The difference of 4 cents makes Xiangsheng medical become the first stock whose issuing price is lower than the lower limit of the range of investment report.
It is worth noting that Xiangsheng medical opened a huge price gap between the upper and lower limit of inquiry, with the inquiry range of 29.90 yuan to 58.36 yuan. Perhaps the price difference of nearly 30 yuan made Xiangsheng medical decide to take 4 cents lower than the investment report as the final price to show sincerity. However, from the first days trend, the four cents did not seem to let the market pay.
Does a four cent cut work?
According to the public information, Wuxi Xiangsheng Medical Technology Co., Ltd. (hereinafter referred to as Xiangsheng medical) is located in Wuxi City, Jiangsu Province. Its main business is the R & D, manufacturing and sales of ultrasound medical imaging equipment. Xiangsheng Medical Co., Ltd. issued 20 million shares in this public offering, accounting for 25% of the total share capital after the issuance. After the issuance, the total share capital of the company is 80 million shares, of which 18375812 shares are listed and traded today, with the issuance price of 50.53 yuan / share and the total amount of new shares raised of 1.011 billion yuan.
It is worth mentioning that in the previous report, the main underwriter recommended a price range of 50.57 yuan to 55.62 yuan per share, and the final price was 4 cents lower than the lowest limit of the range. As soon as the announcement caused an uproar, some people thought that the technology and innovation company had lowered its price for the first time over the range of the investment price, which was a market-oriented performance; others thought that the four cents was a show of price correction brought by the company to the market, which was too low.
From the data point of view, the number of institutions and products in this quotation has declined, and the price difference between the lowest price excluded and the issue price has also widened. There are 270 investors who have submitted effective offers in this offline offering, and 3074 allotment objects under management.
Data source: wind
In fact, 3876 institutional or individual investors participated in the quotation of Xiangsheng medical, including 412 securities companies, 2136 fund companies and 149 insurance companies. Among them, only individual investors (5), financial companies (4) and QFII institutions (4) give the lower limit of the initial price inquiry declaration within the range given by the securities companies.
The price difference between quotations during the inquiry period is the real advance reaction of the market. In terms of the pricing of listed new shares, the previous investors quotation relies more on the valuation range of the investment report, and there is no obvious valuation difference. For the first 25 listed companies, the average range of effective offer is 1.5 yuan. After entering October, the effective price range basically narrowed to within 0.1 yuan.
For example, the quotation range of medical inquiry institutions is 20.60 yuan to 26.05 yuan, with a small price difference. The price range of Xiangsheng medical is 29.90 yuan to 58.36 yuan. Statistics show that the declared price of 568 placing objects managed by 47 investors is lower than the issue price.
The lower limit of the initial inquiry price declared by the securities company is 30 yuan per share, the insurance company gives a price of 31.8 yuan per share, while other investors give a price of less than 30 yuan per share, 40.8% lower than the final price. In addition, in 4035 allotment objects, 304 allotment objects reported prices lower than 40 yuan.
From the stock price trend, Xiangsheng medical opened today at 52.4 yuan, up 1.87 yuan or 3.7% from the issue price of 50.53 yuan. After opening, the stock price fell to close to the issue price, and then rose slightly to a maximum of 54.5 yuan per share. As of the closing, Xiangsheng medical reported 51.56 yuan per share, up only 2.04% on the first day.
Why does the market not pay?
Maybe its because of the market downturn, but theres also a stock factor.
The price earnings ratio corresponding to the issuance price of Xiangsheng medical in 2018 is 42.52 times, which is higher than the average static price earnings ratio of the industry in the latest month, lower than the non pre static price earnings ratio of comparable company Mindray medical and lipang instruments (63.51 times and 43.38 times), and higher than the non pre static price earnings ratio of comparable company Kaili medical (34.37 times).
According to the issuance of the recommendation letter, the company has 19 major risks, including the failure of product research and development, technology leakage, the failure of R & D investment to generate benefits in time, the single product structure, trade friction, exchange rate fluctuations and so on.
In the aspect of whole body application ultrasound technology, due to a certain period from research and development to product application and product registration, the current R & D investment cannot generate economic benefits in the current period; in the aspect of artificial intelligence ultrasound technology, the relevant research of the issuer is ahead of the existing mature market, and the R & D investment in the relevant field cannot bring profit growth at the current stage.
In addition, the current product structure of the company is relatively simple, and the main revenue and profit come from ultrasound products and related technical services. If the market demand and supply of ultrasound medical equipment changes unfavorably, it may affect the future performance of the company.
At the same time, as the competent authorities are very strict in the identification of new products, the registration and regulatory regulations of various countries are also in the process of continuous adjustment, which does not exclude the possibility that individual products cannot be registered in time in the future
During the reporting period, the issuers ODM direct sales revenue was 5112900 yuan, 70901700 yuan, 75872900 yuan and 212300200 yuan respectively. Due to the fluctuation of the amount of technical service fee, the uncertainty of subsequent product procurement after the completion of technical development, the relatively small number of ODM customers, and the issuance of specific purchase orders were closely related to the product layout and market demand of ODM customers The ODM related technical service fee and product sales revenue are volatile.
Investment game and pressure of follow-up investment
On July 22, 2019, the average closing price of the first 25 scientific and technological innovation boards was 70.06 yuan, with an average increase of 140%. The highest increase was 400.15% of Anji Technology (688019. SH), and the lowest increase was Xinguang Optoelectronics (688011. SH), with a single day income of 84.22%.
The reporter combed and found that up to now, among the 58 companies that have been listed on the science and technology innovation board, there are 15 companies with an increase of more than 150% on the first day of listing, and the largest one is Anji technology, with an increase of 400.15% on the first day of listing, followed by micro core Biology (688321. SH), with an increase of 366.52% on the first day.
