Author: Chen Lina

Author Chen Lina

Editor Sun Mulin

Editor's note: the reform of the registration system is a "bull nose" project of capital market reform, a change that touches the underlying logic of supervision, an inward change, and a change that affects the overall situation of the capital market. we will effectively speed up the construction of a modern capital market with Chinese characteristics, effectively improve the socialist market economic system, and greatly enhance the ability and level of the capital market to serve the high-quality development of the real economy.

From the establishment of the board and the pilot registration system, to the reform of the GEM and the pilot registration system, to the pilot registration system of the North Stock Exchange, to the full implementation of the reform of the stock issuance registration system, more than four years, the-share registration system from the "test field" to the "whole market", to open a new journey of high-quality development of the capital market.

In the first half of this year, A- shares ushered in the first "half-year test" of the landing of the full registration system ". The registration system does not mean relaxing quality requirements. In the first half of the year, a total of 203 A- share companies attended the meeting, and the IPO meeting rate was 84.54 per cent, slightly lower than 86.69 per cent in the same period last year, of which 10 companies would be rejected and 16 were suspended.

under the background that the regulatory authorities insist on "improving the quality of listed companies and strictly controlling the entrance of IPO", how to make IPO enterprises "work"? What are the changes in the latest IPO audit standards for each sector? What are the problems of the 10 companies that will be rejected in the first half of this year? What are the reasons for the suspension of consideration of the other 16 enterprises? One enterprise case, the Times Business School through one by one analysis, in order to interpret the deep-seated reasons behind the obstruction of the enterprise IPO.

On April 18, 2023, Hurun Research Institute released the "2023 Global Unicorn List", which listed the unlisted companies with a value of more than US $1 billion since 2000, including Spitzer Technology Co., Ltd. (hereinafter referred to as "Spitzer"). After the ChatGPT fire, there was an upsurge in the AI field. Riding on the east wind of the industry, Spitzer was once regarded by the market as "the second Cambrian of A shares (688256.SH)". However, Sibichi eventually "defeated" the science and technology innovation board, becoming the second A- share company to be rejected in the first half of this year.

the prospectus shows that spitz is a professional provider of man-machine dialogue solutions in China. it has independently developed key technologies for full-link intelligent voice and natural language interaction. it is laid out around "cloud + core" and provides artificial intelligence technology and product services combining software and hardware for the internet of things fields such as intelligent household appliances, intelligent automobiles, consumer electronics and digital government and enterprise fields. it belongs to the currently popular AI intelligent voice language industry.

on July 15, 2022, sibichi's application for a sci-tech board IPO was accepted and it plans to raise 1.03 billion yuan. on may 11 this year, the company will be rejected. During the audit process, the Shanghai Municipal Committee focused on the sustainable management capability and core technical strength of Sibi Chi.

Three consecutive years of losses, the reasonableness of the turnaround estimate is questioned

the decision on terminating the initial public offering of shares of sibichi Technology Co., Ltd. and listing on the science and technology innovation board (hereinafter referred to as the "audit decision") issued by the Shanghai Stock Exchange shows that the key points of the on-site inquiry at the municipal Party committee meeting include, combined with the industry competition pattern and the operation of leading enterprises in the past three years, Further explain the rationality and prudence of sibichi's forecast of the compound growth rate of operating income in the next four years; and the sustainability of Spitzer's operating capacity, taking into account continued losses and significant declines in net assets during the reporting period (2021-2022).

according to the prospectus, during the reporting period, sibitz's operating income was 0.237 billion yuan, 0.307 billion yuan and 0.423 billion yuan respectively, and its net profit was -0.18 billion yuan, -0.298 billion yuan and -0.264 billion yuan respectively, with losses for three consecutive years. Entering 2023, Spitzer achieved revenue of 94.1974 million yuan in the first quarter, up 61.42 percent year-on-year; net profit attributable to the parent company was -69.0965 million yuan, still not profitable.

As of December 31, 2022, the undistributed profit of the consolidated caliber of Spitzer was -0.673 billion yuan, with a large uncompensated loss. During the reporting period, the net cash flow from operating activities of Spitzer was -0.211 billion yuan, -0.263 billion yuan and -0.26 billion yuan, respectively. The net cash flow from operating activities of the company continued to flow out, and the scale gradually expanded. At the end of March 2023, Spitzer's net worth was only $76.7065 million.

It is worth noting that as the company continues to lose money, the owner's equity attributable to the parent company has also fallen sharply. At the end of each period from 2020 to 2022, the total equity attributable to the owner of the parent company was 0.658 billion yuan, 0.353 billion yuan and 0.147 billion yuan, respectively. By the end of March 2023, the value was only $0.093 billion, down 36.36 percent from the end of 2022, which Spitzer said was mainly due to the company's unprofitable and uncompensated losses expanding.

