Nearly 70% Of IPO Companies Do Not Raise Enough Funds And Perfect The Inquiry Mechanism Of New Shares Is On The Way

On July 15, Zhengyuan Dixin, which plans to be listed on the science and technology innovation board, officially opened its inquiry work, attracting 10534 placing objects managed by 503 offline investors. However, according to the statistics of 21st century economic report, according to the preliminary inquiry and quotation information, 9923 placing objects without exception gave the declared price of 1.97 yuan / share, accounting for 94.19%. Such a high proportion and high concentration of inquiry results also made Zhengyuan Dixin's final pricing stop at 1.97 yuan / share.

The IPO price is currently "the second lowest" in the history of the science and technology innovation board, second only to Longteng optoelectronics, which is 1.22 yuan / share. It is worth noting that Longteng optoelectronics rose more than 700% on the first day of its listing, and the two-day increase was more than 10 times.

Several families are happy and others are worried. As the issuing price has been falling, it is difficult for enterprises to raise the funds needed for normal business development when they are listed on the stock market. This will undoubtedly have a negative impact on the development of enterprises, and will also affect the enthusiasm of enterprises to go public for financing. The ultra-low issue price is a feast for offline new institutions and individual investors. According to the data of a third-party research institution, if a single offline account participates in the offline placement of all new shares under the registration system from the beginning of the year to the present, and all of them are allocated, the total income will reach 14.4434 million yuan.

One end of the balance is tilting. Recently, the pricing and P / E ratio of new shares under the registration system have attracted great attention of the market. The 21st century economic report reporter learned from the regulatory authorities that the regulatory authorities have paid attention to the recent issue pricing of new shares. Optimizing the rules and strengthening the supervision will be the two major aspects that the regulatory authorities will focus on.

In fact, in 2021, the IPO price will go down all the way, resulting in nearly 70% of IPO companies' fund-raising gap. Visual China

How did the "second low" of the science and technology innovation board come into being

97 yuan / share, which has become the "Curse" in the inquiry process under the Zhengyuan Dixin network.

In fact, the inquiry under Zhengyuan Dixin network has attracted the attention of quite a number of investors. After excluding the invalid quotation and the highest quotation, the total amount of the remaining offer is 571933.5 million shares, and the overall subscription multiple is 4426.73 times. The specific inquiry results show that the company has received a total of 503 offline institutional investors' initial inquiry and quotation information of 10534 placing objects managed by offline institutional investors. After eliminating invalid quotations, the quotation range is 1.97 yuan / share - 28.12 yuan / share.

Although on the surface, from 1.97 yuan / share to 28.12 yuan / share, a very considerable range of inquiry has been opened, but among the 10 effective quotation prices declared by the institution, 9 prices are lower than 3 yuan / share. Among them, 9702 placing objects gave a unified declaration price of 1.97 yuan / share, accounting for 92.1% of the total.

"This year, when many enterprises went public to inquire about the price, more than 90% of the institutions gave the same price. In order to compete for the qualification of placing shares, we have to fight for two decimal places." For Zhengyuan Dixin network inquiry "centralized low price", there are senior investment banks in Beijing pointed out.

The issuance price of 1.97 yuan / share means that if Zhengyuan Dixin issues 17 million shares according to the IPO plan, it can raise 334.9 million yuan. After deducting the relevant issuance expenses, the net amount of funds actually raised in Zhengyuan Dixin is only 288218800 yuan, which only accounts for 55.95% of the capital to be raised in the IPO of the company.

Similarly, the issuing price of 1.97 yuan / share also locks the P / E ratio of Zhengyuan Dixin to 27.86 times, which is higher than the previous "red line" of 23 times of P / E ratio in the past, but the average static P / E ratio of the company's professional and technical service industry in recent one month, which is 33.9 times, is still low.

In fact, in 2021, the IPO price will go down all the way, resulting in nearly 70% of IPO companies' fund-raising gap. According to wind statistics, since 2021, a total of 207 enterprises have completed the price inquiry and pricing of new shares, of which 180 new shares are issued with a P / E ratio lower than the industry average p / E ratio at the time of issuance. The average static P / E ratio of Haoyuan pharmaceutical, which was listed in June, was 143.20 times of the industry in the past month, but the final price of the company was only 40.73 times.

