On April 17, wechat disclosed the results of its initial public offering and listing on the science and innovation board. The announcement shows that the number of shares issued this time is 25.266 million, and online investors give up the subscription of 3.3815 million shares. The number of shares abandoned accounts for 13.38% of the total scale of this issuance, and the amount of shares abandoned is 778 million yuan.
This means that retail investors who have won the lottery online, accounting for nearly 40% of the total online issuance, choose to abandon the purchase; The amount of abandonment also exceeded the amount of 756 million yuan when China Mobile returned to a for listing at the end of December last year – this event, dubbed “retail investors abandoning their purchases together”, set a “new record” in the history of a shares.
Judging from some voices in the market after the announcement was issued, the small and medium-sized investors participating in online subscription are inconsistent with the cognition of institutional investors, underwriters and even Issuers on the company value, which is the direct reason for the abandonment there is a view that institutional investors and lead underwriters seem to be interested in high pricing and overvaluation of new shares.
Wang Jiyue, a senior investment banker, told scidev.net daily that the new share market had turned into a buyer’s market shortly after the registration system began. “Even under the new rules of inquiry, it is still priced by the buyer. In the inquiry stage, the Underwriters basically have no ability to raise the issue price.”. However, for offline investment institutions, their pricing is basically based on their own judgment. Few institutions deliberately quote high prices, and the current inquiry mechanism will eliminate abnormal prices.
Bu Rixin, partner of chuangdao consulting, said that whether the pricing is high or the breaking is frequent, it shows that the market mechanism is working. “With the frequent breaking, both offline subscription institutions and online retail investors will gradually become rational”.
▍ the market questioned the rationality of the pricing and market value of nano chip micro
The issuing price of 230 yuan / share of nano core micro makes the company not only the sixth highest in the history of A-share IPO, but also the highest in the semiconductor industry. Considering the scale of this share issuance, the capital raised is expected to be 5.811 billion yuan, which is still 4.831 billion yuan higher than the original plan after deducting the issuance expenses, and the over raised capital is 6.44 times.
Bu Rixin said in an interview with the reporter of the science and Innovation Board daily that the high pricing is actually the result of the joint action of the lead underwriter and offline subscription institutions. Through guidance, publicity, roadshows and other means, the offline subscription institutions hold the mentality of grabbing chips and gambling hot spots, which improves the expectation of the whole market for individual stocks
The reporter of the science and Innovation Board daily noted that the high issuance pricing and large-scale over raised funds of the nano core micro made the market begin to question the fairness of the issuance pricing and the rationality of the company’s market value.
in terms of the company’s valuation, nano chip micro corresponds to 107.48 times of the estimated P / E ratio in 2021, which is higher than that of semiconductor companies that have disclosed the financial report of 2021, such as 95.88 times of 3Peak Incorporated(688536) 96.26 times of Leaguer (Shenzhen) Microelectronics Corp(688589) and 85.52 times of Shanghai Fudan Microelectronics Group Co.Ltd(688385) . However, the other side of overvaluation is high growth. Nano chip micro products are based on chip design in information and communication, industrial control, automotive electronics and consumer electronics markets. In 2019, the company’s non net profit attributable to the parent company was only 6.7081 million yuan. After starting to develop the communication market and the field of new energy vehicles in the past two years, the same data rapidly grew to 404928 million yuan in 2020 and 875507 million yuan in the first half of 2021.
in terms of new share pricing, the reporter of the science and Innovation Board daily noted that after the introduction of the new inquiry regulations last year, under the joint action of various factors, the stock pricing center of the listed companies on the science and innovation board has increased significantly compared with the past, which has correspondingly raised the overall valuation of the company, forming a seemingly abnormal situation of large-scale over raised funds, etc.
It is understood that the new regulations on inquiry adjusted the elimination proportion of the maximum quotation from “no less than 10% of the total amount of proposed subscription by all offline investors” to “no more than 3% and no less than 1%”, and cancelled the requirement of delaying the issuance when the pricing broke through the “lower of the four values”, which was originally intended to crack down on the behavior of “holding together and holding down the price” of offline institutions China International Capital Corporation Limited(601995) previous research report shows that after the implementation of the new regulations, the effect is obvious, the overall quotation concentration is significantly alleviated, the quotation game is enhanced, and the number of effective prices has increased significantly from single digits to more than 100, close to 200 in December 2021.
