The IPO was approved, so why did he suddenly quit?

AI Question · What challenges do shareholders face after the postponement of the betting agreement?

Text | Li Delin

If you are an investor who invested in a project, waited for years, submitted materials, faced three suspensions by the exchange, finally endured 18 months, got the IPO approved, and submitted a registration application to the CSRC—you’d be celebrating with champagne, just waiting for the company to go public. It’s exciting to think about. But one day, the company suddenly says, “Forget it, we’re not going public after all.” Wouldn’t you be devastated?

Shareholders of Meiya Technology are currently facing such a reality.

One of the key purposes of the Beijing Stock Exchange (BSE) is to serve innovative small and medium-sized enterprises. Meiya Technology sounds like a tech company, close to high-end manufacturing or new materials, right? If you think so, then the company’s name is deceiving your innocent eyes. Sorry, Meiya Technology’s main business is digital ticketing services—basically, selling travel tickets. Throughout the IPO inquiry process, the exchange kept asking whether the company’s innovation attributes aligned with the BSE’s positioning.

On March 16, Meiya Technology held a board meeting and approved a resolution to terminate the IPO. Independent directors expressed their independent opinions agreeing with the termination. Note that this decision was not a temporary suspension but a complete halt to the IPO process. Of course, the resolution still needs to be submitted to a temporary shareholders’ meeting for approval. Just three months after submitting the IPO registration application on December 12, 2024, shareholders are watching their money turn into water.

Meiya Technology submitted its IPO application on June 27, 2024. Two months before that, in April 2024, the Guangdong Securities Regulatory Bureau conducted an on-site inspection and issued a regulatory concern letter in June. The regulator pointed out that from 2021 to 2023, the company’s R&D hours registration was irregular; it was not based on actual attendance but on internally agreed ratios, with some management staff’s work hours being registered as R&D time. Simply put, R&D hours were decided arbitrarily by leadership.

What is innovation? If you are a company claiming to be tech-driven, innovation is a key indicator, and R&D is crucial. But if your R&D staff’s working hours are decided arbitrarily, how can anyone believe in your company’s technological strength? No wonder the BSE repeatedly questioned the company’s innovation claims. At the initial stage of submitting IPO materials, regulators already peeled back Meiya Technology’s veil of innovation, clearly warning the public that its R&D hours were problematic. Whether they will succeed in IPO is up to your own judgment.

Regulators also pointed out that some of Meiya Technology’s tourism revenue was not recognized in the period when services were provided, in accordance with accounting standards, but was deferred, causing revenue to be recognized across periods. For example, in 2021, tourism revenue should have been increased by 6.16 million yuan, and in 2023, decreased by 8.66 million yuan. This affected the accuracy and comparability of financial statements. Additionally, the company’s shareholders’ meetings, board of directors, and supervisory board had flaws—such as proxies for legal shareholders lacking specific authority and time limits, acting arbitrarily.

As a company without a single controlling shareholder but with actual controllers, Meiya Technology is a typical family-run enterprise. Two siblings, along with their spouses, control over 66% of the voting rights. Internal governance has many issues—beyond the regulatory inspections, during the IPO process, questions arose, such as the treasurer at the Shenzhen branch who embezzled company funds for ten years through misappropriation of Alipay account funds, totaling 19 million yuan, only discovered in 2022.

If the treasurer at the branch was reckless, the actual controllers’ financial practices were also irregular. To obtain business guarantee limits, the controllers once called on core employees to provide personal assets as counter-guarantees. In other words, personal and company funds were mixed, making it easy to obscure the truth. Many listed companies in A-shares have engaged in financial fraud—mainly by the controllers and core members manipulating cash flows to inflate revenue and profits, aiming to fake financial health and extract funds.

Did Meiya Technology withdraw at the last minute because of R&D issues? Its financials are also problematic. For example, as of June 30, 2025, accounts receivable totaled 806 million yuan, accounting for over 68% of total assets. In 2024, revenue was only 401 million yuan, and the uncollected amount in the first half of 2025 was twice the 2024 revenue. In the first half of 2025, the net cash flow from operating activities was -44.0686 million yuan, meaning most of the net profit did not convert into actual cash inflow. The company’s profits might be just “on paper.”

Meiya Technology’s listing journey has been quite bumpy. It was listed on the New Third Board (NEEQ) on October 23, 2023. At that time, it announced it had applied for direct regulatory review through the BSE’s linkage mechanism, planning to apply for listing within 18 months. In 2024, after receiving a regulatory letter from the Guangdong CSRC, the company submitted its prospectus to the BSE. During this period, due to expired financial data, the IPO was suspended three times. But it’s not a big deal; the company’s actual controllers need to meet their goal of going public as planned, aiming for approval by the end of 2025.

As early as 2016, Meiya Technology introduced five external investors. The company’s controllers and 21 individual shareholders signed betting agreements. Unexpectedly, in the second and third years after the investment, net profits fell below the agreed targets, and two controllers paid out 8.87 million yuan in cash compensation to external investors. Besides the initial 800,000 yuan payment, the second phase was extended to June 30, 2025. If the IPO succeeded, the second compensation was waived. There was also a 3.6% equity swap bet.

According to the investment agreement, Meiya Technology was supposed to go public before December 31, 2020; otherwise, buyback and co-sale rights would be triggered. This clause was definitely triggered. Before the listing on the transfer system in 2023, the buyback and co-sale rights were extended to June 30, 2025, after negotiations. Despite the extension, in the same month the agreement was signed, external investors transferred some shares to four controllers, cashing out 31.71 million yuan. When the IPO application was filed, external shareholders were still involved.

Meiya Technology mainly sells international airline tickets, with major clients being central and state-owned enterprises and large private companies. In the three years prior to the application, net profit after deducting non-recurring gains and losses reached up to 70 million yuan. In 2023, the company’s overall revenue dropped by over 22%. Whether to appease external shareholders or the controllers’ desire to buy back shares, the company distributed 34.22 million yuan in dividends to all shareholders that year.

From the first trigger of the buyback bet, the extension of the agreement, to the approval of the IPO by the BSE—five years of ups and downs. It seemed everyone was about to be free, but Meiya Technology withdrew. Shareholders are probably the most devastated now. It’s not hard to imagine that the extended betting and buyback clauses mean the controllers will have to face the issue of resuming performance obligations—whether to continue extending or to buy back shares with their own money. An IPO can cover up many flaws, but this time, the withdrawal at the last moment suggests that the company’s historical problems are hard to pass. Facing the retreat at the final moment, perhaps ordinary people would say, “That’s just a bunch of scabs eating beans, hanging in the air.”