In addition, of the 207 enterprises mentioned above, only 31 have achieved over raised funds, while the other 144 shares actually raised less than expected. For example, there is a gap of more than 1 billion yuan between the final raised funds of Shengyi electronics and Hehui optoelectronics, and the difference between the expected raised funds and the actual raised funds of China railway construction heavy industry is as high as 3.623 billion yuan.

The other side of the "frustration" of the listed companies is the carnival of new institutions and winning investors.

According to wind data, as of July 25, a total of 198 enterprises have been listed on the science and technology innovation board or the growth enterprise market in 2021, and all stocks have risen on the first day of listing. Among them, 154 enterprises have increased by more than 100% on the first day, and 18 stocks have increased by more than 500%, with an average increase of 246.32%. What's more, 187 of the 198 stocks listed above had a turnover rate of more than 50% on the first day of listing, with an average turnover rate of 71.06%.

Take the reader culture, which was recently issued at a "super low price" of 1.55 yuan per share, as an example, the company's one-day increase on the first day of listing reached 1942.58%, a record high since the pilot registration system. The average transaction price of the company on the first day of listing reached 23.44 yuan / share, 15 times higher than the issue price. The turnover rate on the first day of listing was 76.54%.

Why hold down the price

The fundamental reason behind why institutions "group" down prices is to create new risk-free returns. Because of the existence of risk-free returns, for inquiry institutions, the lower the issuance price is, the richer the follow-up returns will be.

According to the statistics of Niuniu Research Center, as of July 20, there are 191 new shares listed in the registration system in 2021. Without considering the different offline allotment proportions of class A, B and C investors, the average profit of a single offline account on the science and technology innovation board is 81100 yuan, and that of the gem is 102000 yuan.

Under the rich new income return, the number of offline subscription inquiry objects increased month by month. Since 2021, the average turnover rate on the first day of listing is 75.71%, and the average turnover rate on the fifth day is 210.44%. The growth enterprise market data is 66.47%, 230.33%.

"Recently, the low-priced issuance phenomenon of listed companies on the science and technology innovation board and the growth enterprise market makes it difficult to doubt that there are a large number of investment institutions colluding with the price when making inquiries offline. After enjoying the price advantage brought by low price issuance through off-line inquiry, most inquiry institutions sell their stocks intensively after listing, forming a stable profit chain of buying low and selling high. " This view is also accepted by the senior investment banks mentioned above.

In the interview process of 21st century economic report reporters, most institutions believe that "high proportion elimination", "four number restriction" and "pro rata allotment" are the main reasons for the "group" price reduction of the existing IPO pricing mechanism.

"Because the system requires that 10% of the highest quotation be removed, people do not dare to report when quoting. In the final analysis, what the institution is looking for is a chance to get a match, not to explore the value of the enterprise. In this case, it must be more important to find a pricing center to ensure the winning bid." There are buyers of institutional investors said.

There are also public funds in Beijing who told the 21st century economic report that on the one hand, "the price reduction of institutions" is out of their own interests. The lower the price, the more secure the income will be when they withdraw from the market; On the other hand, the market has the situation of "open bidding". In order to reduce the impact of price reduction as much as possible, some sponsor institutions will increase the quotation range within a certain range, which on the contrary makes the institutions more motivated to carry out "price reduction"“ At the end of the day, the price is always lower than the base price

In addition to the "high proportion exclusion" rule, according to the current provisions, the price of the new rules issued under the registration system shall not be higher than the median and weighted average of the effective quotation of offline investors after excluding the highest quotation, as well as securities investment funds and other partial equity asset management products established by public offering The quoted median and weighted average of national social security fund and basic endowment insurance fund are also known as "four number constraint" in the industry.

"The lower of the four numbers has the same effect as the elimination of high proportion, which aggravates the habitual downward pressure of institutions when quoting." The person in charge of the investment banking business of the above-mentioned small and medium-sized securities companies said.

"At present, the design of new share pricing system makes it impossible for issuers, lead underwriters and investors to compete equally." For the reason why there will be a large number of offline institutional investors huddle to lower prices, China Merchants Securities Investment Banking Committee said.