Spitzer's IPO is a rare company that has experienced three rounds of inquiries, in each round of inquiries, the SSE asked Spitzer to forecast future performance. In the first round of inquiry letters, the Shanghai Stock Exchange questioned Spitzer's "sustainable operation ability" and asked Spitzer to explain whether it has the basic conditions and operating environment to turn losses into profits. Combined with the future research and development investment and equity incentive demand, the downward trend of comprehensive gross profit margin and the change trend of expense rate during the period, it explained the calculation basis and rationality of turning losses into profits, and carefully demonstrated whether it is objective and feasible.

in the second round of inquiries, the SSE asked sibitz to explain whether the forecasted annual operating income and compound growth rate are reasonable and prudent, and whether there is a basis for realization.

in the third round of inquiries, the Shanghai stock exchange once again asked sibichi to explain whether the relevant revenue growth forecast is reasonable and prudent, the calculation basis and rationality of turning losses into profits, and whether the prudent demonstration is objective and feasible.

From the three rounds of inquiries, the SSE has great doubts about the future profitability of Spitzer, and all three rounds of inquiries require Spitzer to prove whether the measured revenue growth is objective and reasonable.

According to the prospectus, the AI intelligent voice language industry in which Spitzer is located is a typical technology-intensive industry that requires a large amount of capital investment in research and development. The high investment in research and development is one of the main reasons why Spitzer lost as much as -0.673 billion yuan. In each of the reporting periods, Spitzer invested $0.198 billion, $0.204 billion and $0.287 billion in research and development, accounting for 173 percent, 86 percent and 93 percent of current revenue, respectively.

At the same time, according to the prospectus, the period expenses of Spitzer during the reporting period were 0.374 billion yuan, 0.41 billion yuan and 0.571 billion yuan respectively, accounting for 326 per cent, 173 per cent and 186 per cent of operating income respectively. In the prospectus, Spitzer said that if the company's period expenses are not properly controlled in the future and the rate of decline in period expenses slows down, the year when the company turns losses into profits will be delayed.

on November 10, 2022, the reply document of the first round of inquiry letter released by sibitz showed that it predicted a loss of 0.2 billion yuan and a revenue of 0.452 billion yuan in 2022; it is estimated that the time point for turning losses into profits is 2025, and the realized revenue is 2 billion ~ 2.1 billion yuan.

however, according to the reply document of the second round of inquiry letter released on March 21, 2023, spitz expects the operating income in 2022-2026 to be 0.452 billion yuan, 0.725 billion yuan, 1.15 billion yuan, 1.69 billion yuan and 2.451 billion yuan respectively, with a compound growth rate of 51.46 in 2021-2026, of which the year-on-year growth rate of operating income in 2023 is expected to reach 60.56. Based on the calculation, the expected time node for the turnaround of Spitzer is changed to 2026.

according to the latest prospectus of spitz (released on April 28, 2023), spitz's operating income in 2022 is 0.423 billion yuan, 29 million yuan less than previously predicted. The actual loss in 2022 is 0.297 billion yuan, thanks to its forecast of 97 million yuan.

The Audit Decision shows that the audit focused on the reasonableness and prudence of the relevant forecasts of Spitzer, as well as its continued losses and significant decline in net assets during the reporting period. The Listing Review Committee considered that Spitzer failed to fully explain the reasonableness of the forecast of the compound growth rate of operating income in the next four years, failed to fully reveal the risk of negative net assets before listing, and the relevant information disclosure did not comply with the ''Initial Public Offering of Shares Registration The relevant provisions of Article 34 of the Administrative Measures.

A number of patents were obtained externally, and large customers became competitors

In the technology-intensive industry of AI intelligent speech language, the advancement of core technology is the key factor for enterprises to stay ahead.

in addition to operational sustainability, the upper municipal party Committee has also focused on the market competition pattern of sibichi's core business, the differentiated competition layout of core products, the embodiment of scientific and technological innovation of core technologies, the upgrading iteration cycle and research and development reserves of core technologies and major products, the hard scientific and technological attributes of sibichi's core technologies, and the effectiveness of differentiated competition.

According to the second round of enquiry letters, there are IP licenses and software purchased externally by Sibichi. During the reporting period, Sibichi externally purchased 10 IP licenses and software with an original value of more than 1 million yuan, which were mainly used for the development of TH series chips and the auxiliary operation and service of intelligent outbound technical service business.

According to the prospectus, at the chip level, the product developed by Sibichi is the AI voice chip, which is an important carrier for the realization of Sibichi's "artificial intelligence algorithm definition chip" technology strategy. AI voice chips are mainly divided into TH series chips and other series chips. The importance of TH series chips to Sibichi is self-evident. However, Sibichi TH series chips are developed in cooperation with Shanghai Jiaotong University (hereinafter referred to as "Shanghai Jiaotong University").

in the second round of inquiry letter, the Shanghai stock exchange requested to explain whether spitzer's technology is independent and whether spitzer has independent research and development capabilities in combination with spitzer's cooperative research and development with Shanghai jiaotong university, spitzer's IP authorization, software procurement, outsourcing development and entrusted processing.

