Recently, the frequent breaking of new shares has aroused the attention and discussion of the market.
According to the statistics of the reporter of the securities times, among the 96 new shares listed on the A-share market this year (excluding the shares of the Beijing stock exchange, the same below), 33 shares have broken on the first day of listing, with a breaking ratio of more than 1 / 3. The breaking situation has further intensified since April. Among the 17 new shares not listed on the Beijing stock exchange, 11 have broken on the first day, with a breaking ratio of more than 60%. This is very rare in recent years.
This round of “breaking tide” of new shares not only made many innovators lose money, but also triggered a large number of investors to abandon their purchases. In addition, the underwriting brokerage institutions are also facing great pressure.
However, for the current burst of new shares, market participants generally believe that it needs to be treated rationally. In an interview with reporters, Wu LiangQun, executive director of qianhaidingye Investment Development Co., Ltd., a private placement institution in Shenzhen, said that there are many reasons for the concentrated occurrence of this round of new share breaks: first, with the further promotion of the registration system, the supply of new shares has gradually increased, and the competition in the market has also begun to intensify; Second, the overall market performance has been poor recently, and investors have a strong wait-and-see mood; Third, the epidemic situation superimposed on the external war situation, affecting market expectations; Fourth, the P / E ratio of these new shares is generally high. Under the complex economic situation, the market lacks confidence in the subsequent growth of enterprises.
“Now that the pricing power is handed over to the market, there will inevitably be a painful period of market self-regulation, and new shares will also experience a process of valuation dynamic balance.” Wu LiangQun believes that this is precisely the performance of A-Shares in line with the international market. In the long run, there is no need to be pessimistic.
new shares with high P / E ratio become “hardest hit”
The frequent breaking of new shares has become an unavoidable topic in the recent A-share market.
The current wave of new shares broke out roughly in the fourth quarter of last year. At that time, the reform of the new inquiry system was implemented, which accelerated the marketization process of IPO pricing. The myth of “unbeaten new shares” that lasted for many years was gradually broken. Since then, the phenomenon of new shares breaking out has become more and more common.
Securities Times reporter combing found that this round of new shares have some obvious characteristics. On the one hand, from the composition of broken new shares, there is obvious structural differentiation in the phenomenon of broken new shares. There are 22 and 11 stocks on the scientific innovation board and gem respectively, and no new shares on the main board appear.
From the perspective of issuance valuation, among the above 33 broken new shares, the P / E ratio of 20 new shares is higher than the average p / E ratio of the industry disclosed in the prospectus, and another 11 new shares belong to unprofitable enterprise shares, indicating that investors are relatively cautious about overvalued issuance and unprofitable Enterprises. It still needs time to verify whether the current pricing and valuation of relevant enterprises can match the business prospects and profits of enterprises in the future.
From the perspective of industry distribution, if divided by CITIC’s primary industry, there are as many as 10 new shares in the electronic industry, followed by 7 in the pharmaceutical industry. There are also many mechanical and computer industries.
On the other hand, many new shares were broken by a large margin. Statistics show that the lowest price of five new shares on the first day of listing, including vijiechuangxin-u, Aojie technology-u, Puyuan jingdian-u, Maiwei biology-u and Haichuang pharmaceutical-u, decreased by more than 30% compared with the issue price.
In fact, the breaking tide of new shares did not appear in the A-share market for the first time. The latest wave of large-scale breaking in the A-share market occurred in 2012. According to the listing date, more than 150 new shares were listed that year, about 50 new shares were broken on the first day, and the proportion of broken new shares was close to 1 / 3 However, since the restart of IPO in 2014, few new shares have broken on the first day of listing, which continues to the fourth quarter of 2021.
Wang Jiyue, a senior market person, believes that every wave of breaking tide in the past was finally self-regulated by the market, and this time is no exception. From the perspective of mature market performance, it is normal for new shares to earn and lose. On the contrary, it is rare for new shares to earn without losing before a shares.
securities firms forced to become major shareholders in underwriting
“We are no longer involved in innovation. It has become a venture capital and needs more time to study new shares.” A private placement agency in Shenzhen told the securities times. With the weakening of the new share market, the yield of new shares has decreased and even broken frequently, and the new ecology is also changing.
One of the changes is that the participation of new investors has decreased sharply. According to the reporter’s combing, there were more than 6.2 million new investors in the peak period of the science and innovation board, but the number of new investors in the science and innovation board has directly decreased to 3.2 million recently. The number of new investors participating in the gem is also significantly decreasing. According to the reporter’s statistics, in the early stage of the implementation of the registration system on the gem, the number of investors applying for new shares on the gem exceeded 13 million. With the increase in the number of investors opening the authority of the gem, 15.5 million investors participated in the peak period of new investors on the gem. Recently, affected by multiple factors, the number of new investors has decreased sharply to about 9 million at present.
