ABC Differentiated Pricing &Nbsp; First Used Green Shoes To "Refresh" System.

Editor's note: on the night of 20, the CSRC consulted with the society on the guidance on the deepening of the reform of the IPO system, which marked the formal start of the second phase of the IPO reform.

With the reform of the two IPO system, many listed companies have their own characteristics of listing, and it is a continuous optimization process. This topic provides reference and reference for the IPO by analyzing the characteristics of Listed Companies in the listing process.

In July 15th,

On the evening of 20 August 20th, the China Securities Regulatory Commission (CSRC) publicly solicited opinions on the guiding opinions on deepening the IPO system reform, which marked the start of the second phase reform of IPO, and the pricing issue was the core issue of IPO reform. At present, the IPO "three high" (high price, high P / E ratio and high fund-raising) phenomenon is obvious.

Moderate pricing

Some experts believe that the pursuit of market-oriented distribution is correct, but we can not equalize the marketization with the elimination of the difference between the primary and the two markets, nor the same as the actual value of the listed companies. It is a great demand for the actual value of the listed companies. As a balance between pursuing the market-oriented issue, the new round of IPO reform should be made to give profits to the small and medium investors, rather than the sellers who want the new chips to get a good price.

The above experts believe that the issue price of new shares listed on the Shanghai stock exchange should reflect the idea of giving profits to small and medium investors.

When the agricultural bank went public, it decided to follow the principle of "achieving a win-win situation between investors and issuers" when deciding its issuing price. The listing of Everbright Bank promoted "on the one hand, it should reflect the value of banks, and on the other hand, it should give investors certain profit margins".

The timing of the listing of Agricultural Bank of China is fluctuating in the capital market, which has become the hottest topic for IPO.

"The topic of capital market concern is always closely related to the market situation at that time."

A market personage commented, "ICBC and CCB are also listed with numerous queries when the capital market situation is completely different now."

In the second half of 2005,

Apart from the national social security fund, the Agricultural Bank of China has not introduced other strategic investors, and foreign capital has not been able to share the cake of the last state-owned commercial bank listing.

Some experts believe that "state-owned banks have the ability to reject foreign investment."

The Agricultural Bank determines the issue price range, fully considering the current domestic capital market conditions, and the price range has a significant discount compared with the price level of ICBC and CCB.

By the end of last week, if the net assets of each share were forecast by the end of 2010, the net rate of ICBC was 1.84 times, and that of CCB was 1.80 times.

The upper limit of the price range of ABC is 14.7% and 12.8% respectively, exceeding the general expectation of the market.

Due to the great difference between bank and China in terms of assets and business structure, especially the proportion of foreign exchange assets, the price limit issued by ABC still exceeds the bank's current market rate of 1.53 times.

ABC's final issue price earnings ratio is only about 10 times, and the price range of the A shares IPO of Everbright Bank listed below is the lowest price of RMB 3.10 yuan / share, and the issue price earnings ratio is only 11.92 times, which is obviously lower than that of other listed companies issued during the same period.

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A+H differential pricing

At present, the five state-owned commercial banks in the establishment of diplomatic relations are listed, but the listing process is different.

As early as June 23, 2005, due to the start of the SFC's reform of split share structure and the suspension of the domestic A share market, the planned A+H listed 6.02,0.00,0.00% (6.02,0.00,0.00%) gave up the A share market and took the lead in listing in Hongkong until 2007 when it returned to the A share market.

Then, in October 27th of that year, Construction Bank (4.69, -0.01, -0.21%) was listed on H shares and returned to A shares in September 25, 2007.

Unlike the bank and the China Construction Bank, although the Bank of China also chose the first H and A listing scheme, the pace of listing A shares was not 2 years long. In June 1, 2006, the two week after the Bank of China landed the HKEx, that was June 14th, the A share prospectus was issued.

The A+H listing of 4.13,0.01,0.24% has created a milestone in the history of Chinese securities, creating a historical precedent for the simultaneous issuance of A shares and H-shares.

In October 27, 2006, ICBC traded on A shares and H-share markets. Because of the better market environment, ICBC's A+H adopted a simultaneous pricing method.

This model is characterized by "simultaneous roadshows, bookkeeping at the same time, pricing at the same time, and unified price".

In June 9, 2010, the last state-owned commercial bank, the Agricultural Bank, began the process of listing A shares and H-shares.