According to the reply document of the second round of inquiry letter, according to the cooperation agreement signed in August 2021, according to the needs of the market and enterprise development, the research and development of some core key technologies or products will be entrusted to Shanghai Jiaotong University in the form of specific projects through joint laboratories.

In addition, at the end of 2020, SPITCH also acquired the intellectual property shared with Shanghai Jiaotong University. According to the first round of inquiry letters, in July 2020, SPITCHI signed an agreement with Shanghai Jiaotong University and other related parties to transfer the patent rights unique to Shanghai Jiaotong University and the share of patents shared by SPITCHI and Shanghai Jiaotong University to Shanghai Jiaotong University Intellectual Property Management Co. In September 2020, Shanghai Jiaotong University Intellectual Property Management Co., Ltd. transferred another 68 patent rights and patent application rights to Sibichi.

In this regard, the Shanghai Stock Exchange asked Sibichi to explain the relationship between the patent rights and patent application rights transferred by Shanghai Jiaotong University Intellectual Property Management Co., Ltd. to Sibichi and Sibichi's core technology, and the independence of Sibichi's core technology.

As for the market competition pattern of the core business and the differentiated competition layout of the core products that the Shanghai Municipal Party Committee is concerned about, there are also areas that are difficult to justify.

In 2019, Zhejiang Tmall Technology Co., Ltd. ("Zhejiang Tmall") was the number one customer of Sibichi, and in the same year, Alibaba Cloud Computing Co., Ltd. ("Alibaba Cloud") was the number one supplier of Sibichi. 2In 020, Alibaba Cloud reduced its holdings of Sibichi. In the same year, Zhejiang Tmall also withdrew from Sibichi's top five customer list.

spitz said: "from 2020 to 2021, sales revenue to Zhejiang Tmall decreased, mainly because ariyun began to promote its own intelligent voice semantic products, so the purchase amount from ariyun also decreased." It can be seen that Zhejiang Tmall was once the largest customer of Sibichi. Now Sibichi needs to compete with it. Facing the strong background of "Ali Department", Sibichi's market competition will become more difficult.

In terms of the differentiated competitive layout of core products and the effectiveness of differentiated competition, Sip said in the prospectus that in the field of intelligent voice language, major domestic enterprises include HKUST Xunfei and Yunzhisheng in addition to Sip. According to IDC's report, in 2021, hkust xunfei (002230.SZ) will have a market share of 11%, Alibaba (BABA.N) will have a market share of 7%, and Baidu (BID U.O) will have a market share of 6%. the above are the top three enterprises in the industry. internet giants such as Alibaba and Baidu will have a large market share by virtue of their user traffic advantages and popularity. In 2021, the market share of Sibi is only 3%.

in addition, the first round of inquiry letters show that hkust xunfei and sibi chi have all made a layout in the fields of finance, education, medical treatment, government affairs, home and car, and comparable companies such as cambrian, hongsoft technology (688088.SH), yuncong technology (688327.SH), yuntianlifei (688343.SH) and sibi chi have overlapping businesses.

as shown in chart 2, the main industry structure disclosed by spitz and comparable companies shows that spitz is mainly in the fields of intelligent speech recognition, natural language processing and artificial intelligence chips, while xunfei of HKUST is also in the fields of intelligent speech recognition, natural language processing and artificial intelligence chips, and the main industry structures of the two completely overlap.

It is worth noting that Spitzer and HKUST Xunfei are both in the intelligent voice language track. After more than 10 years of accumulation, HKUST Xunfei has obvious advantages in the stock market and is in a leading position in terms of revenue scale. In the future, if leading enterprises such as the University of Science and Technology continue to expand their market share by virtue of their leading advantages, the market competition of Spitzer may be more unfavorable. In the meeting, Sibi Chi's reply failed to satisfy the Shanghai Municipal Committee and eventually regretted losing.

Overall, Spitzer is in one of the hottest tracks of the day, and AI intelligence has huge market potential, but even so, Spitzer has not been able to successfully land on the board. The fact that the Sibichi IPO application was not applied also reflects from the side that the Shanghai Municipal Committee is cautious about the field of artificial intelligence.

In the first half of this year, in addition to Sibichi, another company on the board was rejected, Zhejiang Taimei Medical Technology Co., Ltd. (referred to as "Taimei Technology"), Taimei Technology belongs to the information transmission, software and information technology services industry. During the review session, the Shanghai Municipal Committee also asked Taimei Technology whether its business model is stable, whether its profit forecast is achievable, and whether its forward-looking information disclosure is prudent and objective.

Times Business School believes that in addition to the attributes of science and technology, the board is paying more and more attention to the profitability of IPO enterprises, and will also focus on the business sustainability and liquidity of its business model.