The second change is that the number of offline institutions participating in inquiry and placement has decreased significantly. With the rise of the market of science and innovation board, there are more than 500 offline inquiry institutions for new shares of science and innovation board in mid-2021. But recently, with the weakening of the new share market, the number of offline institutions participating in quotation has decreased. For example, according to the data previously disclosed by Haichuang pharmaceutical, there are only 181 preliminary inquiry institutions. After excluding the invalid quotation, the number of investors with the final effective quotation is 101.
With the decrease of inquiry institutions, the number of offline institutions participating in placement also shows a downward trend. Haichuang pharmaceutical has 1908 effective subscription and placement offline, which is at a low level in recent years. In the middle of 2021, the number of offline effective placing institutions has exceeded 10000 for many times. A similar situation occurred on the gem. According to the data recently disclosed by Guoneng Rixin, 308 institutions participated in the inquiry, but the final number of investors with effective quotation was only 168.
However, the reporter of the Securities Times noted that for many companies with better fundamentals, there are still many offline inquiry and placement institutions, which also reflects that institutions prefer enterprises with better fundamentals in the selection of new share placement.
The third change is that due to the increasing number of investors abandoning the purchase, securities companies are facing greater pressure on underwriting investors to abandon the purchase of shares. Recently, the number of new shares of wechat on the science and innovation board that online investors have abandoned to subscribe for has reached 3381500, and the amount of abandonment has reached 778 million yuan, which are underwritten by the underwriter Everbright Securities Company Limited(601788) alone. In addition, Everbright Securities Company Limited(601788) subsidiary Everbright fuzun Investment Co., Ltd. also participated in the issuance of strategic placement, with a follow-up investment of 505300 shares, with a follow-up investment amount of 116 million yuan. In other words, Everbright Securities Company Limited(601788) underwritten and co invested shares totaled 3.8868 million shares. According to the data of the top ten shareholders released by NSW, Everbright Securities Company Limited(601788) holds slightly more shares than the fifth largest shareholder of the company.
“The increase of IPO abandonment rate not only allows securities companies to face the pressure, but also requires securities companies to explore the real reasons behind it and improve the current situation.” The relevant person in charge of Sinolink Securities Co.Ltd(600109) investment banks said that securities investment banks should strictly control the quality control port and recommend high-quality listed companies with excellent quality and business to be listed; Secondly, we should maintain sufficient research and prudence in the pricing of new shares. In addition, in addition to investment banking, securities companies should also pay enough attention to how to do a good job in investor education and strengthen investor service in brokerage business, and how to combine Investor Service with the requirements of investor education concept under the registration system.
forced investment banks to make accurate pricing
When new shares break, securities companies may encounter “floating losses” in the short term. According to the data, as of April 19, securities companies participated in the follow-up investment of 40 new shares on the science and innovation board during the year, of which 26 are currently in a state of floating losses. For example, Haitong innovation, the follow-up investment institution of Aojie technology-u, has a floating loss of 814347 million yuan.
Nevertheless, the market still generally believes that these phenomena are the embodiment of the strengthening of market-oriented game after the reform of new share inquiry system.
The aforementioned person in charge of Sinolink Securities Co.Ltd(600109) investment bank said that the fully market-oriented inquiry mechanism for new shares is bound to lead to a dynamic game between investors in terms of high price Bo shortlisted and breaking losses after listing. This phenomenon is more obvious in the stage when new investors pay more attention to new short-term returns. In some mature overseas capital markets, there will be similar cyclical fluctuations in the inquiry and pricing of new shares. “Generally speaking, the market mechanism is playing a role.” The relevant person in charge of a large brokerage investment bank said.
The frequent breaking and abandonment of purchases also put forward higher requirements for the exhibition ability of securities companies and investment banks.
Wu Kaida, chief strategic analyst of Debang securities, believes that under the requirements of “market-oriented pricing” of the registration system and the rational return of the income of new shares, investment banks, as professional financial intermediaries, should give full play to their industry resources and research ability to help investors better judge the real value of new shares and determine a reasonable issue price, so as to take into account the financing needs of issuers and investors’ pursuit of income.
With the increasing pressure of follow-up investment and underwriting, some market views believe that securities investment banks should increase the cost of recommendation and underwriting to ensure the safety of their business. “At present, the IPO market is still more than enough, and some securities companies are not competitive. In fact, they do not have the ability to raise prices. Some large securities companies have stronger risk response ability, and do not need to raise prices to deal with the increase of short-term abandonment.” “At present, it is more feasible for securities companies to appropriately avoid risks through accurate pricing,” said an investment banker at a securities firm in Shanghai
