After the introduction of the new “National Ninth Regulations” in the Resource Mall, companies that are rushing to go public on the Shouye Board may not receive admission tickets.
Recently, the Shenzhen Stock Exchange announced the “Rules for Listing of Stocks on the Shouye Board of the Shenzhen Securities Business Exchange (Revised Draft of the 2024 Farewell Law)”, proposing to improve the first and second sets of listings on the Shouye Board, increasing the net profit target for the past two years from 50 million yuan to 100 million yuan in the first set of listings, and deleting the request for a net profit of no less than 60 million yuan in the past year; Increase the estimated market value of the second set of listings from 1 billion yuan to 1.5 billion yuan, and increase business expenses from 100 million yuan to 400 million yuan in the past year (the lower of net profit before and after deducting non recurring gains and losses).
After the reform, the first set of listed companies on the Shouye Board will have a standard of “positive net profit in the past two years, with a cumulative net profit of no less than 100 million yuan, and a net profit of no less than 60 million yuan in the past year”; The second set of listing criteria is “an estimated market value of no less than 1.5 billion yuan, a net profit of positive in the past year, and business expenses of no less than 400 million yuan”.
Over the years, the Shouye Board has attracted many companies with a relatively short establishment time, small scope, and yet to make a name for themselves to go public. With the release of new regulations, among the companies lining up on the Shouye Board, who can inherit the “breakthrough” and who can be stopped by the new regulations have become one of the core concerns of shopping malls.
According to Wind data, as of April 19, 2024, there are 81 companies that have disclosed their pending IPOs on the conservative board, of which 73 have chosen the first set of IPOs on the conservative board, and the other 8 have chosen the second set.
Interface message statistics show that only a few of these companies that are currently queuing have updated their 2023 financial data and all meet the above requirements, while the remaining majority are currently in a state of interruption in updating their financial materials. Looking at the achievements of 2021 and 2022, some companies are facing significant pressure to break through and close down.
Who is blocked by the net profit threshold of 60 million yuan?
According to statistics from Interface News, currently, the 73 companies that have chosen the first set of listing standards on the Shouye Board have a net profit of over 40 million yuan in 2022. This means that as long as these companies realize a net profit of no less than 60 million yuan in 2023, they will not meet the new regulatory requirements and inherit the “break through” policy.
Among them, most companies have achieved a net profit of 60 million yuan in 2022, which is not a lot of pressure, but some companies are facing considerable provocation.
Some companies only need to realize a year-on-year growth of less than 10% in their net profit in 2023, such as Shenzhen Sbit Technology Co., Ltd. (hereinafter referred to as Sbit), Sail Communication Service Technology Co., Ltd. (hereinafter referred to as Sail), and Gene Technology (Shanghai) Co., Ltd. (hereinafter referred to as Gene Technology).
Spitt specializes in the research, production, and sales of industrial and automotive grade magnetic components and new power vehicle charging station power modules. In the past few years, the company has benefited from the spring breeze of the new power industry and its achievements have rapidly declined. In 2020, its non deduction net profit was still in a loss situation, but in 2021, it deteriorated and declined. The net profit increased more than 22 times year-on-year to reach 30.95 million yuan, and the non deduction net profit surged 64 times to reach 30.91 million yuan. In 2022, its net profit broke through the 60 million yuan close after inheriting and deleting over 95%, and its net profit after deducting non income increased by more than 87% year-on-year to 57.9 million yuan, with only a difference of about 2 million yuan remaining after an interval of 60 million yuan. The deduction of non net profit in 2023 only requires inheritance and deletion of 3.63% to meet the standard.
Sail Stock is a high-tech enterprise that specializes in amateur communication and collection technology services, intelligent operation and maintenance products, wireless and collection deep exploration products, and processing plans. Relying on the three major operators, the company has maintained a long track record in the past few years. In 2021 and 2022, the company’s net profit after deducting taxes increased by more than 50% for two consecutive years, reaching 35.5 million yuan and 57.77 million yuan, respectively. That is to say, in 2023, its non deductible net profit only needs to be reduced by 3.86% year-on-year to reach 60 million yuan.
Some companies, such as Suzhou Yuancheng Technology Co., Ltd. (hereinafter referred to as Yuancheng Technology), Beijing Yicheng Interactive Faji Technology Co., Ltd. (hereinafter referred to as Yicheng Interactive), and Shanghai Baiying Biotechnology Co., Ltd. (hereinafter referred to as Baiying Biotechnology), need to achieve a net profit reduction of 10% to 20%.
Yuancheng Technology is a smart urban service provider, with almost stagnant net profit and non deductible net profit in 2022, reaching 52.72 million yuan and 50.66 million yuan respectively. In 2023, its net profit and non deductible net profit need to be positively adjusted, with year-on-year adjustments reaching 13.82% and 18.45%, in order to break through 60 million yuan.
Yicheng Interactive is a bank IT processing plan supplier. In 2022, the net profit after deduction was relatively weak at 54.34 million yuan, a year-on-year decrease of 4.85%. In 2023, the net profit after deduction needs to increase by 10.42% year-on-year to avoid involving 60 million yuan.
