(Yicai) Aug. 8 -- HKC Optoelectronics Technology has withdrawn its filing to go public on the Shenzhen Stock Exchange’s Nasdaq-style ChiNext board, which was touted to be the biggest this year at up to CNY9.5 billion (USD1.3 billion), as a slump in business means the Chinese maker of large-sized liquid crystal display panels could not meet the necessary requirements.

The status of HKC’s IPO application, which was filed in June last year, has been changed to ‘terminated’ on the Shenzhen bourse’s website.

HKC is one of China’s four biggest large-size LCD panel manufacturers but the sector has been experiencing a downturn since early last year, when global demand suddenly weakened and prices dropped dramatically.

As a result, HKC is expecting to rack up losses of between CNY1 billion (USD138.6 million) to CNY1.2 billion in 2022.

But, according to the ChiNext listing criteria, HKC is required to log a profit in the latest financial year, achieve annual revenue of not less than CNY100 million and have a predicted market valuation of not less than CNY1 billion (USD138.6 million).

The firm's declining business performance, a high liability-to-asset ratio and low capacity utilization are most likely the reasons behind its decision to pull the IPO.

Times have changed. HKC was the world’s third biggest supplier of LCD television screens in 2021 and the sixth largest maker of desktop monitor displays, according to data from market research and consulting firm Sigmaintell.

The firm grew rapidly between 2019 and 2021, and its net profit surged to CNY5.4 billion (USD750 million) a year from losses of CNY1.3 billion. Revenue more than tripled to CNY35.7 billion (USD5 billion) over the period.

Sixty-seven companies have withdrawn their applications to go public on the ChiNext board so far this year, 61 of which were self-initiated. And 126 IPO filing have been pulled altogether on the Shanghai and Shenzhen bourses. Most of them cited poor business performance and uncertainty as to whether their fundraising plans were feasible.

Editor: Kim Taylor