Two Chinese state-owned firms drop IPO plans amid crackdown
SHANGHAI, June 3
SHANGHAI, June 3 (Reuters) - China National Building Material Co Ltd (CNBM) and Bank of Dalian have ditched their plans to list shares domestically, highlighting the impact of Beijing's suspension of initial public offerings.
The number of IPO applicants in China has fallen to 666 from more than 800 last November, when the China Securities Regulatory Commission (CSRC) froze the IPO market and started inspecting applicants' books for evidence of fraud, according to latest data posted on its website.
So far, most of the companies that have voluntarily dropped their IPO plans because of poor accounting quality or a slump in their businesses which has disqualified them from listing have been privately-owned.
Among the 16 Chinese banks which have applied for domestic listings, Bank of Dalian is the first to pull out.
The CSRC document did not say why Bank of Dalian and CNBM, the country's biggest cement maker, have withdrawn their IPO applications. Officials at neither company could be reached for comment.
Under current regulations, a company must post three consecutive years of profit to be eligible to list on the Shanghai or Shenzhen stock exchanges. The CSRC may also bar companies whose profit growth has slowed sharply.
Bank of Dalian's net profit grew only 1.6 percent last year, despite a 18 percent rise in revenue, as a rise in non-performing assets ate into earnings. The growth rate far lags the industry average of more than 20 percent.
CNBM's 2012 profit dropped more than 30 percent as it suffered from an oversupply of building materials.
The company had said previously that it aimed to raise about 10 billion yuan ($1.63 billion) via selling shares in Shanghai, having hired China International Capital Corp and Morgan Stanley's China venture as underwriters.
The securities watchdog has not said when it would resume approving IPOs, though media reports have said it is likely to be this month or in July.
Separately, the latest CSRC document showed mid-sized brokerage Guotai Junan Securities has applied for an IPO on the Shanghai Stock Exchange.
- Exclusive: Malaysia plane probe narrows on mid-air disintegration - source
- Radar showed missing plane may have turned back: Malaysia military
- Missing Malaysian jet may have disintegrated in mid-air: source |
- Malaysian plane presumed crashed; questions over false IDs |
- Merkel raps Putin as Russian forces tighten grip on Crimea |