Two Company IPO Was Rejected &Nbsp; Gem Threshold Raised?

In recent years, the gem has fallen into troubled times. Following the news that we need to improve the delisting mechanism, a piece of news about the threshold of gem listing will be greatly increased in the market.

Although the news has not yet been officially confirmed, in May 17th, two of the 3 companies on GEM board were rejected by the SFC. Market participants said that it was possible to verify the attitude of regulators from the side.

Doorsill quietly upgrade

"To increase the net profit of gem and small and medium-sized board Companies in the last year to 30 million and 50 million yuan respectively."

This news that has been widely rumored recently has already troubled some small and medium investment bank brokerages.

At present, the threshold for gem and small and medium board companies (the net profit in the latest year) is 5 million yuan and 10 million yuan respectively.

"The management has not yet made a clear statement about raising the threshold for the growth enterprise board, but from the recently rejected two companies on GEM board, we are already adjusting the list of top companies."

A Shenzhen investment broker of a medium-sized brokerage firm told reporters.

In May 17th, the SFC's gem bulletin board announced that the first application of Jiangxi Hua Wu brake Limited by Share Ltd (Jiangxi Hua Wu) was adopted, while the first application of Shanghai Tianji Polytron Technologies Inc (hereinafter referred to as "Tianji technology") and Shenzhen city's information technology Limited by Share Ltd (referred to as "pulse mountain dragon") was not approved.

Coincidentally, only from the perspective of net profit, the two companies that have been rejected have indeed reached the high threshold limit.

The prospectus shows that the net profit of Tianji technology and pulse mountain dragon in 2009 was 30 million 195 thousand and 800 yuan and 16 million 944 thousand yuan respectively, while the net profit of Jiangxi Hua Wu reached 46 million 852 thousand and 900 yuan.

The above investment bankers said that from the 79 listed companies and 9 companies that had not yet been listed, the standard of profit basically exceeded the threshold of 5 million yuan required by the gem listing.

"All along, in order to ensure the passing rate of the meeting, most investment banks are selecting items based on profitability indicators close to the small and medium-sized board."

Take precautions against risks

Analysts have speculated that the idea that management has increased the threshold of the listing is mainly related to the implementation of the "direct delisting" system by the gem.

That is to improve the quality of listed companies from the source, so that GEM companies are free from delisting, and also reduce the investment risk of the growth enterprise market.

However, Liu Feng, an analyst at Zhongyuan securities, said in an interview with the international finance daily that there is no direct relationship between the direct delisting and the adjustment of the profit threshold of the gem.

According to the regulations, once a gem company has issued a negative or negative opinion on its financial report, its net assets are negative, and it will not be disclosed on schedule, it will be withdrawn immediately.

"The gem delisting standard is already relatively strict, if we want to prevent delisting, management can adjust the delisting standard."

Liu Feng believes that the threshold of the GEM market is already higher than that of some overseas growth enterprise market. If it continues to improve, the threshold of gem will be close to that of the main board. The original intention of setting up the financing platform and the exit platform for the start-up stage and high-tech companies will be changed.

Insiders also pointed out that a substantial increase in the threshold is not necessarily a good thing, which will plug many small start-ups listed on the road, lost the significance of the gem.

More appropriate is to ensure that companies can be listed on a relatively loose basis in order to ensure the compliance of the listing process and the true disclosure of information.

But we must strictly enforce the policy of delisting.