2021 is a well deserved new share issuance year. The scale of new share issuance and fund-raising has exceeded 540 billion yuan, and the number of IPO projects has exceeded 520, breaking the highest record in the history of A-share IPO, which also makes the equity financing market in 2022 highly expected. What are the special features of the IPO market at the beginning of 2022?
First, there were obvious signs of recovery in the meeting rate in January this year. According to statistics, by the end of January this year, 33 of the 36 projects under review had successfully passed the meeting, with a meeting rate of 91.67%. In 2021, the meeting rate once dropped to 88.07%, especially in November last year, the meeting rate once dropped to 81.58%.
Second, although this year has just started for one month, the number of IPO termination enterprises has reached 22, an increase of 30% on the basis of 16 termination last year. In particular, many enterprises selected for on-site inspection frequently and intensively withdraw their orders. For example, on January 7, in the first batch of on-site inspection carried out by the CSRC in 2022, 4 of the 9 enterprises selected have submitted withdrawal applications.
Third, the IPO fund-raising scale in 2022 continued to grow on the basis of the high increase last year. By the end of January this year, the IPO fund-raising scale had exceeded 220 billion yuan, an increase of more than 37% over the same period last year.
Fourth, the registration time of IPO enterprises is shortened. For example, it took only 22 days for the technology innovation board enterprise Hawthorne Huatong to get the approval, which is the fastest one to get the approval. Another 19 enterprises completed the process from submitting registration to obtaining approval in less than 2 months.
Fifth, the comprehensive registration system is obviously an important starting point for this year’s capital market reform. Under the registration system, the CSRC has put forward higher requirements for the practice quality and relevant responsibilities of intermediaries.
focus 1: the acceleration of new share issuance is strong on the basis of last year
2021 is a well deserved new share issuance year. Both the fund-raising scale and the number of new shares have set a new record in the history of A-share IPO. According to statistics, the total fund-raising scale of A-Shares in 2021 was 542.675 billion yuan, which continued to increase by 13% on the basis of the fund-raising peak of 480 billion yuan in 2020; A total of 524 companies completed IPOs last year, an additional 87 compared with 2020. Among them, there are 122 main board markets in Shanghai and Shenzhen, 162 science and innovation boards, 199 gem and 41 Beijing stock exchange.
From the performance of a single quarter, the trend of fund-raising scale increasing quarter by quarter is very obvious. According to statistics, the IPO fund-raising scale from the first quarter to the fourth quarter of 2021 was 78.35 billion yuan, 135.644 billion yuan, 161.145 billion yuan and 167.536 billion yuan respectively.
According to the statistics of listing date, there were three lead underwriters with an IPO underwriting amount of more than 50 billion last year, namely Citic Securities Company Limited(600030) , China International Capital Corporation Limited(601995) and China Securities Co.Ltd(601066) . Huatai united and Haitong Securities Company Limited(600837) raised more than 30 billion yuan and Guotai Junan Securities Co.Ltd(601211) raised more than 20 billion yuan.
It is worth noting that among the top 10 securities companies with IPO fund-raising scale, Citic Securities Company Limited(600030) has 68 underwriters, far ahead. However, in terms of the average fund-raising scale, China International Capital Corporation Limited(601995) significantly beat its peers with 3.045 billion yuan, showing a small but refined strategy for large projects.
The strong expansion acceleration of the equity financing market continues this year. According to statistics, according to the listing date, as of January 31, the number of new share issuers and IPOs this year was 32. Although the number decreased by 7 compared with the same period last year, the fund-raising scale reached 221.086 billion yuan, an increase of 37.2% compared with 161.126 billion yuan in the same period last year.
focus 2: the concentration of equity financing market slows down, but the head advantage is still obvious
There is no doubt that “the strong is always strong” is still a significant feature of the equity financing market. In 2021, the total principal commitment of the top 10 securities companies in equity financing accounted for 68.6%. However, compared with the previous two years, the concentration decreased slightly. In 2019 and 2020, the total amount of lead underwriters of the top 10 securities companies in equity financing accounted for 72.2% and 74.6% respectively.
