(Yicai Global) Nov. 24 -- China's regulators are formulating measures to classify the performance decline of companies that have completed the application process for initial public offerings and are readying to issue shares. Specific requirements will be issued in the near future.
A company whose performance more than halves will not be given a follow-up audit, the implementation of which will depend on the circumstances after the financial data in the next reporting period is submitted. The rule was put forward during sponsor representative training yesterday, according to an article posted on 21st Century News Group's website.
For a company with a performance decline of more than 30 percent, but less than 50 percent, the issuer should submit a special performance analysis report, and the sponsor institution should submit a verification report. In addition, the issuer may provide a profit forecast report examined by the accountant. On this basis, the filing for an IPO or the issuance of shares can be arranged.
But, if the total forecast profit in the profit outlook report examined by the accountant drops more than 30 percent compared with the figures in the previous period, it shall be treated as a decline of over 50 percent and be dealt with after the follow-up financial data is submitted.
If the performance decline is less than 30 percent, the issuer should submit a special performance analysis report to analyze the reasons for the decline as well as a performance forecast report for the next reporting period. The sponsor institution should submit a verification report with a clear verification opinion. On this basis, the follow-up audit or issuance can be carried out.
In China, a company seeking to list must submit an IPO application to the Issuance Examination Committee of the China Securities Regulatory Commission. The application will be examined at a regular committee meeting. If the application is adopted, it can be called an approved IPO.
