Two Shocks, IPO Failure, Qinsen Garden To Select Layer Waiting For Opportunity

Another new third board enterprise gave up IPO switch to select layer.

Recently, Qinsen garden, an enterprise listed on the new third board, issued the notice on application for public offering of shares and listing at the selective level. It said that it had submitted the guidance registration materials for the public offering of stocks to unspecified qualified investors and listing at the selective level to Shanghai Securities Regulatory Bureau on December 7, 2020, and was accepted by the Shanghai Securities Regulatory Bureau on December 8 Big securities.

Not long ago, the Shenzhen Stock Exchange and the Shanghai Stock Exchange respectively solicited public opinions on the listing of companies listed on the new third board on the growth enterprise market and the science and technology innovation board, and made clear the conditions, audit mechanism and procedures, and listing connection arrangements for companies listed on the new third board to be listed on the science and technology innovation board or the science and technology innovation board.

21st century economic reporter noted that before this, Qinsen garden had twice failed in IPO. In the first half of this year, due to the impact of the new crown epidemic, the company's operating income fell by nearly 30%, and the net profit attributable to shareholders of listed companies nearly cut back. However, Qin Sen garden chose "circuitous tactics".

IPO failure after two shocks

According to the public information, Qinsen garden was listed on the new third board on April 1, 2015. It is a comprehensive landscape enterprise with cross regional development. Its main business is landscape engineering construction, landscape design, garden maintenance and seedling planting.

At the end of December 2016, Qinsen garden submitted a prospectus to Shanghai stock exchange for the first time, and planned to raise about 620 million yuan, of which 560 million yuan was used to supplement working capital and 60 million yuan was invested in the construction of R & D center.

However, on September 4, 2018, 21 months after queuing up, Qinsen garden, which should have been reviewed at the 138th examination and approval meeting, was suspended from voting. One month later, Qinsen garden was held again (October 10, 2018). However, due to large fluctuation of net profit, inconsistency between net profit growth and operating income, reasons and rationality of inconsistency between net operating cash flow and current net profit, settlement method of project fund source and land use, etc., Qinsen Garden IPO was not approved.

After the failure of the initial IPO, Qinsen was not discouraged. On July 1, 2019, Qinsen submitted the registration materials of IPO guidance to Shanghai a securities regulatory bureau again. At this time, the sponsor changed from Everbright Securities to Dongxing securities.

However, on December 4 this year, Qinsen shares terminated the counseling agreement with Dongxing securities because of "the adjustment of the company's capital market listing strategic planning".

After the "stock selection and listing" announcement, the company issued a "stock listing announcement" and issued it in the stock market.

"The threshold of the selection layer is nominally similar to the small and medium-sized innovation technology and the main board, but the gap of the selection layer should be relaxed in practice. The main reason is that there is a high threshold for investors in this market, and professional investors are the main participants. Their judgment ability of value and risk is much higher than that of the SME main board market. The selection layer is a transitional market, and everyone is waiting for the right time Kuang Yuqing, founder of lens company, pointed out to the reporter of 21st century economic report.

Sprint select layer waiting for turning board

According to the public data, the net profit after deducting the non recurring profit and loss attributable to the shareholders of the listed company in 2018 and 2019 were respectively 99.5966 million yuan and 106.5673 million yuan, and the weighted average return on equity (net profit after deducting non recurring profit and loss attributable to shareholders of listed company) were 14.57% and 13.68% respectively, which was in line with the hierarchical management measures The financial conditions for entering the selection layer as stipulated in Item 1 of paragraph 2 of Article 15.

In the first half of 2020, Qinsen's operating income reached 368 million yuan, a year-on-year decrease of 29.80%; the net profit attributable to shareholders of listed companies was 28.1377 million yuan, a year-on-year decrease of 46.61%.

In fact, Qinsen is not the first new third board company to invest in the selection layer due to the failure of IPO. Before this, such enterprises as liujinnian, Airong software and Tiandi No.1 had failed in IPO, but were listed in the selection layer.

However, it is worth mentioning that, compared with the A-share market, there is still a certain gap between the turnover volume and valuation of the select layer enterprises. In the previous transfer plan, the threshold for the selection level enterprises to switch to A-share market is not low.

Zhu Haibin, chief analyst of Anxin securities's new third board, pointed out to reporters: "the selection layer and A-share market of the new third board belong to different sectors of the multi-level market from the current big strategy point of view. The threshold of board transfer is relatively high, but the essence is that the profit volume and scale of these companies should reach the standard of listing."

Kuang Yuqing also said: "the threshold of board transfer is to converge with IPO, but if the performance of selection layer is good, corporate governance, compliance and other aspects have been excellent, it will provide very important credit endorsement for later board transfer, and in theory it should be faster than direct IPO. The focus of the board will no longer be on the registration board, but the registration board will soon be expanded to meet the requirements of the registration board

Kuang Yuqing further analyzed that for some enterprises that have obstacles to rush for IPO directly due to the cyclical impact of the industry, it would be a good choice if they met the conditions to wait for the opportunity. After all, the trading of the selection layer would be more active, not like a pool of stagnant water like other stocks in the new third board, which provided a platform for its fixed increase or other forms of financing in the future.

Zhu Haibin also said: "whether it is to apply for registration in the selected layer of the new third board or A-share IPO, we must pay special attention to the quality of the company. The new third board market has its own characteristics. It is not necessarily that its threshold is lower than that of a shares. Specific to the industry, it depends on whether it is a restrictive industry, or whether the listing threshold of the same industry is low. "