Case Study Of IPO Failure Of Shanghai Haihe Pharmaceutical Co Ltd Innovation Board

In order to promote the development of China’s multi-level capital market and to fully implement the innovation development strategy,on 5 November 2018,General Secretary Xi Jinping publicly stated that a science and technology innovation board would be established on the SSE and a registration system would be implemented on a pilot basis.On 22 July of the following year,the first batch of a total of 25 high-tech enterprises were successfully listed and traded on the SSE’s Science and Technology Innovation Board,and China’s securities market entered a stage of reform and development from an approved system to a registration system.Before the introduction of the STB,the threshold for IPO in the Chinese capital market was too high and there was still a large gap between the operating conditions of most science and innovation enterprises and the IPO conditions.After the implementation of the STB,a registration-based review system was adopted,with low listing thresholds,flexible listing conditions and short listing review time,which was favoured by many science-based SMEs.However,it is worth noting that the IPO of the STB adopts a registration system with information disclosure as the core,which is different from the original IPO approval system in terms of system and strict information disclosure requirements for the proposed IPO companies,and the IPO failure rate of the companies listed on the SSE STB has been rising year by year in recent years.As at 31 December 2021,a total of 145 companies applying for listing on the STB have terminated their offerings due to failure to meet the regulatory disclosure requirements.This thesis takes Shanghai Haihe Pharmaceuticals Co.,Ltd.as the research object and investigates the reasons behind its IPO failure on the science and technology innovation board,which has certain practical significance and research value.In the early stage of the case study,this thesis firstly uses the literature review method to explore the current status of research on the registration system,IPO on the Science and Technology Venture Exchange and the reasons for IPO failure,so as to provide some theoretical support for the later thesis.The basic situation of the company,the motivation of the IPO,as well as the process and results of the listing are summarised and introduced.In the core part of the thesis,this thesis systematically analyses the causes of failure from four different perspectives,including the attributes of science and innovation,going concern capability,corporate governance and internal control,and information disclosure,and finds that in the attributes of science and innovation,Haihe has problems of strong technological dependence on core products,low attention to investment in R&D equipment and low competitiveness of R&D results;in the going concern capability,it has problems of expanding accumulated losses,financial status and high concentration of suppliers.There are problems of high risk of transfer of equity control,suspected transfer of interests in equity transfer and unbalanced internal control management mechanism in corporate governance and internal control;there are problems of inadequate and non-compliant information disclosure in information disclosure.Finally,based on the reasons of failure,this paper gives four levels of corresponding suggestions,hoping that the proposed IPO companies on the STB can: make up for the shortcomings of STB attributes,improve the independence of technology R&D,attach importance to R&D equipment investment and sound R&D personnel training mechanism;enhance sustainable operation capability,strengthen investment management and capital utilization management,optimize capital structure and establish budget management and broaden procurement channels;improve corporate operation mechanism The Company will sign shareholders’ agreement,strengthen the penetration management of shareholders’ qualification and standardize internal control management;and ensure the quality of information disclosure.As there are relatively few case studies of failed IPOs on the STB in China,it is hoped that this thesis can provide some reference value for the successful listing of companies to be listed on the STB.