Baiying Biotechnology is a CRO (pharmaceutical research and development outsourcing) enterprise, with a relatively weak net profit of 54.41 million yuan in 2022, a year-on-year decrease of 18%. In 2023, if it continues to increase by 10.27%, it will not reach 60 million yuan.
Another company, Anhui Zhaoyin Information Technology Co., Ltd. (hereinafter referred to as Zhaoyin Technology), needs to reduce its net profit by more than 35% in 2022 in order to obtain admission tickets.
As one of the providers of IT processing plans for investment governance business in Action Bank, Zhaoyin Technology provides software development and technical services to financial institutions mainly focused on banks, mainly used in related fields such as wealth management, investment banking, and self operated capital investment.
According to the latest prospectus disclosed by Zhaoyin Technology at the end of December 2023, the company had a net profit of approximately 70000 yuan deducted in 2020, and its main business only achieved a breakeven point; In 2021, the net profit after deducting taxes increased by 616 times year-on-year and reached 43.29 million yuan; In 2022, the deduction of non net profit was almost stagnant, with a year-on-year decrease of only 2.33%, reaching 44.3 million yuan.
That is to say, in 2023, the non deduction net profit of Zhaoyin Technology will increase by at least 35.45% compared to 2022, in order to reach the threshold of 60 million yuan.
Zhaoyin Technology officially embarked on the path of IPO on the conservative board in May last year, after being listed in the stock to equity conversion system in 2017. In January of this year, the Shenzhen Stock Exchange sent a second round of assessment inquiry letter to it. Previously, the Shenzhen Stock Exchange reported a total of 16 achievements to Zhaoyin Technology, including industry growth, business forms and related information disclosure, positioning on the conservative board, main business expenditures and their changes, name verification and expenditure confirmation strategies, main customer mutual assistance situations, accounts receivable and contractual assets, etc.
Who is blocked by the 400 million yuan business development barrier?
From the perspective of the second set of standards on the Shouye Board, two companies have not yet reached an annual expenditure of 400 million yuan. One is Shandong Bainuo Pharmaceutical Co., Ltd. (hereinafter referred to as Bainuo Pharmaceutical) with a business expenditure of 366 million yuan in 2022, and the other is Nanjing Haina Pharmaceutical Technology Co., Ltd. (hereinafter referred to as Haina Pharmaceutical) with a business expenditure of 271 million yuan in 2022.
According to acquaintances, Bainuo Pharmaceutical is located in the High tech Zone of Jinan City. It is an enterprise that provides pharmaceutical research and development and delivery services for customers, mainly dealing with CRO business and raw material medicine business.
According to the prospectus, Bainuo Pharmaceuticals has achieved double growth in operating and net profit in the past few years. However, the company has also shown in the danger warning that with the slowdown in the number of requests and approvals for generic drugs in China in recent years, the industry may face more intense mutual assistance, and the company’s operations may face adverse effects. It is helpless to maintain a high-speed growth in its deeds.
From 2020 to 2022, the business expenses of Bainuo Pharmaceutical were 127 million yuan, 233 million yuan, and 366 million yuan, respectively, with a year-on-year decrease of 51%, 83%, and 57%. This means that in 2023, to reach 400 million yuan in business development, Bainuo Pharmaceutical only needs to increase by 9.40% year-on-year. Looking at the previous period of business development reduction, it is not difficult. In the first half of 2023, it has realized business expenses of 239 million yuan, a year-on-year decrease of 47.74%.
Compared to Bainuo Pharmaceuticals, Haina Pharmaceuticals appears to be under double pressure.
Haina Pharmaceutical is also a pharmaceutical research and development enterprise, with a focus on chemical generic drugs and overall improvement of refurbished drugs. For the operational form, Haina Pharmaceuticals particularly exaggerates it, which is different from the conservative CXO (pharmaceutical outsourcing) industry. It has created a business form of “CXO+MAH (pharmaceutical market approval holder system)”, mainly divided into two categories: pharmaceutical research and development services and reserved type sales.
Based on this form, Haina Pharmaceutical has experienced rapid growth in just a few years. From 2020 to 2022, the company achieved revenue of 57 million yuan, 168 million yuan, and 271 million yuan respectively, with year-on-year growth rates of 195% and 62% in the following two years. From the perspective of dividend ability, the company suffered a net profit loss of 28.71 million yuan in 2020, and began to turn losses into profits in 2021. The net profits in 2021 and 2022 were 11.57 million yuan and 6.802 million yuan, respectively.
For Haina Pharmaceutical, in 2023, its revenue will exceed 400 million yuan, which means that the year-on-year growth rate will reach 48%. The answer to whether the company can achieve this goal under the fierce red sea cooperation in the generic drug industry remains to be announced.
At present, Bainuo Pharmaceutical’s IPO is also in a state of interruption in innovative financial materials. In November last year, the company sent a second round of assessment inquiry letter. In the previous round of inquiries, the Shenzhen Stock Exchange asked Bainuo Pharmaceuticals about their achievements in 16 aspects, including continuous operational capabilities, business forms, mutual aid formats and related information disclosure, outsourced R&D services and self-developed capabilities, business compliance and internal control effectiveness; Fundraising and investment objectives, peer mutual assistance and related business operations, and discount factors with high gross profit margins.