The IPO audit has quietly changed.
In July, especially since July 10, IPO audits have obviously accelerated. Five IPO audits per week for three consecutive weeks have broken the IPO review practices of 2-3 previous weeks, and the rate of meetings has increased. The current IPO queuing team has a good quality of stock companies.
The spring of IPO is coming again? The IPO rhythm is indeed changing! Significant changes are taking place, both in terms of IPO review speeds and IPO attendance rates. Let us look at the top ten changes in the IPO market.
Key point 1: IPO audit speed
In the past three weeks, the China Securities Regulatory Commission has arranged five start-up companies to meet each other in the past three weeks, which is in sharp contrast with June. In June, the number of IPO audits was small, and the number of single-day audits also decreased accordingly. Excluding the Xiaomi Group, which was scheduled to be reviewed on June 19, the audit committee reviewed a total of nine companies. In May, 16 start-up companies planned to accept the review. In April, 19 start-up companies were scheduled to attend the meeting, and June became the IPO audit low in the year.
Judging from the number of IPO companies audited in a single day, the day with the largest number of single-day audits in June was June 5, and only three companies planned to meet on this day. In addition, on June 12, June 21, and June 26, the number of IPO audits was 2, and on June 19, only one company of Xiaomi Group was accepted for review.
When the market believes that the pace of review in July will continue in June, the review rate of five weekly in the past three weeks broke market expectations. As of July 26, a total of 18 companies were scheduled to start the meeting in July, and 5 were reviewed on Tuesdays since July 10.
In terms of market growth, there are about 18 companies in each month in 2018. Among them, the number of IPOs in January is the highest, with 45. In April, the number of 19 companies ranked second, and in May, there were 16 The family will be ranked third, and the remaining February, March and June will have 12, 10 and 9 companies respectively.
Key point two: the rate of meeting is rising
At the same time as the IPO audit speeds up, the recent meeting rate has also picked up.
According to statistics from brokerage Chinese reporters, there were 16 IPO companies in July (two other cancellations), 11 of which were approved, and the IPO rate rose to about 69%. It will also be IPO since 2018. The overall pass rate of the above meeting was increased to 55.64%.
As of July 26, the China Securities Regulatory Commission issued a number of 124 IPO companies in the 2018 (excluding 12 companies that canceled the audit), of which 69 were approved, 49 were rejected, and 6 were suspended. This year The IPO meeting rate in the first half of the year was 53.7%.
Looking at it alone in July, 18 IPO companies will meet, except for 2 companies that canceled the audit, 11 have a meeting, and 5 have been rejected. The attendance rate is 68.75%.
According to historical data, in the first half of 2017, the audit committee reviewed 275 in one fell swoop and passed 224, with a meeting rate of about 81%. However, since the new “Dafa Audit Committee” took office in October 2017, the IPO companies’ meeting rate has plummeted. The three-month pass rates in the fourth quarter of 2017 were 69.57%, 52.94%, and 56.25%, respectively. Creating a 36% over-the-counter rate in a single month has made the market unstoppable.
Key point three: IPO issuing approval is slow
The pace of approval of the approval by the CSRC is slow, and it is basically maintained in a state of 1-2 approvals a week.
As of July 26, the CSRC issued a total of 59 approvals, including 15 in January, 12 in February, 10 in March, 9 in April, 8 in May, and 9 in June. Family. However, a total of 235 approvals were issued in the same period last year, which was 176 fewer than the same period last year, accounting for over 70%.
As of today, there have been 32 meetings, but there are 32 companies that have not received approvals, including 15 main boards, 10 SME boards and 7 GEM.
Some insiders pointed out that due to the multiple factors such as the economic situation in China and foreign countries, the stock market performance was not satisfactory, especially in the June market adjustment. The regulatory layer considered the market affordability, taking into account the new stock issuance function, and a small amount of new stock supply. Maintaining intent.
Key point four: IPO "congestion lake" digestion
The long-overpold IPO '堰塞湖' phenomenon has been alleviated.
According to the data of the China Securities Regulatory Commission, as of July 19, the CSRC accepted 313 companies that issued and issued depositary receipt certificates. The number of IPO queues decreased from about 500 in early January to about 300 in the first half of the year.
According to relevant persons close to the regulatory level, except for enterprises that remain in the IPO queuing channel due to historical problems, the number of enterprises in the normal audit channel is only over 100, from the enterprise application materials to being arranged for the review, on average Look, this time has been greatly reduced to 9 months.
