Nearly 15% of new shares are issued this year. A shares are accelerating to catch up with Hong Kong stocks and US stocks?

　　Two new stocks were released today, and both opened and broke without any surprises.

　　On October 28, Chengda Biotech (688739.SH) dropped 18.2% at the opening, and the decline continued to expand to close at 80 yuan, a drop of 27.27%, which was a full 30 yuan/share drop from the issue price of 110 yuan/share.

Shareholders who hit the first sign to become a big creature lose 15,000 yuan per capita.

Investors who hit Zhongrongmei shares (301088.SZ) were also uncomfortable. The stock closed down 13.18% on the first day to 28.79 yuan per share, falling below 33.16 yuan per share and more than 15% of the issue price, with a single-day turnover of 646 million yuan. , The turnover rate is 41.79%.

　　The issue of new shares broke one after another, what went wrong?

　　The reporter combed and summarized from multiple angles and found that the A-shares that were listed on the market this year showed consistency in many aspects.

For example, it seems that it is difficult to return to the issue price of A-shares that have been listed for a break this year; for example, the initial P/E ratios (diluted) of multiple A-shares are significantly higher than the industry P/E ratio, and the performance growth rate has declined significantly.

　　From a micro perspective, new stocks in the primary market still have insufficient pricing information, which fails to reflect the unfavorable expectations of the company’s industry fundamentals. For example, some new stocks are dragged down by industry-wide losses, or are affected by the fundamentals of the company in the industry chain. Deteriorating, the stock price underperformed.

In addition, factors such as market liquidity and sentiment when new stocks are listed will also have a greater impact on the new stock market.

　　In addition to the above reasons, the promulgation of the "New Inquiry Regulations" hastened to break the myth that "new stocks must be earned".

The increase in the difficulty of opening new markets and the spread of the loss-making effect will inevitably affect some people's enthusiasm for opening new markets, and even cause some accounts to withdraw from opening new markets.

　　Perhaps the market is looking for a new ecological balance, which will take time.

Over 90% of new shares are still below the issue price

　　From shortly after listing, to individual stocks breaking on the first day of listing, and then to multiple stocks breaking on the first day of listing, there seems to be more and more bad news and the sluggish market sentiment is spreading.

　　According to statistics, 63 of the 408 A-shares listed this year have broken shares. Except for the two new shares listed today, 25 shares have broken shares by more than 20%. Among them, Darui Electronics, China Green Biotech and Sifang New Materials once broke. The issue exceeded 50%, and the lowest share price fell 55.35%, 56.33% and 54.13% from the issue price respectively.

　　Excluding the two stocks that broke today, the only other stocks that broke the issue are Benli Technology, Double Gun Technology, Allianz Ruishi, Tongfei Stock, and Liande Stock, whose stock prices have risen above the issue price, and these 5 stocks have been divided by the same price. Fei shares, the remaining four stocks have not increased by more than 7% from the issue price, in other words, they have not left the "dangerous zone".

The share prices of three stocks such as Darui Electronics and Hualv Biology are still hovering near the half price, and there is no improvement.

　　In other words, it is difficult for individual stocks that have fallen into the "quagmire" this year to get out of their predicament.

　　Looking at the industry again, it is divided according to the Shenwan industry. The individual stocks that broke out came from a total of 21 fields such as media, power equipment, automobiles, basic chemicals, and household appliances, involving many industries.

Among them, the most broken stocks are in construction and decoration, with a total of 10; basic chemicals are second with a total of 7; 6 computers, 5 biomedicine, 5 mechanical equipment, 4 electronics, and 4 automobiles.

　　In addition, among the stocks that broke, a total of 17 stocks had initial P/E ratios (diluted) significantly higher than the industry P/E ratios.

Take the individual stocks that broke this week as an example. Among the 8 stocks, 5 of the first IPO P/E ratios were higher than the industry P/E ratios.

Among them, the industry's first P/E ratio of Rongmei shares in Taoist women's clothing was 23.68, and the first P/E ratio was as high as 49.01, which is twice the industry P/E ratio.

Chengda Bio, which broke on the market on the same day, had an initial P/E ratio of 54.24, and a P/E ratio of only 38.11 in the industry at the time of the debut.

The same goes for Zhongke Weizhi, Huiyu Pharmaceutical, and Kaierda. The initial P/E ratios exceed 66.38%, 33.46%, and 59.7% respectively.

　　In addition, individual stocks that have broken shares also have greater commonalities in terms of performance growth.

According to the reporter's incomplete analysis, the net profit attributable to shareholders of the parent company of 29 broken stocks fell year-on-year in the third quarter of this year, and the net profit attributable to the parent company of 8 stocks fell by more than 50% year-on-year.

