(Yicai Global) Dec. 13 -- Snacks are popular among online shoppers in China and the product sales are rising rapidly. However, the road for the nuts producer Anhui Three Squirrels Electronic Commerce Co.'s listing is not so smooth. China's securities regulator has shelved the review of the company's initial public offering (IPO) application on the grounds that it needs further verification on a number of issues regarding the firm.

The company first submitted an IPO application to the CSRC in April, but then suspended the application due to change of lawyer. It submitted the application documents on Oct. 31 for the second time. The company plans to be listed on the Nasdaq-style ChiNext board of the Shenzhen Stock Exchange to make initial public offering of no less than 40 million shares to raise nearly CNY1.5 billion. The funds will be used for building online sales network.

In China's securities market, a company that hopes to be listed for financing must get the approval of China Securities Regulatory Commission (CSRC), the country's top securities regulator.

Three Squirrels, founded in 2012, is China's first food brand specifically targeting online shoppers. It is also China's largest food e-commerce business in terms of sales. The nuts producer achieved CNY2.894 billion (USD437 million) revenues in the first half of this year, with a net profit of CNY241 million, in dramatic reversal of fortune after making a loss in 2014.

Although Three Squirrels has achieved rapid growth in just five years and is applying for IPO, it is difficult to effectively supervise the food safety of its products due to the company's business model, which is based on commissioning other manufacturers for food processing or purchasing products directly from suppliers for distribution.

The eight consumers have sued the nuts producer between July 2016 and June 2017 on the grounds that the food products quality guarantee period labeling is not consistent with the food safety standards and the products don't meet the food safety standards, public information shows. The courts have yet to reach a verdict on the cases.