According to the New Era Securities Research Report, the current average feedback period for companies with pre-disclosed updates in 2017 is 468 days for IPOs, and the average feedback period for companies with pre-disclosed updates from 2018 to 309 days is 309 days. The average feedback period for companies with pre-disclosed updates from 2017 to the present is 333 days.
In the first half of the year, the IPO of the IPO filing company, which was added to the IPO, was alleviated. In addition to disclosing the withdrawal of materials, it was also related to the decline in the number of newly-reported enterprises. As of July 26, the CSRC had the latest acceptance of 66 companies. From January to July, the number of newly accepted enterprises was 2, 1, 7, 5, 11, 37 and 3, which showed an overall upward trend. It is expected that the number of newly-received enterprises will pick up in the second half of 2018, but compared with the number of newly-reported enterprises of more than 220 in the same period last year, the number of newly-reported enterprises has dropped sharply this year.
At the same time that the recent IPO review showed signs of slowing down, the number of IPO approvals issued by the China Securities Regulatory Commission also dropped significantly. The data shows that in the past two weeks, the number of IPO companies issued by the China Securities Regulatory Commission has been one.
Key point five: the withdrawal of material companies
The IPO's auditing standards have not dropped so many companies that were in the wait-and-see period have chosen to retreat. As of July 26, there were 149 IPO termination review companies in 2018. The number of terminations in March was up to 79, and the peak of the number of terminations in March was mainly due to the voluntary review by the audit committee and on-site inspections. Compared with the same period of last year, there were only 54 IPO companies that terminated their review last year, an increase of 36.5% over the previous year.
At the same time, 17 companies that have terminated their review this year have chosen to sprint IPOs again. Among them, two main board IPOs withdrew materials and went public on the GEM, and the remaining 15 were still in the state of counseling and registration.
The insiders pointed out that after the adjustment of the regulatory review standards, enterprises need to re-adapt to the conditional application materials. The previous financial data may be outdated and irregular. It may be more likely to be faced with the rash, and it is better to return and re-polished again. With the acceleration of the IPO review cycle, the preciousness of IPO queuing has decreased.
Key point six: "Penal cancellation" frequently
Since the performance of the new audit committee in October last year, 26 start-up companies have been suspended or canceled before the meeting, and if they are temporarily canceled, they will issue the China Depositary Receipt (CDR). The group has reached 27 times.
Specifically, among the 27 start-up companies that have “removed the door”, 12 of them have been suspended, and half of them are scheduled to be listed on the main board of the Shanghai Stock Exchange, and 2 and 4 starters respectively intend to The Shenzhen Small and Medium-sized Board and the Growth Enterprise Market are listed.
Fifteen companies were canceled for review. Except for Xiaomi Group, which originally planned to issue CDRs, 8 of the remaining 14 companies are scheduled to be listed on the main board of Shanghai Stock Exchange, and 2 of them are listed on SME board and GEM. Times and 4 times.
Some researchers have analyzed that the phenomenon of the frequent occurrence of the A-share IPO “snap-to-door cancellation” stems from the strict review of the Daihatsu Audit Committee. On the other hand, specific to different companies, the reasons are different, and even some specific industries have the same situation. On July 3 and 10, Qingdao Rural Commercial Bank Co., Ltd. (hereinafter referred to as “Qingdao Rural Commercial Bank”) and Zhejiang Shaoxing Ruifeng Rural Commercial Bank Co., Ltd. (hereinafter referred to as “Ruifeng Rural Commercial Bank”) successively Relevant matters need further verification", announced the cancellation of the review.
"Since the establishment of the audit committee, the Dafa Audit Committee has not only improved its attention to performance standards and sustainability, but also conducted strict audits on normative issues, internal control, trust, and even environmental protection. This not only makes the present The IPO has a low rate of attendance, and there are many 'dead cancellations' phenomenon that can be foreseen,” said a large brokerage investment bank in Beijing.
Key point seven: Blackboard, IPO review focus is still the same
Judging from the IPO case, if the proposed IPO company wants to make its dream come true, it must first do a good job in the main business and business compliance. Although net profit is no longer a hard indicator, the current audit committee mainly focuses on financial authenticity, sustained profitability, connected transactions, and business compliance.
