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IPO queuers scan: companies with a net profit of less than 80 million appear, "high-tech" may become a customs clearance password

2021-09-15


Data show that three companies have disclosed IPO filings since November. Compared with the previous period, the number of newly declared enterprises has not changed much. But it is worth noting that many of the newly declared IPO companies have a net profit below 80 million. "It will be difficult for a traditional industry with a net profit of less than 80 million to survive smoothly, but if it is a new economy with high technology content and is supported by the regulators, even if the profit is lower, it can survive." An investment banker from a small and medium-sized securities firm express.

 

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Image source: Visual China

Since the beginning of this year, there have been 9 companies whose net profit in 2017 was less than 80 million but successfully passed the meeting. But it is worth noting that most of these 9 companies belong to high-tech industries and have strong R&D capabilities.

Data shows that three companies have disclosed IPO filings since November. Compared with the previous period, the number of newly declared enterprises has not changed much. But it is worth noting that many of the newly declared IPO companies have a net profit below 80 million.

However, a number of investment bankers told reporters that this move does not mean the relaxation of IPO net profit standards. "There is still more than half a year from the declaration to the final meeting. Before the meeting, these companies can update the data to 2018. These companies either have confidence in the net profit for the whole year of 2018, or want to bet on rumors that the net profit will be relaxed next year." On November 8, an investment banker from a large securities firm told the 21st Century Business Herald reporter.

In fact, the current CSRC's IPO review still maintains a comprehensive and strict state. According to the reporter's statistics, the probability that the net profit attributable to shareholders of the parent company in 2017 in the recent Shanghui enterprises will be less than 80 million will be rejected. Since the beginning of this year, all companies with net profit below 80 million will be rejected on the main board.

The data shows that the annual net profit of less than 80 million will be very sad, but there are some lucky ones. According to Choice data, since the beginning of this year, there have been 9 companies whose net profit in 2017 was less than 80 million but successfully passed the meeting. But it is worth noting that most of these 9 companies belong to high-tech industries and have strong R&D capabilities.

"It will be difficult for a traditional industry with a net profit of less than 80 million to survive smoothly, but if it is a high-tech, new-economy enterprise supported by regulators, and it has many patents, such as biomedicine, AI, etc., then even if Low profits will also pass the meeting." The above-mentioned investment banker told reporters.

Net profit of newly declared companies falls

At the beginning of this year, there were rumors in the industry that for new companies applying for IPO, the main board required that the net profit in the last year should not be less than 80 million yuan. According to the statistics of the 21st Century Business Herald reporter, as of November 8, a total of 33 main board companies have filed for IPOs this year. The 2017 net profits of companies declared before October were all above 80 million (except Xiaomi Group).

But since October, new companies with net profit below 80 million have appeared, such as Xiamen Yaxun Network and Jiaxing Star Semiconductor. Xiamen Yaxun Network first disclosed the application draft on October 12. The filing revealed that Yaxun Network achieved a net profit of 73.73 million yuan in 2017, and the net profit in the first half of this year was only 23.08 million yuan.

Another applicant company, Jiaxing Star Semiconductor, also had a net profit of only 52.58 million yuan in 2017, which was the lowest level for companies that declared on the main board this year. But in the first half of this year, it achieved a net profit of 46.56 million yuan. The 2017 net profit level of these two companies has become the lowest level of companies applying for the main board this year.

Recently, the net profit of enterprises declared on the Growth Enterprise Market and the Small and Medium-Sized Enterprise Market is also frequently below 50 million. For example, the SME board company Mingguan New Materials declared on November 2, the net profit in 2017 was only 39.84 million yuan; the GEM company Alte Automotive Technology declared on September 28, the net profit in 2017 was only 46.17 million yuan. This was largely non-existent until September.

Do these signs mean that the performance standards for IPO filing companies have been relaxed? However, a number of investment bankers told reporters that there is currently no sign of any loosening of the IPO review by the regulatory authorities.

"Although the net profit of newly declared enterprises in 2017 may not meet the requirements, it will take an average of 6-9 months from declaration to review and then to the final report. The performance data of these enterprises will also be updated to the full year data of 2018. Some enterprises It may be expected that the annual performance in 2018 will be better." On November 8, a senior security agent of a large securities company in Beijing told reporters.

For example, although the net profit of Alte Auto Technology in 2017 was less than 50 million yuan, the net profit in the first half of this year reached 49.01 million yuan. According to this estimate, the net profit of Alte Auto Technology for the whole year can exceed 80 million yuan.

"Speaking directly, these companies are also occupying positions, or some companies are betting that the IPO review will be relaxed next year. If it is really relaxed, they will become the first lucky ones. If it is not relaxed, they can also delay the meeting or withdraw materials at that time. ." Bao Dai, a small and medium-sized securities firm in South China, told reporters.

IPO review is still strict

In fact, a number of investment bankers have recently stated that the IPO standard is likely to be lowered in the future. "There are very few companies that meet the requirements of 80 million now." Many investment bankers said so.

But despite this, from the current point of view, the regulators have not relaxed the IPO review standards. The high probability that the net profit attributable to shareholders of the parent company in 2017 is less than 80 million will be rejected.

