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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.
C
ANOT apply the minimum profit requirement (Main Board Listing Rule, Article 8.05 (1) (a))
1. The applicant must hold a license to carry out its principal business. If the applicant do not has the license, the income of this part is non-compliant business income. If it does not calculate the income from non-compliance business, it will not meet the minimum profit requirement;
2. Parts of the operating expenses of the applicant come from the interest-free loan of the controlling shareholder. The interest-free loan is an abnormal commercial term. If the loan is calculated, it will not meet the minimum profit requirement.
3. The amount of non-compliance loans of some micro-finance company applicant is huge. If the non-compliance loan income is not calculated, it will not meet the minimum profit requirement.
