In the past 15 years, the IPO Review Committee of the China Securities Regulatory Commission has reviewed a total of 160 companies' IPO applications (excluding repeated reviews), of which 150 passed and 10 failed, with a passing rate of approximately 93.75%. By reviewing the company's pre-disclosure documents, it was found that the reasons for the "failure" of these 10 companies were mainly concentrated in several aspects such as financial problems, information disclosure, internal control and independence.
Abnormal financial indicators
Although the issuance review committee has relaxed its review of the indicator of "sustainable operating ability" compared with previous years, Beijing Longsoft Technology Co., Ltd. This is the reason why he fell at the "gun point".
According to the company's filing materials, its net profit declined year by year from 2012 to 2014, to 40.1847 million yuan, 28.8826 million yuan, and 8.7147 million yuan respectively; accounts receivable increased year by year, to 84.9229 million yuan and 109.9623 million yuan respectively. yuan, 119.6923 million yuan; the net cash flow generated from operating activities decreased year by year, to 11.821 million yuan, 760,800 yuan, and -335,500 yuan respectively; and the amount derived from software product value-added tax refunds and income tax preferential policies accounted for the total profit The proportions have increased year by year, reaching 33.08%, 36.21% and 88.73% respectively.
The Issuance Examination Committee issued an inquiry opinion on this issue: Ask the issuer’s representative to explain whether the issuer’s industry status or the business environment of the industry in which the issuer operates has or will undergo major changes, and to have a negative impact on the issuer’s subsequent profitability. constitute a significant adverse impact.
Similarly, Shenyang Yuanda Compressor Co., Ltd. and Hefei Dongfang Energy Saving Technology Co., Ltd. were both rejected due to abnormal gross profit margins.
Yuanda Compressor is a high-tech enterprise specializing in the R&D and manufacturing of reciprocating piston compressors. The production and sales rate and average selling price of its process reciprocating compressors have been rising from 2012 to 2014. The gross profit margins are 26.70%, 27.87%, and 24.20% respectively.
Regulators have questioned the following points: the reason why the issuer's orders for reciprocating compressors increased significantly in 2014 was due to the slowdown in investment growth in some downstream industries and the substantial reduction in orders from the same industry. The reason why the gross profit margin of reciprocating compressor products was always higher than that of comparable companies in the same industry during the reporting period.
As a technology-based enterprise that specializes in the research and development, production, sales and related services of steel rolling equipment, Oriental Energy Saving has experienced a macroeconomic backdrop of widespread overcapacity in the steel industry. The company's gross profit margin has also been abnormally higher than the industry average. level situation. The financial report shows that the gross profit margins of Dongfang Energy Conservation's main business from 2012 to 2014 were 54.12%, 51.23% and 50.18% respectively. During the reporting period, the gross profit margins under the overall contracting model were 47.13%, 46.57% and 45.44% respectively. The order model The gross profit margins reached 57.62%, 57.06% and 57.43% respectively. Taken together, the company's gross profit margin level is significantly higher than the general range of 10%-30% for comparable listed companies in the same industry.
Although the company has its own interpretation of this: due to the high technical content of the leading offline products in the core industry, such as four/five split guides and water cooling devices, "passive" monopolistic competition is formed. , "The high technical content of the products, the few suppliers, and the high selling price are important reasons why the company's gross profit margin remained basically stable and at a relatively high level during the reporting period." However, the review opinions issued by the Issuance Review Committee were obviously not satisfied with this explanation. : The issuer's downstream steel industry continues to have overcapacity, and the issuer's gross profit margin remained at a high level during the reporting period. The issuer's representative is requested to further explain why the issuer's order sales gross profit margin is significantly higher than that of its competitors.
The letter disclosure and internal control were defective
The reason why two pharmaceutical companies, Jiangxi 3L Medical Products Group Co., Ltd. and Guangzhou Fuda Medical Co., Ltd., were rejected was because of problems with internal control. .
3L Company’s latest pre-disclosure documents show that in 2014, after receiving a report and conducting a self-examination, the company found that some sales orders and signed framework agreements and other documents of multiple sales staff were inconsistent with customer seals. . In addition, it was verified that the company issued false invoices for travel expense reimbursement from 2011 to 2013, involving an amount of 6.0482 million yuan.
Although the relevant staff of the company stated that "the legal risks of the above circumstances have been eliminated," the review results of the Issuance Review Committee showed that the impact of this issue was quite significant.
Looking at Fuda Medical, the regulators’ focus is mainly on three aspects: please recommend the sponsor representative to explain whether the issuer’s tumor cryotherapy technology and radioactive seed implantation treatment technology have passed the Guangdong Provincial Department of Health. Before the review, whether the relevant clinical application business has been carried out and whether it has obtained approval from the relevant competent authorities; whether the Chinese Medical Doctor Association has the qualifications to approve the issuer to carry out clinical research and application of immune cell therapy technology, and whether the issuer will subsequently carry out clinical research on combined immunotherapy Whether the application complies with relevant regulations; the sponsor representative is asked to provide verification opinions on whether the issuer has complete qualifications for carrying out three types of medical-related businesses.