　　For example, in the first day of the first-day break of the stock, Zhongzi Technology, operating income in the first three quarters of this year was 740 million yuan, a year-on-year decrease of 63.75%; net profit attributable to the parent was 22.486 million yuan, a year-on-year decrease of 89.29%; non-net profit was deducted-3.5281 million yuan. A year-on-year decrease of 101.58%; basic earnings per share of 0.35 yuan, a year-on-year decrease of 90.0%.

At present, the stock price of China Self-Technology is only 75% of the issue price.

　　For another example, Hualv Biotechnology achieved operating income of approximately 140 million yuan in the first three quarters, a year-on-year increase of 9.2%.

The net profit attributable to shareholders of the listed company was approximately-4.17 million yuan, a year-on-year decrease of 113.62%.

Realized basic earnings per share -0.0358 yuan, a year-on-year decrease of 105.11%.

The company's share price is only 55% of the issue price, and the lowest share price has fallen to only 44%.

　　In addition to the above-mentioned individual stocks, the net profit attributable to the parent of Shennong Group, Dongrui, Garden, Shengyi Electronics, Yingjianke, etc. all dropped significantly year-on-year, respectively, 75.6%, 56.5%, 77.9%, 53.5%, 69.8%.

　　If you look at the long-term perspective, what commonalities are reflected in the IPO break?

Rehabilitation history can find that liquidity is also a catalyst for breaking the tide.

　　Since the opening of the A-share market in 1991, there have been seven rounds of IPO breaks, which occurred in June to August 2004, October 2007 to October 2008, January to February 2010 and May to July, 2011. From January to January 2012, from March to September 2012, and from February to October 2018, they all appeared when market sentiment was poor and liquidity tightened.

　　"Since October, due to the expected impact of market rectification quantitative funds and macro liquidity tightening, A-share trading volume has fallen from 1.5 trillion yuan to about 1 trillion yuan. The tightening of the liquidity margin has catalyzed the large-scale break of this round of new stocks. Yan Kaiwen, chief strategy analyst at Huaxin Securities, told reporters that the issuance of new shares is a reflection of the current stock market’s financing capacity and popularity. When the liquidity margin tightens, the issuance of new shares will also be under pressure.

Is the A-share market accelerating the transformation of Hong Kong stocks and US stocks?

　　There is nothing new under the sun, and breaks are not only today, nor are they unique to A-shares.

　　Take Hong Kong stocks as an example. Among the 159 new stocks newly listed in 2019, 94 were down stocks and 60 were up stocks. The overall increase in stocks accounted for 37.7%, and the break rate was as high as 59%.

Brokerage firms estimated that the first day, first week, and first month of the Hong Kong stock market had a closing break rate of approximately 40% to 50%, while the US market’s new shares had a closing rate of approximately 30% on the first day, week, and month. %~35%.

In the middle of this year, companies that went public in Hong Kong still had a break rate of more than 50%, which also confirmed the rationality of the forecast.

　　Many viewpoints believe that the break is a good thing, it is the return of the market to rationality, and it also reflects the "market-based pricing" under the requirements of the registration system.

So, is the A-share market accelerating the transformation of Hong Kong stocks and US stocks?

If so, can investors accept it?

　　In this regard, Yan Kaiwen believes that although A-share breaks are frequent, the market has not accelerated the trend of Hong Kong stocks and US stocks.

Because the "rules of the game" are different from the ecology.

　　"Most importantly, due to the lack of effective short-selling tools in the A-share market, market games often exist between longs. According to the theory of limited arbitrage, asset pricing power is in the hands of investors with the most optimistic margins. With the proportion of institutional investors holding shares The information content of A shares has steadily increased, but the valuation center is still much higher than that of Hong Kong and U.S. stocks."

　　Yan Kaiwen predicts that if the A-share trading rules remain unchanged, I expect the price difference between the two places may approach, but it will not disappear completely.

As an observation tool for the valuation spread between A-shares and Hong Kong stocks, the Hang Seng AH-share premium index is currently at a high level of around 150, indicating that A-shares currently have a 50% premium over Hong Kong stocks.

　　Dongtuo Investment Fund Manager Wang Chunxiu said that internationalization, marketization, and legalization are the reform directions of A-shares. With the promotion of policies, the improvement of investor structure, and the reform of issuance and trading rules, the ecological environment of A-shares is accelerating. Move closer to mature markets.

　　In Wang Chunxiu’s view, there have been multiple first-day breaks of new stocks in the past week. On the one hand, it is because the current market environment is not good. Except for the new energy sector represented by wind power, photovoltaics, and lithium power, other sectors have poor profitability. The mood is unprecedentedly low.

