On October 29th, Haier Group's supply chain management company, RRS, announced the withdrawal of its IPO application on the Growth Enterprise Market, despite having successfully passed the review as early as May 2023. This withdrawal occurred after nearly a year and a half of unsuccessful registration submission, raising market concerns about the company's financial status and business independence.
RRS's listing application was first accepted on May 12, 2021, but due to delays in updating financial data, the review process was slow. In March and September of this year, the company received consecutive requests to update financial documents, and the September submission was not completed on time, ultimately leading to the withdrawal of the listing application on October 29th. RRS's performance declined in 2022, with revenues of 14.036 billion, 17.163 billion, and 16.847 billion from 2020 to 2022 respectively, and net profits of 431 million, 579 million, and 575 million respectively.
In addition to financial conditions, RRS’s close business ties with Haier Group and Alibaba-related clients have also become a focal point of regulatory attention. From 2020 to 2022, revenue from affiliated Haier clients accounted for 33.13%, 30.60%, and 31.55% respectively, while revenue from Alibaba-related clients accounted for 15.80%, 15.00%, and 15.80%. The company stated in the report that these transactions were based on fair and reasonable cooperation, but market doubts about its independent operation capabilities are unavoidable. Moreover, as RRS, controlled by Haier Group, has equity relationships with two joint sponsors, CICC and China Merchants Securities, concerns about the complexity and independence of the company's governance structure have been heightened.
Notably, on the same day, Haier Smart Home announced that it would integrate RRS into its consolidated financial statements through a voting rights entrustment agreement to deepen logistics integration reform and enhance operational efficiency. This strategy seems to indicate a reduced need for Haier Group for RRS’s independent listing, possibly shifting focus towards integrating logistics business within the group.
According to public data, as of 2023, up to 46 companies have voluntarily withdrawn after successfully passing the meeting, with the Growth Enterprise Market seeing the most withdrawals at 41 companies. Reasons for withdrawal usually include underperformance, market positioning adjustments, or withdrawal due to major public opinions. Industry insiders point out that with exchanges raising listing standards, companies unable to meet the new requirements may find withdrawing to be a reasonable decision.
This withdrawal by RRS reflects the increasingly stringent market and regulatory requirements, highlighting that for an IPO, companies not only need to pass review but also meet higher standards of financial stability and independence.
