Three Cases Of "Suspension" Items Increased Suddenly In A Week: The Trend Of Strict Audit Without Changing The Registration System

New trends are emerging in the IPO market.

During the week from August 28 to September 4, Shenzhen Hanhong Digital Printing Group Co., Ltd. (hereinafter referred to as Hanhong digital), Chongqing Sifang New Material Co., Ltd. (hereinafter referred to as Sifang new material) and Changchun Jida Zhengyuan Information Technology Co., Ltd. (hereinafter referred to as Jida Zhengyuan) encountered "suspension of voting" during the examination of the examination board.

Within a week, a number of enterprises will encounter "suspension of voting", which is a rare situation in recent years.

Investment bankers pointed out that the results of the "suspension of voting" often appear in some projects that have no evidence to show that they do not meet the listing requirements, but there are still some controversial issues to be solved. And the result of "postponement of voting" itself can not be the basis for the possibility of listing.

The 21st century economic reporter has noticed that in the past three years, there are still as many as 30 IPO projects that have experienced suspension of voting, and then they have been successfully listed.

In the view of those close to the regulatory authorities, the sudden increase of "postponement of voting" projects may mean that the regulatory authorities are holding a more prudent decision-making attitude in the treatment of IPO companies, which is also regarded as a sign of the further transformation of IPO audit towards refinement under the curtain of registration system reform.

Third, the company was "provisional statement"

Only in the less than a week in late August and early September, the three IPO projects proposed by Hanhong digital, Sifang new materials and Jida Zhengyuan were all given the result of "suspension of voting". Among them, the issuance meeting of Hanhong digital was held on August 28, while Sifang Xincai and Jida Zhengyuan were postponed on September 3.

It is worth mentioning that the proposed listing places of the three companies are respectively the science and technology innovation board, the main board and the small and medium-sized board. It is estimated that the funds to be raised will be 683 million yuan, 1522 million yuan and 515 million yuan respectively.

From the financial point of view, the above part of the suspension of voting, the company's performance is not stable.

According to the data of the prospectus, the three-year operating revenue of Hanhong digital was 484 million yuan, 609 million yuan and 881 million yuan respectively, while the net profit attributable to the parent company once lost 82 million yuan in 2018, and again made a profit of 214 million yuan in 2019; the revenue of Jida Zhengyuan in 2018 increased by 21.48% year-on-year, but decreased by 4.52% in 2018.

In contrast, the performance of Sifang new materials, known as "Chongqing concrete king", is more stable. According to the data, in 2016, 2017, 2018 and the first half of 2019, Sifang new materials achieved revenue of 707 million yuan, 928 million yuan, 1452 million yuan and 670 million yuan, showing an overall upward trend.

"Usually, the suspension of voting results in some new problems that are not involved in the feedback and inquiry process, which need to be fed back and handled by the company in a timely manner." "If the feedback has been answered, the rate may not be the reason for the suspension of voting. For example, there are some projects related to the report before the meeting."

It is worth mentioning that during the IPO period, Hanhong digital has been constantly encountering complaint letters from its competitor runtianzhi. According to 21st century economic report, on the eve of Hanhong digital's conference, the regulatory authorities received the eighth complaint letter submitted by runtianzhi this year.

Runtianzhi put forward in the complaint letter that Hanhong digital, which was founded later, was suspected of technology infringement caused by employee job hopping on the function, structure and software interface of some products. In addition, it also listed the false sales of Hanhong digital and environmental protection violations.

As a matter of fact, two other items have encountered occasional delays.

Before the IPO of Jida Zhengyuan, there was a "infighting" situation, that is, the company had sued the current chairman of the board of directors for equity transfer disputes. Although Jida Zhengyuan finally withdrew the lawsuit after negotiation, there is still some uncertainty whether the incident will affect the stability of its subsequent equity structure.

According to the 21st century economic report, the reporter learned from the investment bank that the reason for the suspension of voting of Sifang New Material Co., Ltd. or related issues of a supplier upstream need to be further confirmed.

"Sifang's suspension of voting is related to the need to confirm some problems of their sand and stone suppliers." An investment banker close to Sifang Xincai said.

Symptoms of refinement

Recently, the rapid increase in the number of deferred voting items has also led to speculation about whether there is a new adjustment in the audit criteria.

However, it was not long after the Implementation Committee of the 17th century that the IPO audit was postponed in the 21st century, and the new IPO audit committee reported that it had been suspended for a long time in the 21st century The situation of "six over one" and "seven over one" has been grim and strict.

However, in the view of investment banks, the suspension of voting can not be the basis for judging the success of the project listing.

"The suspension of voting is not a good result, but it can not be said to be a bad result." The investment bank of the medium-sized securities firm said, "it is equivalent to between passing and not passing. It means that the company has not been audited at the meeting. The reasons behind the suspension of voting are solved. The company will often go to the meeting twice, and then there will be more definite audit conclusions."

In the view of industry insiders, the sudden increase of suspended voting items, to a certain extent, is a sign that the IPO market is moving towards further fine-grained regulatory transformation.

"Because under the direction of registration system reform, the regulatory authorities will not put forward too many requirements on the enterprises of Shanghai stock exchange with the continuous profitability and operational indicators. However, some new problems have not been solved, but they can not judge that they do not meet the listing requirements, they often adopt the method of suspending voting." "To some extent, it's part of the meticulous scrutiny of IPOs," said an investment banker close to regulators

According to the statistics of 21st century economic report, since 2017, no less than 30 IPO companies have experienced suspension of voting for a time, but they have finally obtained the initial approval (including suspension of voting and re declaration of projects after being rejected).

However, some projects were vetoed after the suspension of voting. For example, Chongqing Baiya sanitary products Co., Ltd., Beijing Construction Engineering Environmental Remediation Co., Ltd. and other proposed IPO companies had their voting suspended in 2017, but they still failed to pass the examination in the development and examination committee. In addition, Bora Network Co., Ltd., which encountered suspension of voting and was rejected in 2017, failed to attend the meeting when it later applied for listing on the science and technology innovation board.

"If the controversial issues behind the project are solved and the listing requirements of the exchange are met, the project can eventually be listed." Yao Jianfeng, director of dengzhuo investment, also said, "the problems concerned by the regulatory authorities have become more detailed. For items that cannot be judged immediately, the judgment can be delayed by suspending voting."

"The increase of items with suspension of voting indicates two directions. One is that the review process will not easily impose" death penalty "on the issuer immediately. As long as there is no direct evidence to show that the listing requirements are not met, the method of suspending voting can still be used to" leave opportunities "for issuers." "Second, in the wave of reform of registration system, suspending voting does not mean reducing the audit requirements. Some controversial projects still need to be strictly audited," said the investment bank close to the regulatory level