The issuance of registered IPO slowed down and the price earnings ratio of issuance fell. Forced by the breaking tide, in May, there were some new changes in the A-share IPO market.
Although it has been more than half of May, as of May 18, only 13 A-share IPO companies with registration system have passed the meeting, 4 have registered, 11 companies have started the offering work, and only 2 new shares have been listed.
While the issuance slowed down, the P / E ratio of new share issuance in May fell significantly compared with April. Industry insiders believe that the decline in the P / E ratio of IPO is related to the industry in which the enterprise is located on the one hand, and it is also a normal reflection of market regulation on the other hand.
rhythm changed
In April this year, the breaking tide became stronger and stronger, and the pace of IPO also slowed down.
According to the incomplete statistics of China first finance, in March this year, 38 companies passed the meeting in the registration system audit link, and 27 companies passed the meeting in April. At present, it has been more than half in May, but only 13 companies have attended the meeting.
The data also shows that in the registration link, 37 companies were registered in March, including 21 GEM companies and 16 science and Innovation Board companies; In April, 13 companies were registered, including 9 companies on the science and innovation board and 4 companies on the gem; Up to now, only four companies have been registered, including three companies on the science and innovation board and one company on the gem.
In addition, in the aspect of issuance and underwriting, 43 registered IPO companies started offering in March and only 8 companies in April. So far, although 11 companies have started offering in May, which is warmer than that in April, it is still lower than that in March.
"The rhythm and pricing changes of A-share IPO are the result of changes in market valuation." Tian Lihui, President of the Institute of financial development of Nankai University, analyzed to China business and economics that due to covid-19 epidemic, Russia Ukraine conflict and the Federal Reserve's table contraction and other factors, A-Shares have performed poorly this year. Some companies delayed or withdrew their application for the meeting, so the issuance rhythm in may has decreased.
"The slowdown in the pace of listing is also due to the active slowdown of supervision". Wang Jiyue, a senior investment banker, said.
issue P / E ratio lower than industry
Shenwan Hongyuan Group Co.Ltd(000166) data show that in April this year, the average increase of registered new shares in Shanghai and Shenzhen markets on the first day was only 5%, of which the average increase of science and Innovation Board on the first day was - 11% and that of gem on the first day was 21%.
From the first day breaking situation, a total of 32 registered new shares were listed in April, and 17 new shares were broken on the first day, accounting for 53%, including 4 new shares on the gem and 13 new shares on the science and innovation board. In other words, one of every two newly listed companies has broken.
From the distribution of shenwanyi level industries, since 2022, the industries with the leading increase in the listing of new shares in Shanghai and Shenzhen markets include agriculture, forestry, animal husbandry and fishery, automobile and building decoration industries, while the average increase in non-ferrous metals, electronics and media is low, with 3%, 1% and - 15% respectively.
In terms of the issuing price, 14 of the 17 broken new shares have an issuing price of more than 30 yuan, with an average issuing price of 58 yuan; From the perspective of issuing P / E ratio, only the P / E ratio of Junxin shares is less than 30 times, and the P / E ratios of other (except unpublished) broken new shares are more than 30 times, with an average p / E ratio of 92 times.
This situation also changed in May. At present, among the two new shares listed under the registration system, the P / E ratio of C Prius is 48.75 times and the initial price is 46.80 yuan; The issuance price earnings ratio of n zhongkejiang is 24.36 times, and the initial price is 33.68 yuan. If you count three new shares listed on the main board and two new shares listed on the Beijing stock exchange, the average issuance price earnings ratio is only 25 times, and the average initial price is only 19 yuan.
In addition to the listed new shares, the issue price and P / E ratio of 10 new shares to be listed also show a downward trend. The data show that the average issue price of 10 new shares to be listed is only 27 yuan, the average issue P / E ratio is only 25 times, and the average Industry P / E ratio in the same period is 34 times. Among them, among the seven new shares to be listed and registered, only three have an issue price of more than 30 yuan, an average issue price of 34 yuan, an average issue price earnings ratio of 25 times, while the industry average price earnings ratio of 35 times in the same period.
"On the one hand, the decline in the issuance P / E ratio is related to the industry of new shares to be listed. At the same time, it is also a normal reflection of market regulation after the breaking tide in April." Wang Jiyue said.
"Under the market self-regulation mechanism, the downward valuation of the secondary market will reduce the issuance pricing of the primary market. In this way, under the background of the marketization of the registration system, the P / E ratio of new shares issued in May fell significantly." Tian Lihui also said that the decline in the price earnings ratio of new shares will also help the recovery of the secondary market.
valuation reduction is inevitable
The valuation pressure given by the secondary market to new shares has also been further transmitted to the primary market. Many new shares have been valuated upside down, especially in the two major industries of medicine and chip manufacturing, which have also deterred a group of investment institutions in the primary market.
For example, Shouyao holdings, which was listed on March 23, completed the third capital increase of 65 million yuan in September 2020. The new shares were subscribed by Jiaxing Lingqi and Chunlin investment. The corresponding capital increase price was 45.41 yuan / share and the post investment valuation was 5.065 billion yuan. At present, the market value is only 3 billion yuan and the share price is 20.36 yuan / share.
Mei Jian, partner of Dongfang Fuhai, said in an interview that high-quality targets are scarce resources.
"In the past, some institutions wanted to make quick money by taking advantage of the institutional dividends of the science and innovation board and the registered gem, and invested in some targets that were not cost-effective but could be listed quickly. However, the secondary market has its own valuation logic. The unreasonable valuation given by the primary market and not recognized by the secondary market have led to many upside down valuations in the primary and secondary markets." Mei Jian said, "good targets can still be listed, but for venture capital, the valuation must be lowered."