“For the issuance of new shares on the science and innovation board, the pricing restrictions have been removed, making the issuance price close to the market recognized price. However, this price belongs to the recognized price of the primary market, which is not equal to the recognized price of the secondary market. There will be expected deviation between the two for the same company, so it leads to frequent breaking of new shares on the first day of listing.” Bu Rixin said that whether the pricing is high or the breaking is frequent, it shows that the market mechanism is working.
In terms of pricing in the primary market, compared with before the implementation of the new regulations, the number of high price elimination is relatively reduced, which logically means that offline investment institutions may have the motivation to quote high prices, so as to avoid being eliminated by “low price is not shortlisted” and obtain placement.
Taking the inquiry process of nano core micro as an example, its lead underwriter received the preliminary inquiry and quotation information of 5934 placing objects managed by 254 offline investors, of which 99 placing objects were excluded due to high prices; In contrast, a total of 1545 placing objects managed by 94 investors were not shortlisted due to low bids.
▍ there are large institutions under the network, which is the lower of the four numbers
Wang Jiyue, a senior investment banker, believes that the phenomenon that the number of high prices is less than that of low prices is determined by their own rules, and in terms of the total amount, the quotation institutions and the number of quotations of most companies above the issue price have been less than those below the issue price since the new rules.
“Shortly after the price holding mechanism of new shares was formed, the buyer’s price holding behavior was still very loose. However, after the registration of new shares, there were some loopholes in the market.” The inquiry rule is to eliminate the unreasonable pricing of very few buyers.
However, the current inquiry rules will not completely exclude some large institutions from raising the upper limit of the quotation range. “Because the number of offline subscriptions may exceed 1% at a time, which means that if the quotation of this institution is very high, only a part will be eliminated, and the high price can still be shortlisted normally, which will raise the median and weighted average.”.
The reporter of science and technology innovation board daily noted that in the case of high price elimination of nano core micro, all placing objects with the proposed purchase price higher than 346.33 yuan / share (excluding 346.33 yuan / share) were eliminated; Among the placing objects with a proposed subscription price of 346.33 yuan / share, all placing objects with a subscription quantity of less than 2.8 million shares are eliminated.
specifically, in the inquiry process of new shares of SMIC, it was several placing objects managed by Huaxia Fund Management Co., Ltd. that priced the high price of 346.33 yuan / share issued by SMIC, which eventually raised the important pricing reference standard of the lower of the four.
for the Underwriters after entering the inquiry procedure, “they basically have no ability to raise the issue price”. Wang Jiyue said that in terms of the final pricing of nano core micro, “it is about 10% lower than the lower limit of the four number range, which shows that the Underwriters and issuers have made sincere measures to a certain extent”
Therefore, Wang Jiyue suggested that in view of such situations, the elimination of high prices in the future can indeed make appropriate adjustments to the actual problems after the new regulations last year. “For example, we can eliminate the current highest 1% and adjust it to eliminate the quotation that exceeds the median quotation of all institutions by 30% or more than 50%. In this way, we can eliminate the high price quoted by some irresponsible institutions mentioned above, so as to better reflect the overall quotation situation of the market.”
▍ retail investors’ enthusiasm to hit a new low in the year
under the new rules of inquiry, high pricing, over raising and breaking not only affect the decision-making of online investors to abandon their purchase after subscription, but also affect the enthusiasm of retail investors to innovate according to xingkuang data
only from the number of new shares effectively subscribed since the beginning of this year, the data range in January is between 5165800 and 5648900; In April, the range of effective households for the subscription of six new shares fell to 4.2353 million to 4.5181 million. Among them, there were 3.7362 million effective subscription households of NSM, setting the lowest record for the subscription of new shares on the Kechuang board this year
“In the past, it was a matter of historical experience to make money. If you earn more, there will be more people to make money.” Wang Jiyue said so. It is understood that because the winning rate is low and payment is required only after winning the lot, many securities companies’ trading software even directly set up the automatic new function for online investors. “After the inquiry of the new regulations, there are more breaking phenomena, and many investors will hesitate after winning the lot. Especially for high-priced stocks, if the absolute amount of breaking loss is greater after winning the lot, it is normal to go back.”
With regard to the large-scale abandonment of the purchase of nano core micro new shares, Wang Jiyue believes that the subscription rate of online issuance is less than 70%, which actually means that online investors do not recognize the stock. So will this lead to the suspension of issuance? In this regard, Wang Jiyue pointed out, “the current rule is to suspend the issuance only when the overall subscription rate is less than 70% of the total issuance amount. This situation is almost impossible when offline subscription still accounts for a large proportion.”
