The first case of CSIB’s rejection by the listing committee is in doubt about CSIB’s affiliated transaction.


Journalist | Manle Editor | 1
Following the decision of Heng’an Jiaxin not to be registered by the SFC, the first company rejected by the listing committee appeared in Kechuang board.
On the evening of September 5, the Shanghai Stock Exchange released the results of the 21st Review Conference of the Listing Committee of the Science Creative Board. It agreed to the initial public offering of Jeptec and disagreed with the initial public offering of Guoke Huanyu.
Although eight companies have applied for withdrawal of listing application after one or more rounds of inquiry before it was terminated, Guoke Huanyu is the first case to terminate the examination because of disagreement with the listing application.
According to the public information, Guoke Huanyu is a solution provider for key electronic systems in aerospace. It is the core supplier of key electronic systems for major scientific and technological projects in China, such as manned space flight, Beidou satellite navigation system and high resolution earth observation system. In the first six months of 2019, the company realized business income of 27.4114 million yuan. During the same period, its net profit changed from profit to loss, with a loss of 18.945 million yuan. The proportion of R&D investment in business income increased from 5.19 at the end of 2018 to 22.36%.
At present, the controlling shareholder of the company is Wuying Science and Technology, which is a state-owned shareholding management platform. The Space Application Center of the Chinese Academy of Sciences holds 51% of the company’s equity through Wuying Science and Technology, and is the actual controller of the company. China Securities and Thailand Securities are its sponsors.
At the deliberation meeting of the Shanghai Stock Exchange on September 5, the Shanghai Stock Exchange focused on three types of issues: national science, global science and technology.
First, the issuer’s ability to operate independently and continuously directly in the market.
One of the main business modes of issuers is major special undertaking research. This kind of business is based on the planning arrangement of relevant state departments. It is decomposed and issued by the related party of issuers (unit D, according to the exemption rules of information disclosure, issuer does not disclose its name). The research and development funds are passed through relevant departments and unit A (according to information disclosure). Exemption rules, the issuer did not disclose its name) step by step allocation, did not sign the relevant contract. The major revenue source of the issuer’s special research undertaking business comes from the allocation of funds, which accounts for 35.38%, 25.08% and 31.84% of the issuer’s revenue in the last three fiscal years, respectively.
Secondly, the standardization of the basic accounting work of issuers and the effectiveness of the internal control system.
The net profit disclosed by the issuer in March 2019 in the audited financial report of the parent company in 2018 was 27.864 million yuan, while the net profit in the financial report of the parent company in April 2019, which declared the company’s innovation board, was 17.9053 million yuan, the difference between the two was 9.9591 million yuan. The main reason for the above-mentioned net profit difference is that the issuer will refund the enterprise income tax and deferred income tax assets received in December 2018 for the previous year, which are to be recovered for losses, and adjust the profits and losses from one-time entry into 2018 to the corresponding accounting period for the reporting period. Among them, the issuer will increase the income tax expenses of 2018 by 35751,000 yuan and defer income tax assets. Income tax expenses amounted to 6.8136 million yuan, which affected the net profit of 2018 – 10.3887 million yuan. The inaccurate age division and cost division of issuer’s accounts receivable lead to the discrepancy of cost and expense of financial statements declared twice. There is only one month difference between the two declarations, and the audit report is issued by the same audit institution.
Third, the fairness of related party transactions.
The issuer’s business development relies heavily on the affiliated units A and D. In the past three accounting years, the affiliated sales amounts of unit A are 42.168 million yuan, 32.4898 million yuan and 60.5104 million yuan, accounting for 66.82%, 25.73% and 32.35% of sales revenue, respectively. The issuer fails to fully explain the fairness of the pricing of the related party transactions mentioned above. ,
In view of this, the listed Committee of SciDev Board considers that the proportion of related party transactions is relatively high, and the related party has a greater dependence on the development of business, which can not explain the fairness of the related party transaction price. The major special undertaking business model is not market-oriented, and the income source is from the allocation of funds. The issuer does not conform to the integrity of the business and has a direct side. The requirement of the ability to operate independently to the market.
At the same time, Guoke Huanyu failed to fully disclose the business model of major special research undertakings at the time of its first declaration, omitted the disclosure of related parties, and did not fully disclose the information necessary for investors to make value judgments and investment decisions on issuers. In March 2019, there are significant differences between the financial data listed on the Beijie Stock Exchange and the present declaration. There are significant adjustments in the financial data of the issuer in a short period of time. There are differences in the net profit of the parent company’s statement of 9.9591 million yuan, reflecting that the issuer has an imperfect internal control system and weak accounting foundation.
“The existing rules and procedures for the examination and verification of the issuance and listing of new board under the registration system, whether approval or disagreement, or termination of the examination and verification for reasons such as voluntary withdrawal, are normal phenomena in the examination and verification.” The Shanghai Stock Exchange said that it would continue to follow the direction of marketization and legalization, adhere to the orientation of scientific innovation board, adhere to information disclosure as the core, and implement the inclusive institutional arrangements in the issuance and listing of scientific innovation board.
At the same time, give full play to the role of open inquiry audit in improving the quality of issuers’information disclosure and intermediary agencies’ practice, and make a good market “entrance clearance”, which is the realistic requirement for the Shanghai Stock Exchange to fulfill its responsibilities of issuance and listing audit in accordance with the registration system.