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2. The applicant has sufficient funds to prove that it needs to obtain financing through listing;
3. The use of fundraising funds is not commensurate with future business strategies.
Whether the applicant is sustainable after the listing is extremely uncertain
1. The applicant has a low profit margin and is constantly regressing. It may not be able to continue to operate after listing;
2. Certain loans and guarantees provided by some applicants, which are microfinance companies, do not comply with the local policies applicable to microfinance companies, and the applicant may face the cancellation of the business license;
3. The business of the applicant during the business record period has been banned by government policies. And the applicant plans to adjust its business model after the listing. The transformation of business model and/or product portfolio will greatly affect business model, cost structure, profitability and risk assessment of the applicant, but the applicant failed to prove that the new business is sustainable.
4. The applicant outsourced the business of the products it sold during the business record period, and then it intends to shift its business focus to producing and selling another new product after the listing. The new business is fundamentally different from the existing business of the applicant. The management has no experience in operating new business and the applicant has failed to demonstrate the sustainability of the new business.
5. The applicant maintains a positive cash balance only from bank financing;
6. The applicant's gearing ratio and net current liabilities were high;
7. The market share of the applicant brand was low and there was a downward trend;
8. After the manufacturer terminated the supply of a major product, the financial statements of the applicant showed a retrogression.
9. In order to improve its business, the applicants plan to shift their business focus to the second brand after the business record period, but the brand has a lower market share;
10. During the business record period, the applicants failed to address the impact of rising operating costs and the financial performance was reversed. Although the applicants implemented the throttling measures in the last year of the business record period, the trend of the applicants' business retreat could not be stopped. At the same time, the management failed to prove that it was able to reverse the performance of the applicants after the business record period.
Cannot apply the “continuity of ownership and control throughout the full financial year” ( GEM Listing Rules, Article 11.12(2))
1. In the recent financial year, some of the controlling shareholders withdrew and the sponsor failed to prove that the former controlling shareholder was a passive shareholder during the relevant business record period;
2. During the period from the recent financial year to the pre-IPO, there was a significant change in the voting rights of some controlling shareholders;
3. One of the controlling shareholders is no longer a controlling shareholder after the most recent financial year, and the sponsor has failed to prove that the change has little effect on management. It is not possible for investors to assess how the applicant manages the business only under the influence of the remaining controlling shareholders based on the previous financial performance of the applicant.
