and human resources, which are not suitable for product development. Zui Qingfeng also confessed in the prospectus that "due to the particularity of the gender health products industry, it is relatively difficult to introduce talents, and there is a lack of technological innovation and knowledge innovation talents."

"It's hard to say that Zui Qingfeng really has any technological innovation ability. The company's performance is more like a light manufacturing enterprise, which may be inconsistent with the gem positioning under the registration system." However, the above senior investment bank personnel also said that whether it meets the requirements of gem's "three innovation and four new" or is not the main reason for Zui Qingfeng's final termination of listing, there may be more serious problems in the on-site inspection process.

At present, according to personnel close to Zui Qingfeng, although the listing application materials have been withdrawn, Zui Qingfeng will still be subject to on-site inspection by the regulatory authorities in accordance with the provisions.

The "problem oriented" direction of on-site inspection is clear

Like Zui Qingfeng, there are also Laibang technology and Kahn culture, which also plan to be listed on the gem.

Laibang technology had been listed on the new third board market before, and it happened to meet a new round of on-site inspection of IPO after the company applied for listing on the gem on June 23. One month after the application for listing, the company also took the initiative to withdraw the listing application materials.

On the whole, Laibang technology is a rare "relative family shop" in the capital market. The actual controllers of the company are pan Xiaoting and Yang Xiaoling. Among them, pan Xiaoting directly held 49.11 million shares of the company, with a shareholding ratio of 70.89%, and Yang Xiaoling held 4.76%. In total, 75.65% of the company's shares are directly held. In addition, pan Xiaoting indirectly holds 1.37% of the company's shares.

What's more special is that most shareholders of Laibang technology also belong to the real controller's big family in addition to the high proportion of shares held by the actual controllers. According to the prospectus, the daughters of Pan Xiaoting and Yang Xiaoling, the younger sister, cousin, daughter-in-law and cousin of Pan Xiaoting, as well as Yang Xiaoling's younger brother, niece and nephew's son-in-law, all have a certain proportion of shares in Laibang technology. Among the shareholders of Laibang technology, there are more than 24 related shareholders, accounting for 97.05% of the total direct and indirect holdings of Laibang technology.

"Family business is not an obstacle to listing, but I have been told by investment banks that the internal governance of the company is not standardized, which is a problem that family businesses are prone to produce." Some private equity investors who have investigated Laibang technology said that they could not rule out that this round of on-site inspection found problems in corporate governance, leading to the company's actual termination of listing.

Another Kahn culture, which also withdraws the listing declaration materials after spot check, has some shareholders' sudden shares. Moreover, according to the equity penetration of qixinbao, Guangdong Bozi Tongze No.1 equity investment partnership (limited partnership), one of the shareholders in the raid, can also penetrate up to China Merchants Securities, which sponsor the listing of Kahn culture.

As for the reasons for withdrawing the listing application, the staff of the Secretary Office of Laibang technology said that they were not clear. Mr. Strauss Kahn's culture secretary told the 21st century economic reporter that it was "inconvenient to be interviewed.".

"Judging from the IPO on-site inspection this year, the supervision obviously chose these enterprises with problems, which belongs to the problem oriented random inspection." According to the above analysis by senior investment banks in Beijing, as there was no previous listing precedent, the current regulatory focus is on the "first share" in specific segments. Rongda technology, which has been selected this time, has not been listed under the name of "print shop". The rest of Changrun shares are called "Jack's first share", while Zui Qingfeng, who withdraws listing materials, is called "the first stock of interest products".

In addition, the second listing application of enterprises will also cause regulatory concern. For example, COSCO and Zhejiang Chuang Chuang, which have applied for listing on the science and technology innovation board but eventually transferred to the gem, are listed in the list of 19 on-site inspection enterprises. Kahn culture or because of the sudden purchase of shares before the declaration is locked in, Zui Qingfeng also has the situation of sudden low-cost equity.

"Of course, performance is also the key to affect the attitude of supervision. Regulators now prefer enterprises with steady growth in performance. For example, the performance of Huaqin technology, which has been selected, fluctuates too much and turns losses into profits." In the opinion of the investment bank, on-site inspection has become a targeted means for the supervision to carry out early "audit" on the companies to be IPO concerned.

No longer exempt from punishment

Since the beginning of this year, the supervision has maintained a high pressure attitude towards the problem of high withdrawal rate of enterprises after IPO on-site inspection.

In January 2021, China Securities Regulatory Commission (CSRC) officially issued the regulations on on on-site inspection of first-episode enterprises. Less than two days after the promulgation of the new regulations, the Securities Industry Association organized the spot inspection and drawing of trust paper quality of enterprises applying for IPO. Among the 407 companies applying for the science and technology innovation board and the growth enterprise market, 20 companies were selected, and finally 17 withdrew their IPO applications.

Yi Huiman, chairman of China Securities Regulatory Commission (CSRC), once commented on the high proportion of withdrawals in IPO on-site inspection, saying that "according to the preliminary information, it is not to say how big the problems of these enterprises are, nor is it because of false account withdrawal. One of the important reasons is that the quality of practice of many sponsor institutions is not high.".

In July, the China Securities Regulatory Commission specially revised the guiding opinions on urging securities companies to return to their original positions and fulfill their responsibilities in investment banking business under the registration system. Among them, for the IPO on-site supervision, the CSRC said that it would further expand the scope of on-site inspection and supervision, adhere to the principle of "declaration means responsibility". For the items withdrawn after receiving the on-site inspection or supervision notice, the CSRC and the trading places will organize verification according to law, and resolutely put an end to the behavior of "breaking through customs with illness". Special inspection shall be organized at least once a year for securities companies with high withdrawal rate of investment banking projects, high default rate of corporate bonds, low evaluation of practice quality and many problems reflected in the market; Administrative supervision measures should be taken in accordance with the law.

"Several rounds of on-the-spot inspections in the first half of the year have made the internal security companies nervous. Now, the internal control of the company's internal control over the quality of the enterprise has also been advanced to the guidance link, striving to ensure that the orders will not be withdrawn. At this time, the supervision will pay special attention to the situation that materials can not be removed after on-site inspection. " There are head securities investment banks said.

In this round of on-the-spot inspection, the three enterprises that withdraw their declaration materials are recommended by Cinda securities, Northeast Securities and China Merchants Securities respectively. According to the current regulations, the withdrawal of listing materials by enterprises can be exempted from on-site inspection within 10 working days after receiving the on-site inspection notice. And the three enterprises that withdrew the materials all terminated their listing 10 working days after receiving the notice, and they could not be exempted from inspection.

"The recent case of Yong Sheng animation agent being punished is the case that the company withdraws the listing materials, and the supervision takes responsibility for the sponsor organization. If you are not diligent, you will be punished. " The senior investment bank said.

In January this year, Yongsheng animation, which applied for listing on the gem, submitted an application to withdraw the listing application documents after being found out by the on-site supervision. In July, the Shenzhen Stock Exchange issued a supervision letter to two sponsor representatives of its underwriter Huatai Union, and took written warning supervision measures. It has also become a clear case of being punished even after "investigation and withdrawal".

"If the punishment results really come down, the Baodai's annual bonus is estimated to be gone, and the quality control core Department of the company should also be responsible. Now, our investment banking business has clear accountability procedures." The head of the securities investment bank said.

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