Why Did the Refinancing Fail? Analyzing Key Factors from Six Perspectives

In recent years, the scale of refinancing in China’s A-share market has continued to expand. However, as the pace of financing has accelerated, some notable issues have also emerged. To guide the market toward rational development, relevant policies have gone through a shift from phased tightening to structural optimization, and from “one-size-fits-all” restrictions to precise support for “stronger and more high-tech” companies. The core direction has consistently been to strictly review and tighten controls, highlight an industrial orientation, and better serve the real economy and new quality productive forces.

Under the regulatory policy guidance of stricter enforcement and support for the better while limiting the worse, the refinancing ecosystem in the A-share market has continued to improve. In some companies’ financing plans, financing was ultimately terminated due to factors such as compliance requirements, the market environment, or their own fundamentals. This article focuses on cases of refinancing termination, summarizes typical characteristics, analyzes the underlying drivers, and discusses how listed companies can reasonably plan their financing paths to avoid the risk of projects being terminated.

The number of terminations declined significantly by year-end 2025

According to Wind’s “Refinancing Review and Filing Status” table, and based on counts by the latest announcement date (with an already-implemented shift to statistics by issuance date), the number of terminated A-share refinancing companies in 2025 (including rights issues and convertible bonds) was 35. This is a sharp drop from 127 in 2024.

In terms of success rate, the refinancing success rate in 2025 exceeded 66%, representing an improvement compared with 2024. If measured by the approval rate of refinancing reviews, the number of refinancing projects passing reviews in 2025 was close to 95%, with a review rejection rate of 1.21%, far lower than the level in the past four years.

For this phenomenon, a domestic professional IPO consulting firm—Elephant Investment Consulting (Daxiang Tougu) analyst—told Securities Times·Data Talk reporters that the sharp decline in refinancing termination cases in 2025 is driven most fundamentally by the strict implementation of regulatory policies. By establishing a negative list and strengthening classified reviews, regulators filtered out a large number of non-compliant filing projects at the source. At the same time, they increased pressure on intermediary institutions’ responsibilities, adopting zero tolerance for “hype-style” financing and illegal changes to the intended use of raised funds, so that companies and intermediaries no longer dare to file blindly.

The analyst of Elephant Investment Consulting also specifically emphasized that, beyond policy, the market environment has also played a certain role as a buffer. As market sentiment recovered in 2025 and valuations stabilized, institutional subscription willingness rebounded, and the number of passive terminations caused by issuance failures also fell significantly. Companies have become more rational about refinancing as well; they advance financing based on genuine funding needs and the feasibility of projects. This kind of self-selection improves filing quality and pushes the number of terminations downward.

Voluntary withdrawal has become the mainstream

Against the backdrop of ongoing stricter regulation, refinancing behavior by listed companies has become increasingly cautious. Among termination cases, voluntary withdrawal has become the main mode, reflecting that companies’ considerations regarding refinancing are becoming more rational and stringent, and also showing that the policy orientation of balancing “tightening” with “optimization” is working.

Based on statistics by the date of the initial draft announcement, voluntary withdrawal has become the primary way refinancing projects get stalled. From 2021 to 2025, the share of refinancing cases involving voluntary withdrawal in all termination cases exceeded 90%. In 2024, nearly all were voluntary withdrawals; in 2025, the share of voluntary withdrawals was close to 90%.

Among cases involving voluntary withdrawal, Jiuhua Tourism announced in September 2025 that, after comprehensively considering changes in the current market environment and the company’s development plan, and following full communication and prudent demonstration among relevant parties, the company decided to terminate this proposal to issue A-share stocks to specific targets, and to withdraw the related application documents. This wording is quite representative among many termination announcements.

The analyst of Elephant Investment Consulting told Data Talk reporters that in recent years, cases of companies voluntarily withdrawing refinancing applications have been common. The underlying reasons are mainly as follows: First, during the review process, faced with multiple rounds of questions from the exchange that they cannot “explain away” (for example, proposed fund-using projects cannot stand up to scrutiny, or previous raised funds were not used as required). To avoid receiving regulatory letters or leaving negative records, listed companies voluntarily withdraw their applications. Second, changes in the market environment—such as a falling stock price—raise the risk of issuance failure, prompting companies to withdraw their applications. Third, changes in the company’s own strategy or compliance risks faced by intermediary institutions can also force companies to withdraw their applications.

