Against the backdrop of a phased tightening of IPO pace, only one new public offering application has been accepted this year, but 45 companies planning to IPO or publicly issue have terminated their review.Among these 45 companies, 17 have applied for IPOs on the Shanghai Stock Exchange (10 on the main board and 7 on the science and technology innovation board), 12 have applied for IPOs on the Shenzhen Stock Exchange (1 on the main board and 11 on the ChiNext board), and 16 have applied for public offerings on the Beijing Stock Exchange. Among them, during the last week of the Year of the Rabbit (February 5th to February 9th), 7 companies planning to IPO or publicly issue terminated their review.It is worth noting that since the beginning of 2014, the number of IPOs withdrawn by the Beijing Stock Exchange has reached a new high. Among them, the number of companies that terminated audits in January reached 11, marking the first double-digit increase in the number of audits terminated in a single month.On the last working day of the Year of the Rabbit (February 9th), the China Securities Regulatory Commission issued a signal of strong supervision over IPOs and imposed administrative penalties on Shanghai Sierxin Technology for fraudulent issuance that had already been cancelled. The China Securities Regulatory Commission stated that it will adhere to the principle of "reporting and assuming responsibility", and for those suspected of major illegal and irregular behavior, issuers and intermediaries will investigate thoroughly even if they withdraw their listing applications.Since the beginning of this year, 45 IPOs have terminated their review, and the Beijing Stock Exchange has terminated 16 in less than 2 monthsDuring the last week of the Year of the Rabbit (February 5th to February 9th), five companies planning to go public on the Shanghai and Shenzhen stock exchanges terminated their review, and two companies planning to go public on the Beijing Stock Exchange terminated their review, both of which were voluntary cancellations.Among them, two companies have applied for IPOs on the Shanghai Stock Exchange, namely Adopt-a-Cow Holdings Group Co., Ltd. and Pengli Biopharmaceutical Technology (Shanghai) Co., Ltd; Three companies have applied for IPO on the Shenzhen Stock Exchange, namely Sichuan Koride Pharmaceutical Co., Ltd., Shanghai Xinyan Industrial Equipment Co., Ltd., and Zhuhai Jingshi Measurement and Control Technology Co., Ltd; Two companies have applied for public offering on the Beijing Stock Exchange, namely: Shanghai Honghui Guangtong Technology Co., Ltd. and Funaike Superhard Materials Co., Ltd.Similar situations of termination of review have become the norm. As of February 18th this year, a total of 45 companies planning to IPO or publicly issue on the Shanghai, Shenzhen, and North stock exchanges have terminated their review.The vast majority of companies voluntarily cancel orders. Among these 45 companies, 43 terminated their audits due to cancellation, accounting for 95.56%; The remaining two companies, one (Zhejiang Shenghuabo Electric Appliance Co., Ltd.) was terminated from audit due to being rejected in the meeting, and the other (Beijing Blue Interstellar Technology Co., Ltd.) was terminated from audit due to failure to eliminate the suspension of audit or submit valid documents within three months after the suspension of audit.From the situation of the sponsoring institutions, among the 45 enterprises, CITIC Securities sponsored 7, CITIC Securities sponsored 5, China International Capital Corporation (CICC) and Minsheng Securities both sponsored 4, Zhongyuan Securities, Changjiang Securities Underwriting sponsored 2, Kaiyuan Securities, and Huatai United sponsored 2, while the other securities firms only sponsored 1.It is worth noting that since the beginning of 2014, the number of IPOs withdrawn by the Beijing Stock Exchange has reached a new high. As of February 18th, the number of companies terminated by the Beijing Stock Exchange since the beginning of this year has reached 16, with 11 companies terminated in January, marking the first time in a single month that the number of terminated audits has reached double digits.In the IPO projects terminated by the Beijing Stock Exchange, the growth of corporate performance and business capabilities have also received frequent regulatory attention. Several IPO terminated companies have been questioned by regulatory authorities due to "declining performance".Behind the increase in the number of terminated audits by the Beijing Stock Exchange, the number of public offering acceptance projects is constantly increasing. On September 1, 2023, the China Securities Regulatory Commission issued the "Opinions on the High Quality Construction of the Beijing Stock Exchange" (hereinafter referred to as the "19 Articles of Deep Reform"). With the gradual implementation of the "19 point deep reform" policy and the influence of multiple factors such as the market, the Beijing Stock Exchange has ushered in a breakthrough development, among which the conversion system and direct IPO policy have received more attention from the market and prospective listed companies.From September 2023 to February 18, 2024, there were a total of 104 new IPO acceptance projects in the A-share market, of which 73 were newly accepted by the Beijing Stock Exchange, accounting for 70%.On February 6th, the Beijing Stock Exchange announced that it has recently formulated an action plan to promote the improvement of the quality of listed companies on the exchange. This includes optimizing the listing review and continuous supervision, continuously improving the quality and efficiency of listing review, guiding sponsor institutions to ensure the quality of listed companies, and preventing "passing through barriers with problems".The first IPO to voluntarily cancel orders was still heavily fined, involving fraudulent issuanceOn February 9th, the last working day of the Year of the Rabbit, the China Securities Regulatory Commission issued a signal of strong regulation on IPOs.The China Securities Regulatory Commission has announced that it has imposed administrative penalties on Shanghai Sixin Technology Co., Ltd. (formerly known as Shanghai Guowei Sixin Technology Co., Ltd., hereinafter referred to as "Sixin") for fraudulent issuance during the process of applying for an initial public offering on the Science and Technology Innovation Board.This case is the first fraudulent issuance