Although the A+H of ABC seems to be similar to that of the ICBC and CITIC Bank (5.64,0.00,0.00%) listed in the past, in fact, the A+H of ABC has totally different institutional innovations, and this ensures the maximum efficiency of financing. A+H

According to ABC insiders, the listing of the ABC is in fact a mode of A after H, which is a step further than the A+H mode of ICBC and CITIC Bank.

The biggest difference is in pricing.

The Agricultural Bank adopts the way of "simultaneous road performance, bookkeeping and differentiated pricing".

A person close to ABC told reporters that if the A share and H-share price were chosen at the time, either the higher price of the Hong Kong stock or the lower price of the A share would be chosen, so the Agricultural Bank would make pricing according to the demand of the two markets.

Analysts believe that the A+H of this innovation system has a certain reference significance for the mainland enterprises to issue shares in the future.

Moreover, it is worth mentioning that the pricing of several A+H listed commercial banks in the United States was completed in the United States. "The three connection is actually very inconvenient", but the Agricultural Bank of China listed is the only bank that finishes pricing in Beijing. "This also shows that China's banking industry has been recognized internationally and its status has been improved."

Green shoe innovation

In 2009, before the last reform of the IPO system, Shang Fulin, chairman of the securities and Futures Commission, once said that the initial public offering companies could issue shares to more than 400 million shares, and they could sell shares to strategic investors. They could adopt the "over allotment option (Lv Xie)" system. The Agricultural Bank IPO introduced the green shoe "Refresh" system for the first time, which also provided a reference for the future listing of large cap stocks.

In 2006, ICBC became the first "crabs" to introduce "green shoe" mechanism. However, according to people close to ABC, the green shoes of the ABC were not exactly the same as those of the ICBC listed on the green shoes. In the course of exercising green shoes, ABC first used the "refreshing" system that was used internationally for the first time.

It is understood that the refresh system, that is, the exercise of excess placement options to buy shares, can be sold again.

It can be repeated.

According to relevant sources, the price difference between buying and selling is owned by the investor protection fund, so as to avoid manipulation.

Han Fuling, director of Applied Finance Department of Central University of Finance and Economics, believes that the bank's "refreshing" green shoes are also more common in foreign capital markets, which can provide more convenient access for investors, and he believes that "this more flexible green shoe mechanism is to attract more investors to participate and reduce entry conditions."

Data link

What is the green shoe mechanism?

The "green shoe" mechanism is also known as "green shoe option" and "over option". It was named after the first use of green shoe company's initial public offering (IPO).

It is a right granted by the issuer to the lead underwriter. The principal underwriter who obtains the right can, according to the market subscription status, ask the issuer to issue an additional amount of stock (usually no more than 15% of the issuing amount) or to buy shares from the two market, or both, after the stock market has been listed for a period of time (usually 30 days).

Green shoes were first named by the United States as the Boston green shoe manufacturing company's first public offering (IPO) in 1963. The green shoe mechanism is mainly used in the market atmosphere is not good, and the results are not optimistic or unpredictable.

The purpose is to prevent the share price from falling to the issuing price or issuing price after the IPO is released, enhancing the confidence of investors participating in the primary market subscription, and achieving the smooth pition of the new share price from the primary market to the two level market.

The adoption of "green shoes" can regulate the scale of financing according to market conditions, so as to make the supply and demand balance.

In 2006, ICBC launched the first time the introduction of the excess placement option mechanism (green shoes) into the A share market and won a great victory, giving people great hope that the system will play a stabilizing role in stock prices.

Subsequently, in the Agricultural Bank and Everbright Bank which was listed in 2010, green shoes once again played a role in maintaining stability.

The forty-eighth provision of the securities issuance and underwriting management regulations, which came into effect in September 19, 2006, stipulates: "if the number of initial public offerings exceeds 400 million shares, the issuer and its main underwriter may use the option of excess placement in the issue plan."

Subsequently, ICBC first used the green shoe mechanism in its A share listing in October 27, 2006.

The green shoe option has entered the A share market and has made contributions to the stability of the A share market.

Almost every new issue in the international market has green shoes. In practice, the number of excess sales is negotiated by the issuer and the main underwriter, generally within the scope of 5%~15%, and the option can be partially exercised. At the same time, when the Underwriters exercise the excess allotment rights, there are also some variables.