Optimization of regulatory policies has further increased the prevalence of voluntary withdrawal. In August 2023, the China Securities Regulatory Commission announced several measures to optimize refinancing supervision arrangements, including controlling large-scale refinancing and restricting refinancing for listed companies with conditions such as share price declines below the issue price (“break-issue”), trading below net asset value (“break-net”), and ongoing losses. Subsequently, multiple companies with the above-mentioned conditions announced the termination of their refinancing plans. In November 2023, the Shanghai and Shenzhen exchanges issued five major measures to standardize refinancing behavior, leading another batch of companies to terminate related matters on their own because they no longer met the requirements.

A series of policies introduced by regulatory authorities do not aim to prohibit refinancing; instead, they set higher requirements for the reasonableness and necessity of financing behavior. This also signals that when listed companies plan refinancing, they should focus on the rational use of raised funds, concentrate on their core business, improve quality, avoid blind cross-industry investments, and truly use refinancing to achieve long-term development and strategic upgrades for the company.

Three major characteristic profiles

From the termination cases, three key characteristics stand out in terms of the sector they belong to, financing scale, and the company’s market capitalization.

First, the termination rate is lowest for the ChiNext Board. Based on the distribution by board of the companies whose refinancing was terminated, the main board accounts for the highest proportion—65%. ChiNext companies account for about 22%. STAR Market companies are lower at about 10%. North Exchange (Beijing Stock Exchange) companies are the fewest in number.

When compared with the total number of refinancing companies in the same period for each board (including all companies at every review stage as well as implemented cases), North Exchange companies have the highest refinancing termination rate, exceeding 40%. STAR Market and main board are both above 10%. By contrast, the termination rate for ChiNext companies is the lowest, below 10%.

Second, the share of termination cases involving small-scale refinancing has increased significantly. Since 2024, the average intended amount of funds to be raised by terminated refinancing companies has fallen sharply. The average intended amount of funds in 2022 and 2023 termination cases both exceeded 1 billion yuan; by 2024 and 2025, the figures fell to 580 million yuan and 827 million yuan, respectively. In addition, among termination cases in 2024, the proportion of companies with intended fund-raising amounts below 500 million yuan was close to 95%, a large increase. In 2025, the proportion remained above 55%.

This characteristic is related to the overall decline in fundraising scale across the entire refinancing market. Among refinancing cases that were successfully implemented, refinancing amounts since 2024 have also fallen noticeably. In 2024, the average was about 1.1 billion yuan; in 2025, it was about 1.6 billion yuan (excluding fund-raising projects at the 10-billion-yuan level). This means that the previous wave of refinancing at tens of billions or even hundreds of billions has clearly cooled off. More practical and focused small-scale financing is gradually becoming the mainstream choice for the market.

Third, companies with small market capitalization have a relatively higher termination rate. In terms of company size, companies whose refinancing was terminated generally have lower market caps. Data show that for listed companies that successfully completed refinancing, their average market cap at the time they first released the refinancing proposal was about 17.01B yuan, while the average market cap of terminated companies was only 11.94B yuan. There is a clear gap between the two.

Relatively speaking, companies with smaller market caps often have weaker underlying business fundamentals and profitability stability than large enterprises. At the same time, they may also have shortcomings in areas such as corporate governance, internal controls, and financial standardization. When facing multiple rounds of detailed review questions from exchanges, these issues are more likely to be exposed—such as insufficient justification for projects using raised funds, low efficiency in the use of previously raised funds, and the need to improve the quality of information disclosure—making it harder to pass review.

Six major factors behind “a setback” in refinancing

Refinancing terminations have become fairly common in China’s A-share market. Especially under the trend of increasingly strict regulatory standards, termination or withdrawal can occur at various stages from acceptance to issuance. So what are the core factors that cause refinancing to “hit a wall”?

According to Wind data, Data Talk collected and summarized more than 300 termination cases of refinancing over the past five years, using the date the proposal was released as the basis. By combining relevant information such as companies’ issuance documents, market performance, and financial data, it was found that refinancing terminations have six main influencing factors.

First is market factors: falling stock prices reduce attractiveness and lower investors’ willingness to subscribe. Smooth refinancing advancement cannot happen without strategic investors’ recognition and participation. The strength of a company’s stock performance directly determines investors’ subscription willingness.

