IPOs broke on the first day of listing for 5 consecutive days. New shares
cannot be “paid with eyes closed”. The industry recommends that investors rationally screen the underlying stocks
In the past, the new A-share market was a trick to make a profit without losing money, but recently, the new stocks have continuously changed their faces, making investors keen on new shares uneasy.
Since October 22, A-shares have been issued on the first day of listing for 5 consecutive trading days.
Phenomenon
Recently listed new shares
Small increase, large decrease, fast break
The IPO break has become a hot topic in the recent A-share market.
On October 28th, Chengda Biologics went public, dropped nearly 20% at the opening, and lost 10,000 in the first sign.
As of the close of the day, the company's stock price closed at 80 yuan, a drop of 27.27%, ranking first in the decline of individual stocks in the two cities.
Chengda Biotech has set a record for a loss on the first day of IPOs this year. Its issuance price per share is 110 yuan. Calculated based on the closing price, if it wins the first lottery, its loss will reach 15,000 yuan.
N Chengda (Chengda Bio) belongs to the medical manufacturing industry and is a biotechnology enterprise focusing on the research and development, production and sales of human vaccines. The company issued 41.65 million new shares at an issue price of RMB 110.00 per share and an issue price-earnings ratio of 54.24 times.
In terms of performance, the company achieved a year-on-year increase of 13.86% in operating income in the first half of the year; net profit attributable to shareholders of the parent company increased by 9.91% year-on-year, mainly due to the strong market demand for rabies vaccines and the rapid growth of revenue from rabies vaccine products.
According to a reporter from the Beijing Youth Daily, as of October 28, a total of 31 new stocks were listed in October, of which 10 were issued (counted at the closing price on October 27), with a break rate of nearly 30%.
There was a significant increase in the number of broken shares this week, with a total of 14 new stocks listed, of which 8 broke, and the break rate was as high as 57.14%.
According to market analysis, recently listed new stocks have shown characteristics such as small gains, large declines, and quick breaks.
Investors will focus on whether more new stocks will break the issue. For example, the most expensive new stock in history, Yiqiao Shenzhou, closed on October 28 and closed at 331.25 yuan, down 5.36%.
Its stock price has been adjusted back by 50% since its highest point. In the short-term, the stock price still has some room for downward adjustment.
The first new stock to break the issue was China Self Technology, which broke the issue on October 22 when it went public.
This is the first A-share to break on the first day of listing this year, and it is also the second single to break on the first day since the opening of the Sci-tech Innovation Board. The last time it was Jianlong Weiner, which was listed in December 2019.
As of the close on October 28, China Self Technology reported closing at 53.59 yuan, a drop of 8.53%, and there is still no sign of stabilization.
analyze
Changes in IPO rules
End of "Risk-Free Arbitrage"
How to treat the latest round of IPO breaks?
All parties have different opinions.
Some optimists say that new stocks frequently break or bottom out.
As the market adjusts and more stocks enter the value investment zone, the market is expected to enter the strategic bottom area.
Other analysts believe that the frequent breaks of new shares are related to the weakening of speculative confidence in funds on the market, and the habit of issuing new shares with high pricing, high bubbles, and high valuations.
Frequent breaks, it can only be said that the new stocks passed on to the asset bubble are difficult to be recognized, and the decline in stock prices has become a natural thing.
Therefore, there is no clear relationship between the IPO break and the bottoming of the market.
There is also a view that the reason for the rapid release of new shares is mainly due to the cancellation of the average price-earnings red line of the registration system reform, the high price-earnings ratio of some new shares, and the offline issuance of some new shares, which puts greater pressure on lifting the ban.
Huaxin Securities pointed out that by the end of September this year, the total size of domestic public offering funds reached 23.90 trillion yuan, becoming the core force of A-shares. However, since October the issuance of equity funds has fallen sharply from the previous month, and the total issuance of newly established funds has reached 46.764 billion. This is a drop of over 50% from the previous month.
Therefore, in the fourth quarter, whether it was macro liquidity or micro liquidity in the A-share market, it was not as loose as the market expected, especially in the year-end market, which was more dominated by trading opportunities.
Some professional media have voiced that the IPO break "more importantly reflects the results of the reform of the IPO inquiry system."
On September 18, the China Securities Regulatory Commission, the Shanghai and Shenzhen Stock Exchanges, and the Securities Association of China simultaneously issued a series of regulatory adjustment plans for issuance and underwriting under the registration system, and through improving the high price elimination ratio and canceling the pricing to break through the "lower of the four numbers". Measures such as delaying issuance requirements, strengthening the supervision of price inquiry and quotation behavior, promote balanced game between buyers and sellers, and improve the level of marketization of issuance pricing.
Zhongzi Technology, Corfu Medical, etc. all completed the inquiry after September 18.
Yingda Securities chief economist Li Daxiao wrote an article that the risk-free arbitrage game is over since the change in IPO rules.
In fact, only when retail investors can buy cheap enough stocks can they talk about wealth preservation.
Only by changing the unreasonable phenomenon of the continuous input of bubbles from the primary market to the secondary market can China's stock market truly have hope.
The break of new stocks also shows that the market has weakened or is returning to rationality. In particular, U.S. stocks are facing the risk of the biggest valuation bubble burst in a century. The impact of A-shares must be highly valued, and serious preparations must be made in advance to change from offensive to offensive. defense.
Suggest
No longer make 100% profit
Treat new stocks objectively and rationally
So what should investors do in the face of the winning lottery, which is no longer a stable profit without losing money?
Some senior investors said that the first thing to do is to break the "new stocks undefeated" mindset, study the fundamentals of new stocks and the market environment are still basic elements, and make true value judgments for new stocks.
When new shares are about to break, investors also need to reconsider their own margin of safety and carefully select and screen the underlying stocks.
Professionals believe that individual investors should treat new stocks more objectively and rationally, recognize the possible risks in them, and no longer "brainlessly" subscribe for new stocks, nor should they blindly speculate on new stocks.
Ordinary investors said that it is not necessarily 100% profitable to sell new shares, but new shares can still be sold.
You can’t pay with your eyes closed when hitting new stocks. You still have to study the company and have a general judgment.
If the IPO breaks and you are not sure about the company's future development, it should be discarded as soon as possible.
Text/Reporter Liu Shenliang Co-ordinated/Yu Meiying