CICC'S IPO Price Breaks Through The "Ceiling" And Some Institutions Offer Only 10 Cents

In the early morning of October 19, CICC issued A-share IPO announcement. The IPO price was set at 28.78 yuan per share, and the total amount of funds raised was expected to be 13.198 billion yuan.

What arouses the market's attention is that the price earnings ratio of this issue reaches 33.89 times, which once again breaks the hidden "ceiling" of 23 times PE's IPO pricing in the industry.

This is the second listed company to break the pricing ceiling after the Beijing Shanghai high-speed railway. In the view of the industry, this time or more represents the trend of the main board related issuance system to the registration system.

Although the price of CICC's return to A-share is higher than market expectation, there are still many controversies about the value.

According to the pricing information disclosed by CICC on the same day, not only did some investors give a price of 58.67 yuan per share, more than twice the final price, but also institutional investors gave the lowest offer of 0.1 yuan per share.

Following the Beijing Shanghai high-speed railway, CICC was the second listed company to break the price ceiling in the year. Visual China

The lowest price is only 10 cents

CICC's IPO inquiry started on October 14. According to the inquiry information data, as of 3:00 p.m. of the same day, CICC and its joint underwriters received preliminary inquiry and quotation information of 6901 placing objects managed by 2357 offline investors through the off-line subscription platform of Shanghai Stock Exchange. The price range of CICC's preliminary inquiry was astonishing, ranging from 0.1 yuan / share to 58.67 yuan / share, with the difference between the highest price and the lowest price A hundred times.

The bidder who offered a high price of 58.67 yuan / share came from a natural person named Liu Xiaoyan, who planned to apply for 2.5 million shares, while the investor who quoted the lowest price of 10 Mao / share was Changzhou communications construction investment and Development Co., Ltd. (hereinafter referred to as "Jiaojian investment"), and the number of shares to be purchased was also 2.5 million shares.

According to industrial and commercial data, Jiaojian investment was established on April 15, 1993. It is a wholly-owned investment enterprise of Changzhou Transportation Industry Group Co., Ltd., and Changzhou Municipal People's government is the actual controller of Changzhou transportation industry group.

Obviously, under the present quotation system, giving 0.1 yuan / share price is no different from giving up the subscription.

"I don't know whether it's a vent that the institution is extremely unlikely to win a bid, or an extreme performance that is not optimistic about CICC. Of course, it may also be that as an urban investment enterprise, it is not interested in the field of CICC." An institutional person who also participated in CICC's IPO quotation admitted that it was difficult to understand the mentality of CCCC's investment quotation. RMB 0.1 is not only far below the par value of the stock, but also will eventually become invalid and be eliminated.

Although CCCI expressed its attitude in CICC's IPO at a very low price, this does not prevent CICC's IPO from becoming a new feast for investors in the secondary market.

According to the issuance announcement of CICC, the upper limit of its IPO online subscription will reach 96000 shares. According to the data calculation, the winning lot rate of its online investment is expected to reach more than 0.1%.

Zhongjin Huia breaks the shackles

In the past few years, it has become a "silent" rule that the price to earnings ratio of IPOs under the approval system is set at less than 23 times.

"But before 2014, there was no such hidden ceiling, and the P / E ratio of some new shares could be much higher, but at the same time, there were many breakouts in the market." Shen Wan Hongyuan new stock strategy chief analyst Lin Jin said.

Before 2014, new shares with a P / E ratio of more than 23 were everywhere. From 2014 to 2020, there are only 11 stocks with a P / E ratio of more than 23 times on the main board. And hundreds of shares issued at the top of the price earnings ratio in 22.99 times.

An invisible pricing ceiling is above.

"This is related to some chaos in the process of IPO pricing after the resumption of IPO in early 2014. Since then, the CSRC suspended IPO approval in late January and resumed in June. From the IPO statistics, we can see that the P / E ratio of many new shares issued in January 2014 exceeded 30 times. After the resumption in June, only a few companies issued a P / E ratio of more than 23 times, and the remaining companies did not exceed 23 times. " Lin Jin said.

On January 12, 2014, the China Securities Regulatory Commission (CSRC) issued the measures on strengthening the supervision of new stock issuance, which specified that the issuer should determine its industry according to the guidance on industry classification of listed companies, and selected the static average p / E ratio of the latest month issued by China Securities Index Co., Ltd. as the reference basis. If the P / E ratio of the new shares is higher than the industry average, the issuer shall supplement the risks in the prospectus and the issuance announcement.

"In addition, the high IPO price brought about the breaking of listing and crazy cash out, and the capital market began to price disorderly. A combination of many factors led to the SFC's decision in January to suspend the issuance of new shares. " Said the investment bank practitioners.

Half a year later, the regulation restarted the issuance of new shares. Matching with the restart, there are a series of new stock issuance system reform.

"This includes the provisions on pricing, that is, when the P / E ratio of new shares is higher than the static average value of China Securities Index industry in recent one month, relevant risk announcements need to be issued for three consecutive weeks, that is, the issuance needs to be postponed for three weeks. The postponement may increase the uncertainty of listing to a certain extent. From the result, the proportion of issuers choosing to postpone is not large." Lin Jin said that the hidden red line of "23 times PE" also appeared in that period.

At that time, there were not enough game pricing in the market, and there were advantages and disadvantages in limiting pricing and valuation.

"This hidden red line is" one size fits all. ". Although the market was stabilized against the background at that time, the valuation of many enterprises was not fully reflected in the primary market, which resulted in a wide gap between the secondary market and the primary issuance market, resulting in a huge arbitrage space and the birth of a "stable profit and no loss" fund. " Said the investment bank.

This hidden red line has been drawn for six years.

Until the successful launch of the science and technology innovation board in 2019, the "hidden rule" that the issuing price of listed enterprises on the science and technology innovation board is not more than 23 times of the issuing price earnings ratio has been clearly broken.

After the implementation of the registration system, the gem also began to break this red line.

On the main board, the current registration system has not been put on the agenda, but the two giant companies, represented by Beijing Shanghai high speed railway and CICC, have broken the red line of pricing, and "Xiaohe has shown its sharp corner".

From 2015 to 2020, only 11 companies with IPO P / E ratio more than 23 times were listed on the main board. Except for Beijing Shanghai high speed railway and CICC, the other companies have high P / E ratio, but it is mainly caused by another rule of IPO: the issuing price should not be lower than the net assets per share before the issuance, and the lowest issuing price leads to a higher P / E ratio.

By 2020, with the continuous promotion of capital market reform, the two IPO projects of Beijing Shanghai high speed railway and CICC have obviously broken the price earnings ratio ceiling.

In January 2020, the issuing P / E ratio of Beijing Shanghai high-speed railway is only a small and slight breakthrough to the hidden ceiling.

In October, CICC decided to issue the stock, with a price earnings ratio of 33.89 times, which is obviously market-oriented.

At present, under the background of the main board approval system, Beijing Shanghai high-speed railway and CICC have launched market-oriented issuance of two super large stocks with a capital of more than 10 billion yuan. However, many capital market participants believe that the market-oriented issuance of the main board in the future is expected.

According to the above-mentioned investment banks, the registration system will be fully liberalized next year, and the whole path may be "science and technology innovation board - Gem - small and medium-sized board - main board". This year, the gem will carry out stock registration system reform, and next year, it will not be ruled out that the SME board and the main board will promote together.

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