On the evening of October 16, the Shanghai Stock Exchange (SSE) website was updated to reflect that Guangzhou Sanjing Electric Co., Ltd. (hereinafter referred to as Sanjing Shares) and its lead underwriter, Minsheng Securities, withdrew their application for an initial public offering (IPO). In accordance with relevant regulations, the SSE decided to terminate the company's IPO and the registration process for listing on the main board.

Sanjing Shares' application for listing was accepted in March 2023 and was approved by the SSE's listing committee in September of the same year. The registration was submitted at the end of December, but no results were forthcoming until, after more than nine months, the company and its sponsor proactively withdrew the application.

Sanjing Shares' main products are photovoltaic grid-tied inverters, energy storage inverters, and others. From 2020 to 2022, the company's revenue and net profit grew rapidly, but there was a sudden change in the third quarter of 2023, with the company's revenue being halved year-on-year, and the net profit even showing a loss.

Sanjing Shares was once listed on the New Third Board in 2016 but announced its delisting after only two years.

The performance suddenly plummeted.

According to the prospectus, Sanjing Shares' main business is the research and development, design, production, and sales of photovoltaic grid-tied inverters, energy storage inverters and systems, and motor drive and control products. Among them, photovoltaic grid-tied inverters are used in residential and commercial and industrial distributed photovoltaic power generation scenarios, energy storage inverters and systems are used in residential photovoltaic energy storage scenarios, and motor drive and control products are used in the fields of industrial automation and smart homes.

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Looking at the most recent complete year (2022) data, photovoltaic grid-tied inverters contributed about 30% of Sanjing Shares' revenue, while energy storage inverters and systems contributed about 60% of the revenue.

Financially, during the reporting period (from 2020 to 2022, and the first half of 2023), Sanjing Shares' operating income was 420 million yuan, 710 million yuan, 1.55 billion yuan, and 1.076 billion yuan, respectively; the net profit attributable to the shareholders of the parent company was 55.5 million yuan, 98.6125 million yuan, 286 million yuan, and 211 million yuan, respectively, showing a continuous growth trend.

However, Sanjing Shares admitted in the prospectus that due to the combined effects of unfavorable factors such as the phasing out of subsidy policies in Italy, the EU and the US's policies to boost local manufacturing, and the potential phasing out of subsidy policies in other major export countries, the company faces the risk of its operating income being difficult to sustain growth.

In fact, in the third quarter of 2023, influenced by factors such as the digestion of European inventory, the decline in electricity prices, and a significant increase in interest rates, the demand for European household photovoltaic energy storage products did not meet expectations. This led to Sanjing Shares' sales revenue in the third quarter of 2023 being only 203 million yuan, a year-on-year decline of 51.94%, and a net profit of -17.7291 million yuan, turning from profit to loss compared to the same period of the previous year.At the September 2023 Science and Technology Innovation Board meeting, the main issues raised during the on-site inquiry of Sanjing Shares included, "Combining the market space of overseas sales, the phasing out of subsidy policies, policies to boost local manufacturing, industry future trends, and the company's response measures, etc., explain whether there has been a significant change in the company's operating environment, and whether it has a significant impact on continuous operation," and the sponsor's representative was also required to express a clear opinion.

Sanjing Shares had a brief listing experience on the New Third Board for two years and left a record of violation.

On December 29, 2015, the National SME Share Transfer System Co., Ltd. issued a letter (Stock Transfer System Letter [2015] 9324) agreeing to list the company's shares on the stock transfer system and include them in the supervision of non-listed public companies.

Starting from April 6, 2016, Sanjing Shares' stocks were publicly transferred on the stock transfer system through agreement transfer. However, soon after, in April 2018, the company announced the termination of its listing on the stock transfer system.

According to the application materials, Sanjing Shares failed to compile and disclose annual reports within four months from the end of the 2016 fiscal year, constituting a violation of information disclosure. The National Stock Transfer Company took self-regulatory measures against the company and its chairman, Lu Xueming, and board secretary Chen Shuoruo (formerly known as Chen Jianping), issuing a warning letter.

In this IPO inquiry process, the Shanghai Stock Exchange required Sanjing Shares to explain the specific process and reasons for the violation of information disclosure; combining the company's rectification measures and implementation, further explain the construction and operation of corporate governance and internal controls.