(data source: wind)
From the data comparison of the listing date, it can be found that most of the stocks with high growth are early listed stocks, and only Jinshan Office (688111. SH) has gained more than 150% on the first day of listing since November.
(data source: wind)
At the same time, most of the stocks with an increase of less than 50% on the first day of listing have been listed since November. Among the 13 stocks with an increase of less than 50% on the first day, only two stocks with an increase of less than 10% are jiuri new material (688199. SH) and Xiangsheng medical. Among them, Xiangsheng medical, listed today, rose the lowest on the first day, only 2.04%. And long day new material also appears on the market only two trading days later break.
In addition to the gradual decline in the first day of listing, nearly 30% of the 58 listed science and technology innovation board stocks have broken and are close to breaking. In addition to excellent Xinneng and jiuri Xincai, the first share of hyaluronic acid haohaishengke (688366. SH), among the first listed companies, rongbai Technology (688005. SH) and Tianzhun Technology (688003. SH) and jiepute (688025. SH) listed on October 31 successively broke through.
In order to increase the responsibility of the sponsor, the innovation system of follow-up investment is introduced into the sci-tech innovation board. For the securities companies, according to the recommendation and investment system set up by the science and technology innovation board, if the issuance price is on the high side, and it is broken after the follow-up investment, it means that the follow-up investment securities companies face the risk of loss.
Jiuri new material recommendation agency is China Merchants Securities, with 900000 shares subscribed and 60 million yuan subscribed. UBS group, the sponsor of haohaishengke, has invested 672400 shares with a follow-up amount of nearly 60 million yuan. Wind shows that the initial underwriting and recommendation fee of jiuri new materials is about 128 million yuan, and that of haohaishengke is about 46.45 million yuan.
All kinds of signs show that the degree of marketization of IPO inquiry is improved and the reform of marketization pricing mechanism is gradually effective. Taking Xiangsheng medical and more than one stock as an example, under the influence of weak performance and stock price breaking after the IPO, the offline institutions participation in the quotation of new shares is closer to the value of individual shares, the investment judgment gradually appears differentiation, the concentration of quotation is reduced, and the quotation of institutions is more independent, prudent and rational.
Li Xunlei, chief economist of Zhongtai securities, believes that the short-term break out of new shares is a normal phenomenon driven by the law of the new environment market. From the perspective of the healthy development of the capital market in the medium and long term, the reform of the market-oriented pricing mechanism will become increasingly perfect and reasonable. Chen long, an analyst at Zhongtai securities, also said that one of the reasons for the risk exposure was the obvious acceleration of the pace of issuance of science and technology innovation board and the weakening of risk preference in the stock market in the near future. However, the market-oriented value discovery function is also playing a role, and the plate is gradually returning to the normal state; the logic of overvalued premium of new stock investment is rationally returning under the market-oriented pricing.
Yang Delong, managing director and chief economist of Qianhai open source fund, the first financial reporter, said that it is a common phenomenon for new shares to break out in the European, American and Hong Kong markets. On the one hand, the increase of the breakout rate of the scientific and technological innovation board is related to the relatively depressed environment of the overall market, and the market-oriented pricing of the scientific and technological innovation board has fully reflected everyones expectation on it.
Coincidentally, Dong Dengxin, director of the Institute of Finance and securities of Wuhan University of science and technology, said in an interview with the media that the higher the degree of marketization of new share pricing, the higher the probability of breaking the first day of new share listing is. Recently, the proportion of breaking the first day of new share listing in Hong Kong market is about 15%, and that in the U.S. market is between 20% and 30%. With the pilot and promotion of the registration system in the science and technology innovation board, market-oriented new share issuance is becoming the norm, and the number of new shares breaking will remain at a certain proportion.
In addition, the scientific and technological innovation board follows the market-oriented pricing mechanism, and its off-line inquiry and the rise and fall of the secondary market have the seesaw effect. This is a market self-regulation, self-restraint mechanism, but also the key to the market-oriented distribution mechanism. With the emergence of the breakup of science and technology innovation board, there will be pressure on the issuer, the sponsor and the underwriter. The offline inquiry may be suppressed by the inquiry institution to force the offline inquiry center down, which is a process of market game.
Fu Lichun, director of Northeast Securities research, also pointed out in an interview that the pricing of science and technology innovation board may gradually mature at the beginning of next year. The first batch of listed enterprises are concentrated due to the large amount of capital, so the stock price fluctuates greatly, with considerable but not necessarily objective increase. As the science and technology innovation board matures, the capital becomes more and more scattered, and the breaking rate will become higher and higher. Fu Lichun believes that under the circumstances of legal rules, perfect environment and effective market, the fluctuation of stock price and the differentiation of different varieties are normal market phenomena, which need to be respected.
Yang Delong believes that under the background of the reform of the new share issuance system, it may also be a normal situation that there will be a break in the future, so investors should break the myth of new shares will not fail, and consider whether there will be a break in the new issue and whether there will be a loss of money, which is also a manifestation of the gradual marketization of a stock market.
Wang Delun, the strategy of Societe Generale Securities, said that the normalization of new share issuance is a market-oriented measure after the reform of the registration system. In 2019, the most important reform of the capital market, namely, the pilot registration system of science and technology innovation board, was officially launched. The most important thing of the registration system is to change the mode of issuing new shares under the auditing system in the past, and to issue new shares in a market-oriented way and principle, which includes the market-oriented way of pricing new shares, the market-oriented way of issuing new shares, the market-oriented way of information disclosure and so on. It is a common policy measure in the global stock market to adopt the registration system in the new share issuance system. Investors do not need to worry excessively and enlarge the influence brought by it.
Source: First Financial Editor: Guo Chenqi, nbj9931