Specifically, it involves the sustainability of business capabilities, corporate accounting and financial issues, information disclosure, internal control systems, compliance, etc., indicating that companies that are queuing should still do self-examination and self-examination. Including financial authenticity and rationality, unsound internal control, sustainable profitability, competitive advantage, legal compliance during the reporting period, concentration of suppliers, excessive reliance on major customers, connected transactions and Business independence is often questioned, accounting treatment, and accounting standards must be regulated.
Key point eight: strict review of standards has not dropped
Although the recent IPO review has accelerated and the IPO rate has increased, this does not mean that the IPO's strict review standards have been loosened. The above two cases are mainly caused by factors such as on-site inspection and “IPO is required to operate for three years before the shell can be borrowed”. A large number of enterprises have withdrawn the application materials, and the number of queued enterprises has decreased, and all the companies with relatively good texture can be left behind. .
In June of this year, various brokerage investment banks received the latest IPO review guidelines issued by the regulatory authorities, demanding that the “declaration of illness” be resolutely eliminated, and that in the future, a group of enterprises will be dismissed according to the latest financial indicators, and the high-quality listed companies will be accelerated. The pace of listing has made the scale and quality of direct financing of IPO companies in the A-share market effectively improved.
Looking back on the past, fictional performance, chaotic concepts, and fraudulent listings are common in the A-share market. The profit in the first year of the listing, the same as the following year, and the loss in the next three years, the performance has changed a lot, the issuer has gone away, and the ordinary shareholders are deeply immersed in it. Ordinary investors are easily "fudged" because of lack of professional knowledge and information asymmetry. At this time, the audit committee has a real role to play, and blocking the listing route of bad companies from the source is its due responsibility.
Key point nine: future regulatory tightness judgment
For the future, the IPO review will show how the situation, Pan Xiangdong, chief economist of New Era Securities, believes that the review will be further tightened, and the accountability will be more stringent; the pace of review will be accelerated, but the pass rate will not increase significantly; It will further tilt towards new economic enterprises; the queue time for high-quality enterprises will be shortened, the listing speed will further increase; the IPO barrier lake phenomenon will be alleviated, and the supervision and control mechanism will be further improved; the number of diseased IPO enterprises will be further increased. Brokerage investment banks will also be promoted to the normal state.
Industry insiders also pointed out that the IPO review will maintain a low pass rate. Compared with the first half of the year, the companies currently queued are relatively better in all aspects. The pass rate in the second half of the year has slightly rebounded, but the overall forecast is maintained at 50% to 60%. between. At the same time, with the rectification of some enterprises that have withdrawn their materials, and more and more listed companies and sponsors are becoming familiar with the new auditing environment, more companies are expected to regain the confidence of A-share IPOs in the second half of the year, and some of them will be terminated. It has also re-impacted the IPO.
At the same time, there will be no more "retraction tides". Generally speaking, the situation of material withdrawal is roughly divided into three categories. The first type of situation is that the enterprise “has a disease” to declare an IPO. Its own performance is not satisfactory and its qualifications are flawed. Before such companies are lucky, they will declare first and then queue up. In the process of rectification, if the rectification is still unqualified, the material can only be withdrawn first; the second type is the sudden occurrence of the enterprise during the audit, such as administrative punishment; the third type of situation is the external environmental changes of the enterprise, such as the industry downturn leads to the enterprise The performance growth is weak.
Up to now, the basic withdrawal of the "disease-stricken" queuing enterprises has been withdrawn. Currently, the enterprises in trial have already known that they will continue to be strictly examined, and there will be few companies that are lucky enough to declare IPOs. The basic quality should be Guarantee, the self-confidence of enterprises will increase, and the withdrawal will naturally ease.
Key point ten: These ten brokers will compete for the IPO market
In the case of an IPO audit that can be expected, how to get a slice of the IPO market, test the experience and ability of intermediaries, especially investment banks. Judging from the sponsors of the current IPO queuing companies, these ten brokers have come to the fore.
Top ten IPO queuing company sponsors
From the above picture, the head brokers have inherent advantages in IPO competition. CITIC Securities, CITIC Jiantou, GF Securities, China Merchants Securities and other four brokers are far ahead in IPO investment bank sponsorship, Haitong Securities, Huatai United, CICC, Oriental Citigroup and Guojin Securities and Minsheng Securities are the second echelon.
There are also more than 100 IPO queuing projects divided by small and medium-sized brokers.
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