A Case Study On The IPO Failure Of G Company

In early 2019,the China Securities Regulatory Commission announced the Measures for Continuing Supervision of Listed Companies on the Sci-Tech board,the Measures for the Administration of Registration of IPO of Shares on the Sci-Tech board and Implementation Opinions on the Establishment of the Sci-Tech board and Pilot Registration System on the Shanghai Stock Exchange.It means that China’s securities market has begun to start with the establishment of Sci-Tech board,steadily pilot the registration system,and gradually explore the securities issuance registration system that meets China’s national conditions.In June2019,the opening ceremony of the Sci-Tech board was jointly organized by the China Securities Regulatory Commission and the Shanghai Government at the opening ceremony of the 11 th Lujiazui Forum.The official opening of the Sci-Tech board marked the implementation of the major reform task of the Party Central Committee and the State Council on the establishment of the Sci-Tech board and the pilot registration system on the ground.Since the official opening of the Sci-Tech board on June 13,2019,as of December 31,2022,a total of 632 enterprises have applied to participate in the IPO audit of the board,of which a total of 13 enterprises have been rejected.Although the passing rate is high,from the reasons of rejection,it is still common for enterprises to encounter problems such as insufficient sustainable operation capability and deficiencies in internal control,which are issues that determine the These problems are the key to the success or failure of IPO.Among them,the China Securities Regulatory Commission focuses on financial issues when reviewing enterprises applying for IPO on the Sci-Tech board,and enterprises that have problems in this regard have failed in the IPO process of the Sci-Tech board,so both enterprises and investors should pay more attention to financial aspects,so as to improve the approval rate of IPO on the Sci-Tech board.Therefore,this paper uses the case study method and literature research method to select the IPO failure case of Company G for research.The paper elaborates the specific situation of Company G,including the motivation,process and results of its IPO.By compiling 69 questions asked by the the China Securities Regulatory Commission in the examination of Company G,the paper studies the reasons for the failure of Company G’s IPO on the Sci-Tech board and proposes corresponding improvement suggestions for Company G.The paper draws the following conclusions: the reasons for the failure of Company G’s IPO on the Sci-Tech board include the following two aspects.First,Company G’s ability to continue operating is insufficient,mainly in terms of declining profitability,low cash flow performance,and irregular working capital management.To address this issue,this paper recommends that Company G improve its profitability model,strengthen cash management,and improve its working capital management system;secondly,Company G’s internal control is deficient,which is mainly manifested in frequent illegal matters,insufficient information disclosure and imperfect staff structure.Among them,frequent violations of law and inadequate employee structure will further affect the stability of Company G’s ability to continue operating.Therefore,this paper recommends that Company G should strengthen internal management,improve information disclosure and optimize the staff structure.