On the other hand, on September 18, the Shanghai Stock Exchange and the Shenzhen Stock Exchange successively issued revised implementation measures for stock issuance and underwriting. The newly issued "new price inquiry regulations" pushed up the price of new shares. Getting worse.

　　"But it is difficult to say that the break is a manifestation of the acceleration of Hong Kong stocks and US stocks in the A-share market, because the successive breaks of new shares this round are more of the result of the gradual effect of the market-based pricing mechanism under the registration system." General Manager of Huahui Chuangfu Investment Yuan Huaming also believes that with the improvement of the A-share market system and the strengthening of supervision, the advancement of domestic and foreign market interconnection, the continuous inflow of foreign capital and the strengthening of influence, the A-share market pricing system does have a long-term trend of shifting to relatively mature Hong Kong and U.S. stocks. .

　　"Of course, judging from the results of the break, it may help promote market participants to more professionally and rationally price and invest in new stocks. The pace of the A-share market moving closer to the mature capital market may be accelerated because of the break."

　　Yuan Huaming further stated that the IPOs are concentrated in companies listed on the Science and Technology Innovation Board and ChiNext, the issuance price-earnings ratio is higher than the industry average price-earnings ratio, and the three-quarter report data of listed companies is generally average.

The downward pressure on China's economy in the third quarter has increased, and the three quarterly reports that are being disclosed are generally lower than expected, adding to the cautious sentiment of the market in the near term.

Most of the companies on the ChiNext and Science and Technology Innovation Board that have recently broken their IPOs are priced at higher valuations when the market sentiment is optimistic around the beginning of October.

Investors changed from optimistic to cautious mood, and the myth that "new stocks are not defeated" was superimposed. Panic mood led to the emergence of successive breaks.

"New Inquiry Regulations" Make Dashing a Technical Activity

　　Hu Bo, the manager of the private equity platoon net fund, said that the main reason for the recent IPO break is that the current IPO inquiry mechanism has undergone major changes, and the entire rules are more beneficial to the issuer.

The previous inquiry rule was that the 10% part of the highest price would be removed, and the current revision was changed to 3%. Therefore, the game grouping phenomenon in the original IPO inquiry mechanism has been broken, making the entire IPO offer party motivated to go. Raise the issue price.

Therefore, overall, the IPO price has increased significantly compared with before, and it can also be seen that new stocks are frequently over-raised.

　　"However, after the entire issuance price has increased, it means that the valuation of the issuance has increased, and the price difference between the primary and secondary markets has also been significantly narrowed. For the market to have a fair value for this type of stock, when the issuance After the price rises, the entire gains from selling new shares will be significantly reduced. The recent break may be a very extreme phenomenon. In the future, there may still be a game process, through the game to reach a new inquiry balance." Hu Bo said. .

　　However, Hu Bo also said that the final price of the stock still depends on the fundamentals. Because of the breaks caused by the inquiry and market sentiment, it will return to the fundamentals after the release. If it is a stock with solid fundamentals, it will be adjusted to a certain range , There will still be new investment opportunities.

　　Yuan Huaming predicts that with the emergence of consecutive breaks of new shares, the P/E ratio of new shares issued on the Sci-tech Innovation Board and ChiNext is expected to decline.

The downturn in gains and increased risks in the A-share market will be a mid-to-long-term trend, and some funds and accounts will also withdraw from the new market. However, because the new stock break has just appeared, short-term market participants are more in a state of evaluation and wait-and-see.

A break in the issuance of new shares will lead to adjustments in the pricing of new shares issuance, and the income of PE and venture capital funds will be affected by this. These market participants will gradually adjust accordingly.

　　It is worth noting that whether the successive breaks are a manifestation of the market's true pricing function, or a manifestation of the imbalance of early pricing?

　　In this regard, Yan Kaiwen believes that the wave of break-ups is conducive to improving the market's previous IPO inquiry, which is "heavier on inquiry and less research", and is a sign of increased market effectiveness.

However, it can be seen that the "pendulum" has begun to fall since last year.

　　Historical data shows that since last year, the issuance of new shares has gradually diverged, and this situation has intensified this year.

The closing price of more than 200 new stocks five days after listing was lower than the closing price of the first day, and the funds for speculating sub-new stocks in the secondary market lacked a "profit-making effect".

After the enthusiasm of the secondary market has cooled, the center of superimposed new share issuance has moved up and the liquidity margin has tightened, the pendulum effect has led to a large-scale break in this round of new shares.

　　However, Yan Kaiwen does not believe that this week's extreme market will continue or even normalize.

"This week’s consecutive breaks are extreme." He said that after the pendulum effect falls behind, the market will find a new balance. Under the new game, the issue price will reach a relatively stable state at the new price, due to "information The primary and secondary market discounts caused by asymmetry will still exist.

(Author: Zhang Yuanke)