(Yicai Global) Nov. 15 -- The Issuance Examination Committee of China Securities Regulatory Commission (CSRC) reviewed the initial public offering (IPO) applications of six companies yesterday, of which it approved four, denied one and deferred one for a 66.67 percent approval rate, rather more forbearing than the 33 percent recorded one week earlier, when it gave the thumbs down to nine of 14 IPO bids.

The six companies include, inter alia, Bank of Chengdu Ltd., Zhejiang Fortune Energy Co., Chongqing Baiya Sanitary Products Co. and Chongqing Changjiang River Moulding Material Group Co.

Zhejiang Fortune Energy and Chongqing Changjiang River Moulding Material Group are both New Third Board-listed companies that are transferring their listings to the Main Board market. However, Zhejiang Fortune Energy was the only company that was denied due to related party transactions, over-reliance on government subsidies, suspicion of equity transfer pricing and risk in the operating performance of fund-raising projects. The application of Chongqing Baiya was suspended, and the applications of the other four have been approved.

Bank of Chengdu's IPO application finally got the nod after six years. An extraordinary general meeting of the firm reviewed and adopted its IPO-related proposals in June 2011.

The declining business performance of Bank of Chengdu riveted the Committee's attention notwithstanding its approval. Its net profits -- after deducting non-recurring gains and losses of Bank of Chengdu in 2014, 2015 and 2016 -- were CNY3.548 billion (USD532.2 million), CNY2.816 billion and CNY2.577 billion, respectively, public information shows. The Issuance Examination Committee grilled the firm on whether this would have a materially adverse impact on its future operations and performance.

Further, the non-performing loan (NPL) ratio of the Bank of Chengdu is higher than the industry average and its provision coverage ratio is close to the industrial regulation limit.

The Committee also made the Bank of Chengdu explain whether material deficiencies exist in its risk management and internal control systems, whether the asset impairment and related impairment provisions are properly made in each period, and whether asset swaps occur in its trust and securities companies to reduce its non-performing asset ratio.