Judging from the company’s price-to-book ratio on the first day of the refinancing proposal and the stock performance from the proposal release date to the latest announcement date, among the more than 300 cases, there were as many as 180 companies that were below net asset value or had price declines of more than 10% within the range, accounting for nearly 57%—the top share among the six major factors. For placement investors, participating at a rate based on at least 80% of the average price of the 20 trading days prior to the pricing benchmark has traditionally been an important attractiveness point. But after the stock price fell significantly, investors were more inclined to buy and sell flexibly in the secondary market, and their motivation to participate in the placement clearly cooled down.

Second is financial factors: weak fundamentals block refinancing progress. In August 2023, the CSRC clearly proposed “emphasizing support for the better and limiting the worse.” For listed companies refinancing in situations such as share-price break-issue, trading below net asset value, continuous losses in operating performance, and an excessively high proportion of financial investments, their financing interval and financing scale should be appropriately restricted.

From the financial data of more than 300 terminated companies above, more than 150 companies had at least one of the following conditions in the year before the proposal was released: net profit losses, negative net cash flow, or an asset-liability ratio above 60%. This accounts for more than 48% of the total.

Third is cash reserves: sufficient funds on the books raise doubts about the rationale for financing. According to statistics, among the more than 300 companies, there were 135 companies whose cash on hand (total monetary funds and trading financial assets) in the year before the refinancing proposal was released exceeded the intended amount to be raised. This is close to 43%.

For example, Fangda Special Steel first released its proposal in March 2023, planning to raise 3.1 billion yuan through convertible bonds. In September of the same year, the company reduced the intended amount to be raised to 1.8B yuan. However, after multiple rounds of inquiries, the company still terminated the refinancing. In the exchange’s three rounds of inquiry, issues such as the reasonableness of the financing scale were addressed. Meanwhile, the company’s cash on hand exceeded 6.2 billion yuan at the end of 2022, and was close to 9.2 billion yuan at the end of the third quarter of 2023. Proceeding with refinancing despite ample funds has become a core point of doubt for both regulators and the market.

Regarding this phenomenon, the analyst of Elephant Investment Consulting told reporters that behind this behavior there are usually three considerations: first, to fund long-cycle, capital-intensive capacity expansion or long-term R&D reserves, the company needs to keep cash for day-to-day operations and a safety buffer, and cannot use it casually. Therefore, equity financing is needed to match long-term capital expenditures; second, to optimize the capital structure by refinancing to repay high-interest liabilities and reduce the leverage ratio, thereby saving financial costs and improving resilience to risks; third, from the perspective of market value management and equity structure planning, the company may bring in strategic investors or reserve room for future equity incentives and M&A. However, such behavior is very likely to draw regulatory attention. The core risk is that regulators will focus their inquiries on the “necessity of the funds.” If the company simultaneously has large dividend payouts, purchases of financial products, or idle funds from previous raised financing, it will be directly deemed “hype-style financing,” facing strict inquiries and even requirements to reduce the financing scale.

Fourth is fundraising reasonableness: whether the use of funds is focused on the core business. The reasonableness of projects proposed for the use of proceeds, whether the fundraising is focused on the core business, and the progress and effectiveness of the use of funds from the previous round are core points in regulatory inquiries. According to statistics, among the 316 companies above, the proportion of companies whose inquiry letter explicitly involved the above issues was close to 40%.

The analyst of Elephant Investment Consulting pointed out that based on termination cases in recent years, common “hard flaws” by enterprises tend to cluster in three areas: first, at the project level—capacity planning is disconnected from reality, existing capacity utilization is low yet they still blindly expand, key approvals are not implemented, and benefit forecasts are overstated; second, at the purpose level—funds are used for cross-industry investments into real estate, quasi-financial businesses, or non-core areas; third, at the historical level—funds from the previous round remain idle for a long time, project progress lags, benefits do not meet expectations, or the intended use of proceeds is frequently changed. All these issues significantly reduce the probability of passing refinancing.

Fifth is regulatory factors: policy tightening and increasingly strict supervision lead to refinancing terminations. Since August 2023, China’s A-share refinancing entered a phase of tightened regulation. Review standards have been raised, inquiry intensity has increased, and many companies voluntarily withdrew their applications due to concerns raised during reviews or because they failed to meet issuance conditions. Among the terminated companies above, the proportion of companies that terminated their refinancing due to the impact of regulatory tightening is close to 26%.