Two aspects of "shining sword"

"The better market performance on the first day of IPO is significantly in contrast to the continued low pricing level." Huatai Securities said that the cancellation of the five-day limit on the rise and fall of new shares on the science and technology innovation board and the growth enterprise market has greatly improved the efficiency of the return of new stock prices to rational value. However, there are still more obvious new stock speculation, which is in sharp contrast to the continuously declining new share pricing level. There is an obvious deviation between the primary market pricing and the secondary market normal valuation, which has a great negative impact on the listing enthusiasm of the enterprises to be listed.

On the other hand, some of the allocated inquiry institutions often choose short-term profit taking after listing, and the trend of institutional retail becomes more and more serious, which fails to play the value of long-term investors. Huatai Securities pointed out that the current registered IPO allows "6 + 1" type institutional investors to participate in offline inquiry and placement. The original intention is to give full play to the professional research ability of institutional investors and provide support for market-oriented valuation and pricing. It also hopes to improve the shareholder structure of listed companies and continuously support the development of enterprises by introducing institutional investors as long-term value investors. However, judging from the turnover rate of IPO enterprises under the current registration system, most of the offline investors choose short-term profit taking after listing in the process of pricing and issuing, and fail to play the role and value of long-term investors.

"Among the institutions that can participate in the placement under the registration system, in addition to the public funds, social security funds and insurance funds that need to be restricted for six months, the rest are lotteries, the locks drawn for six months, and the direct transactions that are not drawn. This has also given institutional investors the impetus to arbitrage quickly after price reduction. " Said the senior investment bank.

21st century business reporter learned from people close to the regulatory authorities that optimizing rules and strengthening supervision will be the two major aspects that regulators will focus on taking measures.

In terms of optimization rules, Huatai Securities suggests that the regulation of "excluding 10% of the highest quotation" should be removed, and the sponsor institution should be allowed to break through the potential restriction of "four numbers", and independently negotiate with the issuer to determine the issue price through sufficient market inquiry and on the basis of certain subscription multiple and pricing coverage.

In addition, Huatai Securities believes that in order to improve the status quo of price reduction of institutions, it is also necessary to gradually return the right of placement of new shares to the market.

"In the offline placement process, at present, the new share placement still adopts the mode of classified proportion allocation, that is, the same proportion of the same category of objects is allocated according to the proportion of their subscription amount. Under the background that the number of offline allotment objects is more than 10000, the amount allocated to a single object is very small, which reduces the enthusiasm of investors in price discovery." Huatai Securities believes that in the process of IPO pricing, investors who understand the value of the company should establish corresponding compensation and incentive mechanism, which can give more allotment than when the price is the same, and reduce the possibility of investors with professional pricing level concealing their actual views on the company.

As for the short-term profits of inquiry institutions after price reduction, Huatai Securities suggests that differentiated placement should be allowed according to the lock-in period of inquiry placing products, cultivate long-term investors, give the lead underwriters a certain degree of flexibility in placing, and even introduce the cornerstone investor system.

In terms of strengthening supervision, the Shanghai Stock Exchange has been "shining sword". On July 9, the Shanghai Stock Exchange made a decision to give supervision and warning to six institutions because the above-mentioned institutions violated the rules in the process of off-line inquiry. This is also the first time that the stock exchange has imposed punishment on the IPO offline inquiry. The above-mentioned six institutions have problems such as the risk of disclosure of key information such as price, lack of internal control procedures for quotation, and insufficient basis for pricing process.

Recently, the Shanghai Stock Exchange has further strengthened supervision and carried out special inspection actions for investors under the network of science and technology innovation board. According to the Shanghai Stock Exchange, this inspection initially found that some institutional investors had problems in varying degrees, such as imperfect internal control system and business operation process, nonstandard pricing decision-making mechanism, insufficient pricing basis to support the final quotation results, and improper preservation of working papers.

In view of the problems and violations initially found in this inspection, the Shanghai stock exchange requires relevant offline investors to timely standardize rectification, strictly abide by relevant laws and regulations, business rules and industry standards, and participate in the issuance of new shares on the science and technology innovation board in accordance with the law.

In the next step, the Shanghai Stock Exchange will optimize and improve the issuance and underwriting system, continue to strengthen the supervision and cooperation with the Securities Industry Association, strengthen the supervision and inspection of quotation institutions, strictly handle violations in accordance with regulations, and effectively maintain a good ecology of new stock issuance on the science and technology innovation board.