On November 6, Guangdong Rifeng Cable, an enterprise planning to be listed on the SME board, temporarily canceled the audit before the meeting. The China Securities Regulatory Commission stated that in view of the relevant matters of Guangdong Rifeng Cable that need further verification, it has decided to cancel the audit. It is worth noting that the net profit of Guangdong Rifeng Cable in 2017 was 61.82 million yuan, and the net profit after deducting non-recurring gains and losses was 61.48 million yuan.

Another company that canceled the review is Changzhou Tongbao Optoelectronics, which plans to list on the Growth Enterprise Market. Changzhou Tongbao Optoelectronics, which was supposed to launch the meeting on October 30, also temporarily canceled the review before the review meeting. The China Securities Regulatory Commission stated that in view of Changzhou Tongbao Optoelectronics having applied to withdraw the application materials, it decided to cancel the review. The filing revealed that Tongbao Optoelectronics’ net profit in 2017 was 62.74 million yuan.

In addition, Zhuhai Allianz Ruishi Technology, Zhejiang Hengqiang Technology, Shenzhen Yuchi Monitoring Technology, Beijing Jinfang HVAC Energy Saving Technology and many other companies that were recently rejected had net profits of less than 80 million in 2017. "In fact, there is no distinction between sectors, and basically the net profit is above 80 million." The above-mentioned small and medium-sized brokerage Baodai told reporters.

In fact, since the beginning of this year, the main board companies that have successfully passed the IPO review have all had a net profit of more than 80 million yuan attributable to shareholders of the parent company in 2017, and no company with a net profit of less than 80 million yuan has successfully passed the meeting.

"At present, the IPO review is still under strict review. The industry has been saying that performance requirements have been relaxed before, otherwise there will be very few reserve companies, and the pressure on corporate performance will also be great, which is not conducive to supporting the real economy. But now is a relatively special time. It is because some personnel at the regulatory level are changing, and the second is the launch of the Science and Technology Innovation Board, so it is doubtful whether the IPO review standards will change in the future." On November 8, a person from an investment bank of a large securities firm in Beijing told reporters.

New economy enterprises receive support

The data shows that the annual net profit of less than 80 million will be very sad, but there are some lucky ones. According to Choice data, since the beginning of this year, 9 companies with a net profit of less than 80 million in 2017 have successfully passed the meeting.

"It will be difficult for a traditional industry with a net profit of less than 80 million to survive smoothly, but if it is a new economy with high technology content and is supported by the regulatory authorities, even if the profit is lower, it can survive." An investment banker from a small and medium-sized securities firm express.

The industries of the 9 companies whose profits were less than 80 million but successfully passed the meeting were special equipment manufacturing, professional technical service, pharmaceutical manufacturing, and general equipment manufacturing.

An obvious example is Zhejiang Fenglong Electric Co., Ltd. In 2017, the net profit was only 47.81 million yuan, and the net profit after deduction was 42.54 million yuan, but it still passed the meeting smoothly, because it is a high-tech enterprise.

The prospectus discloses that Zhejiang Fenglong Electric is a high-tech enterprise with a provincial R&D center. As of the date of this prospectus, the company has obtained 58 patents, including 9 invention patents (including 2 U.S. patents) and utility model patents. 49 items. The R&D projects are listed as "National Torch Program Industrialization Demonstration Project", "National Science and Technology SME Technology Innovation Fund Project", etc., and have won provincial, municipal and district-level scientific and technological achievements awards for many times.

The same goes for Jiangsu Aipeng Medical. In 2017, the net profit was 57.92 million yuan, and the net profit after deduction was only 45.58 million yuan, but it still passed the meeting smoothly. The prospectus disclosed that as of the date of signing this prospectus, the company has 58 patents, 3 Class III medical device registration certificates, and 9 Class II medical device registration certificates, and has passed ISO9001, ISO13485 and other quality management system certifications. Some products Obtained EU CE certification and US FDA certification.

According to the statistics of 21st Century Business Herald reporters, most of these companies with a net profit of less than 80 million have strong research and development capabilities. The company itself has a number of patents. For example, Qingdao Weilan Bio has 189 domestic authorized invention patents and U.S. authorized patents. 3, and 9 PCT international applications; as of the end of 2016, Mingde Bio has 150 patents.

In fact, since the beginning of this year, regulators have been strongly supporting and encouraging the new economy. At the beginning of this year, the regulatory authorities have repeatedly expressed their support for the new economy and unicorn companies. Relevant leaders of the CSRC have also stated many times that they will create tools and institutional arrangements, focusing on supporting innovative, leading and demonstration enterprises, and there will be many innovations in supporting the reform of the IPO system for new economy enterprises.

"If the industry in which the company is located is strongly supported by national policies, such as biomedicine, chips, etc., and it has a number of core technologies and invention patents, even if the profit is less than 80 million, such a company will pass the meeting smoothly." A Beijing securities company Investment bankers told reporters.

At the latest training meeting of the issuance department on November 2, the relevant person in charge also pointed out that to support the new economy and new business formats, enterprises with excess production capacity and backward industries that need to be eliminated should not apply. 73 companies that have passed the IPO meeting this year are high-tech companies, accounting for 80% of the IPOs. (21st Century Business Herald Zhang Xinpei)

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