Sixth is corporate governance: risks within the company are high and make it hard to pass the review. Corporate governance and compliance status are the basic thresholds for refinancing. Statistics show that among the terminated companies above, more than 24% had any of the following situations in the year before the proposal was released: violations in information disclosure, two or more administrative penalties, equity pledge ratios of no less than 30%, and large related-party transactions. Governance issues directly affect the outcome of refinancing review.

In addition to the above six core factors, listed companies adjusting their strategic plans, changes in industry environment, regulatory approvals expiring without effectiveness, or intermediary institutions being punished can also lead to refinancing projects being terminated.

Let refinancing truly play the role of market-based allocation of resources

In recent years, the refinancing market has shown a favorable pattern of “appropriately balanced loosening and tightening,” “coordinated strictness and support,” and “dynamic balance.” Since 2025, the refinancing market has continued to rebound. In this year’s first quarter, the total refinancing amount in the A-share market has already reached 227.9B yuan (based on listed companies’ listing dates). The total amount hit the second-highest level in the past 12 quarters, only lower than Q2 2025.

While the market has warmed up, regulators have consistently adhered to the orientation of supporting the better while limiting the worse, and strictly standardizing refinancing. They have drawn clear “red lines” around key dimensions such as profitability, intended use of funds, information disclosure, and financing necessity, guiding refinancing back to its fundamentals. Against this backdrop, listed companies with financing intentions are also becoming more rational: they no longer file blindly, but instead proceed cautiously by taking a comprehensive view of their fundamentals, funding needs, and the market environment.

Changes in the data confirm both regulatory effectiveness and the ongoing improvement of the market ecosystem. Looking at refinancing data from the past five years, the overall quality of relevant companies has clearly improved: at the stock-price level, since 2023, the number of companies whose stock price fell sharply after releasing refinancing proposals (from the first proposal to the latest announcement date) has declined noticeably; at the financial level, among companies that released proposals in 2025, the proportion of companies with profits in the previous year reached a five-year high, and the average asset-liability ratio fell to the lowest level in the past five years; at the level of fund rationality, the proportion of companies whose cash on hand exceeded the intended amount to be raised has also shown a downward trend. In 2025, only 20% had cash above the intended raising amount—meaning the phenomenon of “financing even though they have more than enough money” has clearly decreased.

Refinancing termination, in essence, is a beneficial clearing out driven jointly by the market and regulators. In the past, some companies relied on refinancing to “raise money from the market” (“circle money”), engaged in blind cross-industry expansion, or pursued excessive financing. This not only consumed market resources but also harmed the interests of small and medium investors. Under strict “red line” constraints, projects with weak fundamentals, insufficient financing necessity, and unreasonable use of funds are either voluntarily withdrawn or discouraged by regulators. Although it looks like refinancing “hit a wall,” it is in fact an inevitable outcome of market self-purification and resources concentrating toward high-quality companies. Terminating a batch of low-efficiency financings is meant to protect the implementation of more genuinely needed and value-creating projects.

As an important engine for the development of the capital market, the core value of refinancing lies in supporting listed companies to strengthen their core businesses, drive technological innovation, and advance transformation and upgrading—thereby improving profitability and returns to investors. When the “red lines” are kept and disorderly practices decrease, refinancing can truly shift from being a “financing tool” to becoming a “blood-making engine.” On the one hand, it injects long-term capital into high-quality companies, supporting capacity upgrades, technological breakthroughs, and industry integration; on the other hand, it directs funds toward high-conditions, high-efficiency, and highly compliant quality assets, improving the overall capital market’s efficiency in allocating resources.

For listed companies, termination is not necessarily failure, but rather a reflection of rational choice and compliance awareness. Only by basing decisions on genuine needs, focusing on core business development, and improving operating quality can refinancing play a positive role.

In the future, as regulators continue to implement a policy of “supporting with control and balancing loosening and tightening in an appropriate manner,” the refinancing market will become more standardized, transparent, and efficient, truly achieving a benign cycle where financing is effective, enterprises act with initiative, and the market operates in an orderly fashion.

Statement: All information provided by Data Talk does not constitute investment advice. The stock market is risky; investment requires caution.

Proofread by: Zhao Yan

Art editor: Chen Jinxing