Red Weekly reporter | Ding Shuang
In September this year, the number of companies whose IPOs were rejected reached 6, which was the largest number of rejections in the year, of which 3 companies on the Science and Technology Innovation Board alone were rejected.
Since the beginning of the year, the number of A-share rejected IPO companies has reached 20, far exceeding the total number of rejected companies in the whole of last year. In this context, what is the specific situation of the companies that have been rejected for IPO this year? What are the NDRC's concerns about the rejected IPOs? The reporter of "Red Weekly" sorted out the relevant data.
The number of "no-nos" ipos in September hit a new high within the year
In the whole of 2020, only 9 A-share IPOs were rejected. But as of now, the number of companies rejected by A-share IPOs has reached 20, far more than last year. At the same time, the number of rejected IPOs in a single month in September hit a new high in the year, reaching 6.
Figure 1: Number of rejected IPOs in 2021 month by month
Among the rejected IPO companies in September, there are only 3 companies that have been rejected by the Science and Technology Innovation Board, and observing the situation of the above 3 rejected IPO companies, it can be found that since the beginning of this year, for the IPO companies of the ChiNext Board and the Science and Technology Innovation Board, their compatibility with the boards they have landed has also become the focus of the assessment of the NDRC.
For example, Shanghai Jikai Gene Medical Technology Co., Ltd., which was held at the meeting in September, was questioned by the Issuance review committee on the issue of technological advancement. The NDRC requires it to elaborate on whether the core technologies in terms of service provision, target screening and verification are conventional technologies in the industry, whether they have high technical barriers, whether most of the products currently developed by the CHAMP platform and the cell therapy platform are for conventional mature targets, the issuer's technical advantages and corresponding research and development capabilities, etc., and at the same time require the sponsor to express a clear opinion on the company's technological advancement and technological innovation capabilities.
The relevant questions are actually measuring the attributes of Jikai Gene's own science and technology innovation and whether it is in line with the positioning of the science and technology innovation board. In the three sci-tech innovation board cases that were rejected in September, almost all of them involved the problem of insufficient attributes of science and technology innovation.
This year, there have also been cases of rejection that do not conform to the positioning of the ChiNext board. On March 25, Jiangsu Hongji Energy Saving New Technology Co., Ltd. made its first meeting. In the prospectus, the company believes that it belongs to the deep integration of traditional industries with new technologies and new formats, which is in line with the positioning of the ChiNext board. However, at the NDRC, the NDRC proposed that the company belongs to the civil engineering construction industry, and this industry is an industry that does not support issuance and listing on the GEM in principle as stipulated in Article 4 of the Interim Provisions on the Issuance and Listing Declaration and Recommendation of Enterprises on the Growth Enterprise Market of the Shenzhen Stock Exchange. During the on-site inquiry, the NDRC questioned the company's reasons for determining that it met the positioning of the GEM, and the company's IPO was finally rejected.
What are the NDRC's priorities?
From the perspective of the sector where the rejected companies are located, of the 20 rejected IPO companies, 6 are located on the main board of the Shanghai Stock Exchange, 2 are located in the main board of the Shenzhen Stock Exchange, 7 are located in the Science and Technology Innovation Board of the Shanghai Stock Exchange, and 5 are located in the ChiNext board of the Shenzhen Stock Exchange.
Schedule: 20 Rejected IPOs During the Year
The IPO companies rejected so far in 2021 involve 14 sponsoring institutions. Among them, the IPOs of 4 companies sponsored by Guotai Junan were rejected, and 2 of the companies sponsored by CICC, Huatai United Securities and Guosen Securities were rejected.
Figure 2: Sponsoring institutions involved
In addition, looking at the 20 rejected IPO companies' inquiries by the NDRC, it can be found that the compliance of financial processing, continuing operations and profitability, internal control system, authenticity and reasonableness of financial data, plate positioning fit, violations of laws and regulations, business independence and other issues are the focus of the NDRC.
Figure 3: DRC's main concerns
Among them, in terms of financial processing compliance and the authenticity of financial data, inventory, accounts receivable, marketing expense ratio, accounts payable and other indicators are the focus of verification by relevant institutions. In addition, relevant institutions also attach great importance to the matching degree of net profit and operating cash flow, and in the on-site inquiries of two companies such as Jiangsu Hongji Energy Saving New Technology Co., Ltd., there are inquiries about this issue.
(The individual stocks mentioned in the article are only examples and are not recommended for trading.) ）