Tighter profit rules dim hopes of China IPO candidates
Hundreds of listing applicants may have to scrap their share offering plans after the regulator orders underwriters to do an earnings review
Renewed measures by mainland regulators to ease fund-raising pressure on the stock market are expected to force hundreds of initial public offerings to be called off if they fail to meet more stringent listing requirements.
As of February 7, 39 listing applicants had voluntarily withdrawn their plans, just a month after the China Securities Regulatory Commission ordered underwriters and auditors to re-examine the 2012 earnings of prospective listing candidates.
The regulator asked the underwriters to file reports of their re-examinations before March 31.
Investment bankers said more than 100 applicants could terminate their share-sale plans in the coming months as a result and seek alternative fund-raising opportunities.
The latest move by the regulator follows its suspension of all listing approvals in October last year, pending in-depth checks ordered on the nearly 900 applicants by all underwriters and auditors. No share offerings have been approved since then.
The moves are seen as an attempt to solve the so-called "quake lake" of listing applications that has been accumulating on the market, where at the last count 873 companies had lined up to launch share offerings.
It will be a waste of time for those companies if they stick to their IPO plans ... The in-depth checks were originally designed to expel a large number of listing applicants