The crux of Xinguang Lvhuan Renewable Resources Co., Ltd.’s failure to “break through” lies in the letter. The issuance review committee requested the sponsor representative to further explain the issuer’s electronic waste dismantling business based on the business process and internal control system. Verification process and conclusions of purchase and sales quantities and amounts, and issue verification opinions on whether the information disclosed is true, accurate and complete.
Similarly, Yuanda Compressor also has flaws in its disclosure. Regulators required the issuer’s representatives to provide additional explanations on the main reasons why the products ordered by Chengdu Shuling and other customers are in “project suspension” and what are the differences between the “contract not being executed normally”; and combined with the verification methods, processes and conclusions on the suspension of the contract, Further explain the reasons for the large differences in disclosure before and after the suspension of the contract.
In addition, Beijing Longsoft only discloses the award-winning content, time and awarding unit of the company's product awards, which is suspected of covering up the company's national scientific and technological progress for "coal mine ventilation gas over-limit pre-control and supervision technology and system" Awarding the second prize is not a fact accomplished independently by the issuer.
Independence is questionable
Horizontal competition, related transactions and other issues that affect the company’s independence are another key factor that affects the success of the conference. Zhonggong Hi-Tech Conservation Technology Co., Ltd. Tong Development Co., Ltd. and Jiahua Chemical Co., Ltd. were rejected for this reason. "Corporate independence issues such as related transactions and horizontal competition have increasingly become the focus of the China Securities Regulatory Commission's review. If the company cannot properly resolve the issues before filing, it would be risky to apply rashly." Mr. Wu, an investment consultant at a brokerage, commented.
The prospectus for the IPO of China Public Hi-Tech clearly stated that “the issuer’s actual controller, the Highway Science Institute of the Ministry of Transport (hereinafter referred to as the “Highway Institute”), and the issuer will no longer conduct any business and compete with each other. The problem has been properly resolved," but regulators are still extremely vigilant. According to the review, the issuer sold products to the highway institute during the reporting period, and the highway institute undertook a regional road network maintenance strategy consulting project and then transferred it to the issuer. Its subsidiary unit, the Transportation and Highway Engineering Research Center, is engaged in field road condition inspection business and road condition development. Review a series of business transactions such as market business.
In addition, based on the fact that the actual controller of the issuer is the sponsor of the Ministry of Transport, many of its directors, supervisors and senior personnel hold positions in the actual controller, controlling shareholders and related parties, and the issuer’s customers are basically the transportation system. Internal enterprises and institutions. The Issuance Review Committee requires the issuer to explain in detail its ability to independently face the market, its advantages and disadvantages compared with market competitors, and whether the issuer's business is dependent on the actual controller and the units it controls or can exert influence on.
If it is said that due to horizontal competition, the transfer of interests occurs in the competitive relationship between actual controllers, large and small shareholders, etc., and it is difficult for supervisors to define this, then the quantitative review of related party transactions appears to be "straightforward" many.
The related transactions of Suotong Development mainly occur on the "Jiayuguan Suotong 250,000 t/a prebaked anode project" of Jiayuguan Suotong Prebaked Anode Co., Ltd. The shareholders of Jiayuguan Suotong are Suotong Development and strategic investor Jiuquan Iron and Steel (Group) Co., Ltd., with shareholdings of 85% and 15% respectively. In August 2011, Soton Development signed a strategic cooperation agreement with Jiugang Group, and the company sold prebaked anodes to its holding subsidiary Gansu Dongxing Aluminum Co., Ltd. Financial reports show that from 2011 to the first half of 2014, the unilateral sales amounts of Soton Development and Dongxing Aluminum were 58.91 million yuan, 98.03 million yuan, 665 million yuan, and 385 million yuan respectively. Among them, the sales between the two parties in 2013 accounted for 34.59% of the total sales in the current period, which was much higher than 8.7% in 2012. The reason behind this was the official commissioning of the above-mentioned projects.
In addition to the corresponding output of prebaked anodes, the input of calcined coke, coal pitch, coke powder and other raw materials as well as water, steam, electricity and other power energy products are also closely related to Jiugang Group and its subsidiary Gansu Liquor The steel group Hongxing Steel Co., Ltd. has frequent exchanges. The purchase amounts from 2012 to the first half of 2014 were 37.96 million yuan, 127 million yuan, and 60.29 million yuan respectively.
As for the rejection of Jiahua Chemical, the "invisible" related transactions between its stakeholders and the company may be the core issue. Qu Yaming, one of the actual controllers of Jiahua Chemical, provided full assistance to Chen Hongyan, the actual controller of Yantai Huanuo Trading Co., Ltd., for the acquisition of Shanghai Boyuan Fine Chemical Co., Ltd., and did not sign any written loan for the subsequent capital increase of approximately 31.5 million yuan. According to the agreement, Chen Hongyan did not repay all the loans to Qu Yaming until the issuer completed the acquisition of all the shares of Shanghai Boyuan held by Yantai Huanuo and paid the relevant payments. Moreover, the issuer had acquired Shanghai Boyuan as early as 2012. The intention was eventually abandoned due to concerns that it would pose an obstacle to later listing plans. Regulators have questioned whether the above situation shows that Yantai Huanuo's acquisition of all the shares of Shanghai Boyuan in 2012 essentially provided the issuer with a "bridging visa"