Overall, IPO underwriting continues to focus on the top securities companies, and the market share is relatively stable. From 2019 to 2021, Citic Securities Company Limited(600030) , China International Capital Corporation Limited(601995) , China Securities Co.Ltd(601066) , China Merchants Securities Co.Ltd(600999) , Huatai united, Guotai Junan Securities Co.Ltd(601211) and other six securities companies ranked among the top 10 in terms of underwriting scale for three consecutive years. Huatai united, Guotai Junan Securities Co.Ltd(601211) , Minsheng securities, Oriental Investment Bank, Everbright Securities Company Limited(601788) and so on show the increase of market share year after year.
After entered 2022, by the end of January, the cumulative number of projects in the meeting of 70 securities companies had reached 839, of which Citic Securities Company Limited(600030) had the most projects in the meeting, with 100. Citic Securities Company Limited(600030) and Guotai Junan Securities Co.Ltd(601211) are 65 and 57 respectively. There are also China International Capital Corporation Limited(601995) , Huatai united, Haitong Securities Company Limited(600837) , and Minsheng securities.
In terms of Beijing stock exchange, as of the end of January, 68 projects of 31 securities companies were under review. Among them, open source securities and Shenwan Hongyuan Group Co.Ltd(000166) have the largest number of projects under review, with 7 each; Anxin securities has 4 companies under review; Three projects are under review for Soochow Securities Co.Ltd(601555) , Caitong Securities Co.Ltd(601108) , Western Securities Co.Ltd(002673) , Zhongtai Securities Co.Ltd(600918) , Northeast Securities Co.Ltd(000686) , China Securities Co.Ltd(601066) , China Industrial Securities Co.Ltd(601377) .
focus 3: the IPO passing rate in January 2022 is relatively warmer
While the IPO Financing scale continues to expand, the project passing rate has attracted more attention. According to statistics, in 2021, there were 503 audit projects and 443 conference projects, with a conference attendance rate of 88.07%, which was more than 7 percentage points lower than the conference attendance rate of 95.08% last year. Especially last November, the IPO meeting rate even dropped to 81.58%, the lowest in last year. If the 141 cancellation enterprises in last year are included, the actual meeting rate of the whole year may be reduced again.
However, in January this year, the IPO passing rate seemed to pick up. As of the end of January this year, 36 projects were under review and 33 projects passed the meeting, with a passing rate of 91.67%, an increase of 5.18 percentage points compared with December last year.
From the audit of each sector, according to the statistics of Mr. Yi, there were 204 audit projects of Shanghai Stock Exchange last year, and 185 meeting projects of Shanghai Stock Exchange main board and science and innovation board. The meeting passing rates of the two sectors were 86.54% and 92.11% respectively; There are 237 projects reviewed by the Shenzhen Stock Exchange, and 222 projects passed through the Shenzhen main board and gem. The passing rates of the two sectors are 81.25% and 95.61% respectively. Compared with the Shanghai Stock Exchange, the average passing rate of the Shenzhen stock exchange is higher. In addition, there were 37 projects reviewed by the Beijing stock exchange and 36 projects passed the meeting, with a passing rate of 97.3%.
judging from the IPO meetings of various sponsors, 39 sponsors such as Minsheng securities, Anxin securities, China Merchants Securities Co.Ltd(600999) , Guoyuan Securities Company Limited(000728) , Everbright Securities Company Limited(601788) maintained a good record of “zero mistakes” last year.
The IPO passing rate of 24 securities companies last year was less than 100%, including several head institutions, such as Citic Securities Company Limited(600030) passing rate of 98.41%, China Securities Co.Ltd(601066) passing rate of 95.56%, China International Capital Corporation Limited(601995) passing rate of 92.86%.
In addition, according to the statistics of director Yi, 29 companies failed to pass the audit in 2021, and the annual rejection rate was 6.4%, an increase of about 5 percentage points over last year.
From the sponsors of these rejected projects, the projects sponsored by small and medium-sized securities companies have a higher rate of rejection. Among them, Hongxin securities only applied for one IPO project in 2021, and the rejection rate was 100%; The rejection rate of Hualong securities and Wanhe securities is 50%.
