(Yicai) Sept. 13 -- More than double the number of Chinese companies have withdrawn from going public on the mainland bourses so far this year, compared with the whole of last year, despite getting the regulatory green light to go ahead, amid a business slowdown and tighter regulations.

Forty-five firms have pulled their initial public offering applications on the Shanghai, Shenzhen, and Beijing bourses so far this year, two-and-a-half times the number over the whole of 2023, according to Yicai research.

Although most companies believe that their IPO is a matter of course once their applications pass the China Securities Regulatory Commission's reviews, an increasing number are being instructed to quit in subsequent rounds of regulatory queries as reviews get tougher, an investment consultant told Yicai.

Biotech firm PTM Biolabs was the latest firm this year to pull out, terminating its application to go public on the Shenzhen stock exchange's Nasdaq-style ChiNext Board on Sept. 11.

Of the 45 to quit, eight are in the computer, communication, and electronics equipment manufacturing industry, six come from the dedicated-purpose equipment manufacturing sector and four are in the chemical raw material and chemical manufacturing industry.

Poor performance is the main reason behind their decision to withdraw.

Revenue tumbled at VOSO Hinge Intelligent Technology between 2020 and the first half of 2023. If demand stays weak, the hinge and shaft manufacturer’s performance will continue to decline and it will be unable to expand in the market, it said.

Xintianxia’s net profit plunged 64.4 percent in 2022 from the year before to CNY75.7 million (USD10.7 million), while revenue slumped 5.4 percent to CNY750 million (USD105.6 million). The chipmaker’s gross margin has contracted 17.2 percent from 2021.

The semiconductor industry is not doing as well as before, Xintianxia said. Demand is sluggish, impacted by the macro economic situation, geopolitical tensions and other factors. The cost of raw materials has impacted production costs. Spending on research and development has increased and capital impairments have also risen.

Five of the companies to ended their IPO applications this year have applied to go public on the ChiNext Board.

Editors: Shi Yi, Kim Taylor