case investigated by the China Securities Regulatory Commission since the implementation of the new Securities Law, where the issuer submitted application materials but did not register.Si'er Xin's IPO application was accepted on August 24, 2021, and entered the inquiry stage on September 22 of the same year. The China Securities Regulatory Commission conducted an on-site inspection in December 2021 and found that the company was suspected of illegal activities such as inflating income. In July 2022, Silex withdrew its application for IPO. The China Securities Regulatory Commission has launched an investigation and trial into its suspected fraudulent issuance behavior.After investigation, it was found that Silxin fabricated significant false content in the securities issuance documents announced. Section 6 "Business and Technology" and Section 8 "Financial Accounting Information and Management Analysis" of its prospectus contained false records of financial data. In 2020, Silxin inflated its total operating revenue by 15.3672 million yuan, accounting for 11.55% of the current year's operating revenue, and the total inflated profit was 12.4617 million yuan, accounting for 118.48% of the current year's total profit.In response, the China Securities Regulatory Commission imposed a fine of 4 million yuan on Silex; Impose a fine of 3 million yuan on Huang Xueliang, then Chairman of Silex, and Toshio Nakama, then Director, CEO, and General Manager of Silex; Impose a fine of 2 million yuan on Lin Kaipeng, then director and senior vice president of Silex, and Xiong Shikun, then director, senior vice president, and board secretary of Silex; Li Xiong, the then Chief Financial Officer of Silex, should be fined 1.5 million yuan; Impose a fine of 1 million yuan on Yang Lu, the then chairman of the board of supervisors of Silex.The implementation of a registration system emphasizes information disclosure as the core, and the issuance and listing conditions are more diverse and inclusive. The entire process of issuance and listing is more standardized, transparent, and predictable. However, implementing a registration system does not mean relaxing quality requirements. While giving the right to choose to the market and strengthening market constraints, the review and legal constraints will also be stricter, "said the China Securities Regulatory Commission.The China Securities Regulatory Commission stated that the next step will be to strictly crack down on securities illegal activities in accordance with the law, further increase on-site inspections, on-site supervision, and law enforcement in the field of new stock issuance, and strengthen the disclosure responsibility of issuers and the "gatekeeper" responsibility of intermediary institutions. The China Securities Regulatory Commission will resolutely crack down on illegal and irregular behaviors such as financial fraud and fraudulent issuance with a "zero tolerance" attitude, effectively maintain market order, and protect the legitimate rights and interests of investors.
The reform of the Beijing Stock Exchange (hereinafter referred to as the "Beijing Stock Exchange") has not stopped, and the Beijing Stock Exchange 50 Index has also ushered in a "good start" market, with a cumulative increase of 5.75% in the first three trading days of the the Year of the Loong.Currently, the reform of the Beijing Stock Exchange has entered a critical period. On February 6th, the Beijing Stock Exchange released the "Action Plan for Promoting the Quality of Listed Companies on the Beijing Stock Exchange", which starts from optimizing the structure of listed companies, improving the rule system, enhancing governance level, improving the quality of information disclosure, promoting stable and rapid development of companies, and improving the efficiency of regulatory services, and carries out 85 specific tasks.The simulation test of the first round of new securities code segments on the Beijing Stock Exchange is running from February 19th to March 1st. At the same time, companies under the direct review mechanism are intensively entering the listing and issuance period, with 5 companies undergoing the listing review process. According to authoritative sources, the transfer mechanism is expected to make substantial progress.Liu Xiangdong, Chief Analyst of Dongyuan Investment, stated in an interview with Securities Daily that overall, through continuous improvement in hardware and other infrastructure, technology, and system operation efficiency, the reform of the Beijing Stock Exchange has been rapid and steady, far exceeding market expectations.With the gradual deepening of reform, it has also brought policy dividends such as rising valuations and changes in the new stock subscription system to the market, "said Liu Xiangdong.According to Wind data, as of February 21st, a total of 25 companies listed on the Beijing Stock Exchange have released their 2023 performance reports. Among them, 13 enterprises achieved a year-on-year increase in net profit attributable to the parent company, accounting for 52%. The net profit attributable to the parent company of Tongxiang Technology and Wuxin Tunnel Installation increased by 138.64% and 107.12% respectively year-on-year.By industry, individual stocks in the fields of mechanical equipment, power equipment, and automobiles have performed relatively well. Zhou Yunnan, founder of Beijing Nanshan Investment, told Securities Daily reporters that we can focus on high performing stocks and stocks with performance reversals that exceed expectations.Data shows that at the close of February 21st, the price to earnings ratio (TTM) of the CSI 50 Index was 24.65 times. Industry insiders believe that a new round of unexpected market trends is expected to begin within the year.Zhou Yunnan believes that the CSI 50 Index may break through a new high of 1200 points this year.In Liu Xiangdong's view, there are three positive resonances in the Beijing Stock Exchange market. Firstly, in 2024, China's macroeconomic recovery will be positive, promoting the development of small and medium-sized enterprises. The second is that the Federal Reserve may cut interest rates in 2024, which will encourage more foreign investment to flow into the domestic capital market and drive the stock index up. Thirdly, the institutional dividends of the reform and innovation of the Beijing Stock Exchange will bring more investment opportunities, while also raising the valuations of some stocks.