In addition, among the head sponsors whose projects have been rejected, Galaxy Securities has a rejection rate of 25%, the rejection rate of Gf Securities Co.Ltd(000776) is 11.11%, and the head sponsors whose rejection rate exceeds 5% include Guotai Junan Securities Co.Ltd(601211) , Huatai united, Guosen Securities Co.Ltd(002736) .
focus 4: the number of terminated IPOs in the year exceeded that of last year by 30%
From the IPO acceptance as of January 28, there are 7 new IPO applications accepted this year, including 4 on the science and innovation board, 2 on the gem and 1 on the Beijing stock exchange.
Some investment bankers believe that since this year, the A-share IPO market has shown several obvious characteristics. The first feature is that the registration time of IPO enterprises is shortened. For example, it took only 22 days for the technology innovation board enterprise Hawthorne Huatong to get the approval, which is the fastest one to get the approval. Another 19 enterprises completed the process from submitting registration to obtaining approval in less than 2 months.
Another feature is the significant increase in the number of enterprises terminated in the registration stage. In 2021, the number of enterprises terminated IPOs was only 16, while in only one month this year, the number of terminated IPOs has reached 22, more than 30% of that of last year, including 12 from science and Innovation Board enterprises and 10 from gem.
According to the analysis of the investment bank, for enterprises on the science and innovation board, the science and innovation attribute and the positioning of the science and innovation board are the main reasons for the termination of the board. In particular, the authenticity of R & D expenses, the source and accuracy of R & D patents, whether the going concern data continue to meet the requirements, and whether the revenue is based on core technology are the most concentrated questions.
Compared with the reasons for the termination of registration on the science and innovation board, the reasons for the termination of registration on the gem are more diverse, but the actual controllers or important shareholders, performance and policies are more focused.
In addition, the more prominent feature is that the phenomenon of intensive cancellation of many enterprises selected for on-site inspection is more obvious.
On January 7, the CSRC carried out the first batch of on-site inspections in 2022. Among the 187 enterprises accepted before December 31, 2021, 9 enterprises were spot checked, including 4 from the gem, 3 from the science and innovation board and 2 from the main board. Some investment bankers said that the nine companies selected were basically companies with small volume of revenue and net profit on the popular track.
It is particularly noteworthy that up to now, four of the selected enterprises have terminated their IPOs due to withdrawal. Among them, three are enterprises to apply for listing on the gem, including Zhongheng pet, Yiwu technology and Wuhan blue power, and another huimang micro is from the science and innovation board. The aforementioned investment bankers said that the reasons for the cancellation of these four enterprises basically come from the problems of poor performance, such as small income scale, large performance fluctuation and so on.
focus 5: under the registration system, the practice quality is tested
Compared with previous years, the higher number of cancellations is due to the fact that the CSRC has strengthened the on-site inspection of companies to be listed; On the other hand, it is related to the relevant responsibilities of the CSRC to strengthen the practice quality of intermediaries under the registration system.
2021 is the year of the reform of the comprehensive registration system, and the supporting policy environment of the capital market is also very favorable to us. In 2022, the registration system is expected to be fully implemented under the promulgation of the heavy documents of the CSRC.
On January 28, the CSRC formulated the legislative work plan for 2022 and made an overall plan for the legislative work of the whole year. According to the deployment, the relevant regulations on the implementation of the comprehensive registration system, which is most concerned by the market, will be issued in 2022, including the formulation of the administrative measures for the registration of initial public offerings and the administrative measures for the registration of securities issuance of listed companies.
On January 17, at the 2022 system work conference held by the CSRC, it was stressed that the capital market reform should be further promoted with the full implementation of the stock issuance registration system as the main line. Adhere to the “three principles” of the registration system reform, further improve the registration system arrangement with information disclosure as the core, highlight the top priority of the main board reform, accelerate the transformation of issuance supervision, further compact the “gatekeeper” responsibility of intermediaries, enhance the joint efforts of all parties, promote the formation of a good market ecology conducive to the full implementation of the registration system, and ensure the smooth implementation of the reform.
Haitong Securities Company Limited(600837) said that the registration setting price is formed by the full game of market participants such as issuers, lead underwriters and investors. The comprehensive registration system puts forward higher requirements for the valuation and pricing ability of investment banks and the ability to choose the issuance time window. After the full implementation of the registration system, the types of issuers and investors are more diverse, the needs are more diverse, the legal and regulatory system is more complete and stricter, and the practice risk of investment banks is increased.
