Xintong International Faces CSRC Scrutiny Ahead of Hong Kong IPO

Xintong International, a company planning to list on the Hong Kong Stock Exchange, has been asked by the China Securities Regulatory Commission (CSRC) to provide additional information regarding the actual use of its production lines and related compliance issues. This request is part of the CSRC's due diligence process to ensure that the company meets all regulatory requirements before proceeding with its initial public offering (IPO).

The CSRC has specifically asked Xintong International to clarify whether its production lines are in actual operation and to provide details on the progress of handling the identification of state-owned shareholders. Additionally, the regulatory body has sought information on whether the shares held by shareholders participating in the "full circulation" of the IPO are subject to any pledges, freezes, or other restrictions. The CSRC has also requested information on the rationality of the stock prices for new shareholders, such as Jiaxing Youtong and Maotai Jinshi, who joined within the last 12 months, and the potential impact of the relationship between Maotai Jinshi and the underwriter, Zhongxin Securities, on the independence of the intermediary institution.

Xintong International has been asked to provide details on the specific operations of its company and subsidiaries, including cell technology research and application, production and sales of radioactive drugs, sales of radioactive sources, and market research. The company must also clarify whether it has obtained the necessary qualifications and permits, and whether its operations fall within restricted or prohibited areas for foreign investment.

According to the prospectus, Xintong International is a leader in the Chinese radioactive drug market, focusing on the development and commercialization of radioactive drugs with the potential to be the first in China to be listed, or the first or best in their class. As of the last practical date (May 16, 2025), Xintong Medical's pipeline includes 15 assets focused on oncology, neurodegenerative diseases, and cardiovascular diseases, including four core products: XTR008, XTR006, XTR004, and XTR003.

From a financial perspective, Xintong Medical achieved revenues of approximately RMB 10.232 million and RMB 44.064 million for the years 2023 and 2024, respectively. During the same periods, the company reported losses of approximately RMB 309 million and RMB 156 million, respectively.

This request from the CSRC highlights the rigorous regulatory environment in China, where companies seeking to list on international exchanges must demonstrate full compliance with both domestic and international regulations. The CSRC's scrutiny aims to protect investors and ensure the integrity of the financial markets. Xintong International's response to the CSRC's inquiries will be crucial in determining the timeline and success of its IPO. The company will need to provide comprehensive and transparent information to satisfy the regulatory body's concerns. This process is part of the broader regulatory framework that governs IPOs in China, ensuring that companies meet high standards of compliance and transparency before accessing public markets.

The CSRC's request for additional information is not uncommon in the IPO process. Regulatory bodies often seek to verify the operational status and compliance of companies to mitigate risks for investors. Xintong International's ability to address these concerns effectively will be a key factor in its IPO journey. The company's response will be closely monitored by market participants and regulatory authorities alike, as it navigates the complex landscape of international listings.