The CSRC only reviewed 17 companies’ IPO applications so far this month.
Fujian Acetron New Materials Co., Ltd. Cre8 Direct (Ningbo) Co., Ltd. and Hunan Jiudian Pharmaceutical Co., Ltd. were approved to conduct initial public offerings on the ChiNext Board on August 23. And 5 companies, including Hengdian Film Co., Ltd., obtained approval to conduct IPO a day earlier.
The Securities Daily reporter noted that compared with the previous months, the pace of IPO review has slowed significantly in August. The China Securities Regulatory Commission (CSRC) only reviewed 17 companies’ IPO applications so far this month. Among them, 14 passed the review, while 3 failed in the review. The number of companies that submitted IPO application from March to July was 52, 50, 64, 42 and 54, respectively.
Meanwhile, the number of IPO approvals issued by the CSRC has been less than 10 for 13 consecutive weeks. The pace of IPO has slowed slightly. “With the normalization of IPO, it’s normal that there are more or less companies to conduct IPO. The key is to strictly control the quality of these companies,” an investment banker from a securities company said.
Although the number of new listed companies quickly increased in 2017, to conduct IPO in the A-share market become increasingly difficult. One of the demonstrations is that the number of companies whose IPO applications were rejected has increased remarkably. The Securities Daily learnt that a total of 46 companies were rejected in IPO review. Meanwhile, 67 companies were suspended for IPO review. The number reached a peak in April with 18; it recorded in 14, 14 and 11, respectively in March, June and July.
The CSRC previously that it suspended the IPO review of these companies mainly due to four reasons: abnormalities in state of operation or financial conditions, question about the normative of financial accounting, performance decline and adjustment in equities or strategies.
As more enterprises were suspended for IPO review, the number of enterprises whose IPO applications were rejected increased remarkably this year, and reached 46. Most those companies rejected come from the manufacturing sector, accounting for over 60 percent of the total number. They are mainly engaged in equipment manufacturing, instrument manufacturing, metal manufacturing, chemical manufacturing. However, it should be noted that most companies applying for IPO are also from the manufacturing sector.
An industry insider said that although the regulators are promoting the normalization of IPO, it has not changed its standards and ideas in the review process or did not lower its requirements to accelerate IPO review.
Translated by Coral Zhong
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