IPO Pricing System Dispute Caused By The Lowest Fund-Raising Company Of Shangwei New Material Technology Innovation Board: Does The Rule Suppress The Issue Price Or Does The Market Mechanism Take Effect?

The annual net profit is 78.27 million yuan, and the net fund-raising is only 70.04 million yuan. On September 15, the issuance announcement of Shangwei new materials, which is about to be listed on the science and technology innovation board, triggered hot discussions in the whole market.

The net profit of the company is expected to be 277.908 million yuan after the initial price inquiry, which is expected to be RMB 2700.52 million yuan, which is lower than that of the initial public offering price of RMB 27780 million yuan.

The net amount of funds raised by science and technology reached the lowest level of 70 million. According to the company's total share capital of 403.2 million shares and the issue price, the issuance market value of Shangwei new material is only 1.004 billion yuan, barely meeting the minimum requirements of the five sets of listing standards of the science and technology innovation board, that is, no less than 1 billion market value.

Shangwei's new material issue has attracted wide attention from the whole market. Even some investment banks exclaimed, "it is possible that the stock will not be issued in the future!"

Shangwei new materials or more extreme cases, the 21st century economic report reporter statistics found that similar to Shangwei new materials, the final fund-raising amount was less than expected. Since August 24, 19 listed companies issued through registration system have raised less funds than expected.

On September 9, Fengshang culture became the first sub IPO to be broken under the gem registration system; on September 10, Meichang shares, spatiotemporal technology and new Yaqiang were successively issued.

Whether it's breaking or raising less than expected, it actually points to the same source: the issue pricing is changing.

A Penny Less is a failure

This issue of Shangwei new material is breathtaking.

According to the first standard of the Listing Rules of the science and Technology Innovation Board: "1) the estimated market value is not less than 1 billion yuan, the net profit in the last two years is positive, and the accumulated net profit is not less than 50 million yuan, or the market value is not less than 1 billion yuan, the net profit in the latest year is positive and the operating income is not less than 100 million yuan."

According to the total share capital of the company after the issuance of 403.2 million shares and the issue price of 2.49 yuan per share, the issuance market value of Shangwei new material is only 1.004 billion yuan, just exceeding the listing standard. If the company is not listed on the market, it will be rejected because of its low price.

"Under the registration system, it is normal that the actual amount of fund-raising is less than expected. The fundamental reason is the change of supply-demand relationship. Before the issuance of new shares was small, new shares were scarce and sought after, and the issue price was high; when the pace of new stock issuance was fast, the new shares were not so popular, and the price came down. The case of Shangwei Xincai will certainly appear, just fall on its head. " Wang Jiyue, a well-known investment banker, said.

Since 2020, IPO has been speeding up as a whole. Wind data shows that the number of initial public offerings in Shanghai and Shenzhen stock markets in July and August reached 52 and 63 respectively, and the initial funds raised were 109.866 billion yuan and 64.701 billion yuan respectively. Just over half of September, the number of initial enterprises has also reached 49, with the initial amount of 35.251 billion yuan.

So, why does this special case fall on the head of Shangwei new material? Some investors can see the new information.

According to the issuance announcement, a total of 6954 allotment objects managed by 415 offline investors all meet the requirements of offline investors specified in the announcement on issuance arrangement and preliminary inquiry. The quotation range is 2.49 yuan / share - 118.56 yuan / share, and the total number of shares to be purchased is 111174.8 million shares. Among them, the quotation range of more than 400 inquiry agencies is between 2.49 yuan and 4.96 yuan, of which 399 are all quoted at 2.49 yuan.

Our reporter once reported that the registration system inquiry frequent "group low price" situation. From the above quotation, there are also doubts from market participants that there is a group of investors pushing down the issue price of Shangwei new material.

From the logical point of view, it has its rationality. Since August, many new shares have been broken. Fengshang culture has become the first secondary new shares issued under the gem registration system. Kasai bio was listed on August 12 with an offering price of 133.45 yuan / share and a P / E ratio of 120.7 times. It only rose by 17.65% on the first day of listing. Subsequently, its share price continued to decline and broke on the fourth trading day. On September 2, Ruilian new materials landed on the science and technology innovation board, and its share price broke on the fourth trading day of its listing.

"There is a lot of supply in the IPO market this year, especially after the implementation of the registration system on the gem, more new stocks are issued every month, and the IPO price is generally high. These phenomena are also the result of the market's self-regulation. If investors' enthusiasm for innovation declines and the stock fails to be issued, it will force the issue price to lower, and the quotation will go to the lower place. " Yang Delong, chief economist of Qianhai open source fund, told reporters.

Disputes over pricing rules

The fundamental reason why the fund raising is not as expected is that the change of market supply and demand forces the issue price to decrease, which is the role of market-oriented regulation mechanism.

However, some investment banks pointed out that "this result may be reasonable, but the process is unfair, and there are some places that should be adjusted in the system."

According to the provisions of the administrative measures for securities issuance and underwriting, "if the initial public offering adopts the method of inquiry, after the offline investors quote, the issuer and the lead underwriter shall exclude the part with the highest quotation in the total amount to be applied for, and the part to be removed shall not be less than 10% of the total amount of the total amount of subscription to be subscribed by all offline investors, and then the issue price shall be determined through negotiation according to the remaining quotation and the number of proposed subscription. The rejected part shall not participate in offline subscription. "

Wang Jiyue believes that the relationship between supply and demand of new shares has changed, and the IPO market has become a buyer's market. This rule in turn has become an important factor in suppressing the issue price and even colluding in offers: a few cents higher than the average market price may be included in the top 10% of the highest price range. "As a result, those who want to offer a high point are afraid to do so. Now there is a gap between the price and the issue price, which is meaningless."

"If we do not eliminate 10% of the volume, but stipulate that extreme quotations are excluded, then we can make independent quotations, and we can enlarge the effective quotation range, and change the situation that the existing quotation range is concentrated in the range of a few cents." Wang Jiyue said.

But is it necessary to make such adjustments? Many market participants have told reporters that this issue is very complex, I am afraid it is difficult to play a role through a single dimensional change of a policy.

According to a former senior regulator, "such an idea is still aimed at the success of the subscription. By quoting at the central level of market quotation, we can ensure that we can get new shares and get money. However, according to the market-oriented mechanism, new shares are not necessarily a matter of making money. You have to consider the risk yourself. Even if you win the new shares, you may not make money but lose money. In this way, institutional investors have to consider whether they really think the company is good or whether they just want to make money. "

Under the pricing mechanism of the registration system, I am afraid that people in the whole market should change their thinking.

Li Ding capital CEO Gao Fengyong told reporters, "small and traditional companies, the original secondary market value is given a higher shell price, but the off-line inquiry we will not simply on the valuation of the shell, the registration system environment shell will not be so valuable, entrepreneurs and investment banks should be aware of this."

"The registration system is a capital market nightmare for small and traditional enterprises. If it does not catch up with the first meal, it will often face the failure of issuing. Then the standards for investment banks to choose enterprises will be more and more big and innovative. The registration system is definitely not inclusive." Gao Fengyong said.

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