IPO Conceal The Adverse Information When Crossing The Border, Before The Extension Of Biotech Was "Yellow Card" Warning.

In July 3rd, nearly two months later, the Beijing biotech Hengtong biotechnology Limited by Share Ltd (hereinafter referred to as "IPO") finally obtained the approval of the issue.

But on the eve of its approval, it was issued a warning letter by the SFC in July 1st for concealing key information in the process of IPO. This is also a rare IPO enterprise with "penalty" issued in recent years.

Its sponsor broker Credit Suisse Founder Securities was fined together. Credit Suisse founder has just become a foreign capital holding broker, and its only one single successful IPO project in the past two years is its branch.

Receive warning letters after the meeting.

Just two days before receiving the IPO approval, the company was issued a warning letter by the SFC.

In July 1, 2020, the official website of the SFC disclosed the decision on the adoption of warning letters and regulatory measures for the Beijing biotech Hengtong biotechnology Limited by Share Ltd. The securities and Futures Commission found that the sales of the products sold to the Mengniu Dairy Industry in December 2019 agreed that the main products sold to Mengniu Dairy industry were reduced from 3% to 6% in 2020. However, in the documents submitted before the trial conference, the change in the price range from 3% to 6% and its impact on the company's continuing operation were not disclosed. The link between the answer and the pricing mechanism of Mengniu Dairy transaction has not been explained.

In accordance with the provisions of the fifty-fourth regulation on IPO and listing on GEM, the CSRC shall adopt administrative supervision measures to warn people of cautionary organisms.

It is a high-tech enterprise mainly engaged in research and development, production and marketing of food additives, edible probiotics products, and animal and plant microecological preparations. It was established in 2003. It was accepted in October 22, 2018 to declare IPO material of gem, and the pre disclosure was more new in March 26, 2020.

It is worth noting that the biotech market is heavily dependent on major customers, especially Mengniu Dairy. The top five customers account for more than 85% of their revenues before the reporting period, and 70% of their revenues depend on Mengniu.

Prospectus shows that from 2017 to 2019, the company's revenue from the dairy industry was 249 million yuan, 271 million yuan and 263 million yuan respectively, accounting for 87.88%, 85.13% and 85.30% of the current operating revenue respectively. The income from the former five largest clients was 264 million yuan, 280 million yuan and 267 million yuan respectively, accounting for the current operating income respectively. 92.88%, 88.15% and 86.80%; the sales revenue of the first largest customer Mengniu Dairy was 232 million yuan, 242 million yuan and 235 million yuan respectively, accounting for 81.9%, 76%, 76.18% of the main business income of the current period.

Revenue is highly dependent on Mengniu Dairy. Meanwhile, accounts receivable of the dairy industry of the company are also rising. The receivables for Mengniu Dairy Industry from 2017 to 2019 were 75 million 482 thousand and 200 yuan, 84 million 959 thousand and 400 yuan and 78 million 862 thousand and 300 yuan respectively, accounting for 32.54%, 35.11%, 33.56% of the annual sales of Mengniu Dairy industry respectively.

Another point that the market is concerned about is that the chairman of the company is part-time, which is extremely rare in the A share market.

The prospectus shows that Sun Tiansong, the actual controller and controlling shareholder of the company, is directly holding 40.32% of the company's shares. He is a tutor and professor of Ph.D. graduate of the school of food science and engineering, Inner Mongolia Agricultural University. He is also chairman and chief scientist of the company (the direction of compound food additives).

In this regard, in May 14th, the Commission also gave reasons and reasonableness for Sun Tiansong not to choose to quit or start a business or stay at a job. Whether sun Tian song and Zhang Heping's part-time entrepreneurship were in line with the relevant regulations, and whether Sun Tiansong worked out the distribution of work hours between Universities and issuers during his part-time entrepreneurship, did Sun Tiansong have enough time and energy to fulfill his duties as chairman and chief scientist of the company? Whether the performance of duty is in line with the requirements of listed companies' governance standards has been concerned.

Responsibility of compaction intermediaries

"I think the probability is that the materials provided by the company are not good enough, and the sponsors have not noticed. Neither side of the matter is too necessary to deliberately conceal. The problem of the price reduction is mainly due to the inaccuracy of information disclosure, and no substantive consequences such as fraud in performance. The warning letter issued by the regulatory authorities reflects the requirements for information disclosure, but this matter does not cause substantial obstacles to the project. " A large broker dealer in Southern China analyzed the twenty-first Century economic report.

Under the registration system reform, the importance of information disclosure is constantly emphasized. In order to fully disclose the information on the price reduction of Mengniu Dairy industry, the company and sponsor agencies received a warning letter. In July 1st, the SFC also issued a warning letter to its sponsor broker, Credit Suisse Founder Securities and Bao Dai Yuan Jianzhong and Han Weiguo.

Between 2010 and 2020, 11 companies listed on Credit Suisse were listed, and 8 successfully met. Biotech is the only IPO project that has been approved in nearly 2 years.

Credit Suisse founder has become a foreign capital holding broker. In June 15th, Credit Suisse was awarded the "business license" issued by the Beijing municipal market supervision bureau, whose registered capital was changed from 800 million yuan to 1 billion 89 million yuan. Credit Suisse completed the delivery of Credit Suisse founder in June 1st, and no longer included in the consolidated statements of Founder Securities. Since then Credit Suisse has successfully controlled its stake by 51% stake, while Founder Securities has held the remaining 49% stake.

In 2008, Credit Suisse was established in Beijing, specializing in investment banking. In 2016, it was granted a securities brokerage business license in Qianhai, Shenzhen. In February 24, 2016, its Shenzhen Qianhai securities business department was formally established, and is currently its only business department.

In 2019, Credit Suisse realized its revenue of 153 million yuan, down 15.13% compared to the same period last year, with a net loss of 41 million 830 thousand yuan. In the same period, the average revenue of the industry was 4 billion 590 million yuan, an increase of 40% over the same period, and the average net profit of the industry was 1 billion 172 million yuan.

Insiders pointed out that registration system reform emphasized information disclosure as the core, as a sponsor of capital market "gatekeeper" should also compacted its responsibilities and obligations.

The director of the relevant departments of the securities and Futures Commission answered the reporters' questions about the reform of the gem and the pilot registration system. In terms of compacting the agency's responsibilities, one is to perfect the duty requirements and to strengthen the duty of recommendation. Two, we should refine the division of responsibilities and enhance the efficiency of sponsorship. Three, we should intensify supervision and law enforcement and severely punish illegal activities.