Our reporter Wu Xiaolu is a trainee reporter Mao Yirong
Every reform is a reshaping of the market ecology.
Recently, the reform of the stock issuance registration system has been fully implemented.
Experts interviewed believe that the reform of the comprehensive registration system will reshape the ecology of the A-share market.
The pricing of new stock issuance will be more market-oriented, the price difference between the primary and secondary markets will gradually narrow, and the characteristics of high-quality and high-priced enterprises will be further highlighted.
The comprehensive registration system will not lead to a surge in the number of IPOs, and it is expected that the market supply and demand will be relatively balanced.
IPO pricing is more market-oriented
The price difference between the primary and secondary markets will gradually narrow
On February 1, the China Securities Regulatory Commission publicly solicited opinions from the public on the main institutional rules for the full implementation of the stock issuance registration system.
The industry believes that after the full registration system, the pricing of new shares will be more market-oriented, the valuation differentiation of new shares in various sectors may be more obvious, and the price difference between the primary and secondary markets will gradually narrow.
The person in charge of Star Rock Investment told reporters that the positioning of different sectors determines the pricing of new shares in the sector, and the valuation differentiation of new shares may be more obvious.
It is expected that the valuation of new stocks on the Growth Enterprise Market and Science and Technology Innovation Board with stronger growth may be higher than that of the main board.
"It is expected that the price difference between the primary and secondary markets will be closer in the future, or there may even be no price difference, and Pre-IPO funds may disappear." A brokerage investment banker told reporters.
"The regulatory authorities do not make judgments on the investment value of companies, which makes the pricing of new shares more market-oriented. More factors need to be considered in pricing, especially for various special types of companies such as new track growth companies and differences in voting rights. Innovate on the basis of the traditional valuation model.” Chen Yunsen, a professor at the School of Accounting of the Central University of Finance and Economics and director of the Capital Market Supervision and Reform Research Center, told reporters.
The 2023 System Work Conference of the China Securities Regulatory Commission proposed that it is necessary to promote the scientific effectiveness of valuation and pricing.
Deeply grasp factors such as my country's industrial development characteristics, system and mechanism characteristics, and sustainable development capabilities of listed companies, and promote relevant parties to strengthen research and application of results, and gradually improve the valuation and pricing logic for different types of enterprises and the valuation system with Chinese characteristics , to better play the resource allocation function of the capital market.
In this regard, Shao Yu, chief economist of Orient Securities, told the "Securities Daily" reporter that the effectiveness of new share pricing requires the issuer's information disclosure to be clearer, and investors need to evaluate many factors such as the industry and the company's fundamentals.
Valuation is the result of the game between supply and demand in the market, in which investment banks play a scientific role in guiding the pricing of new shares.
"When valuing investment targets, it is necessary to consider various factors such as the characteristics of the enterprise itself, the industry in which it operates, the status quo of industry development, and the macro environment." The relevant person in charge of Star Stone Investment said that on the one hand, various industries play an important role in the national economy. The difference in status determines the valuation difference between industries; on the other hand, different companies have different positions in the industry and different development plans, and there may be valuation premiums or discounts.
In addition, even for the same investment target, different valuation indicators may need to be adopted in different periods of industry development and self-development. Selecting appropriate valuation indicators is an important step in improving the scientific nature of valuation and pricing.
The number of new shares will not surge
Market supply and demand will be relatively balanced
After the comprehensive registration system reform, whether the number of IPOs will surge has become the focus of market attention.
In this regard, the industry generally believes that there may be a growth trend, but there will be no surge, and the market supply and demand will be relatively balanced.
"Judging from the pilot registration system of the Science and Technology Innovation Board and the Growth Enterprise Market, the number of IPOs has not increased excessively due to the implementation of the registration system." The above-mentioned brokerage investment banker said that the regulatory authorities have strengthened IPO guidance, IPO on-site inspections, and compacted issuance. The primary responsibility for information disclosure of individuals, the "gatekeeper" responsibility of intermediary agencies, and strict "entry control".
The relevant person in charge of Star Rock Investment stated that the comprehensive registration system reform is to make it easier for more outstanding companies to obtain equity financing, and does not mean relaxing quality requirements.
It is expected that under the comprehensive registration system, IPOs on the main board are expected to speed up, and the supply of the stock market will expand in an orderly manner.
Chen Yunsen believes that the supply of IPOs is more likely to show a trend of steady growth and is unlikely to surge.
From the perspective of funds, the regulatory authorities have improved the delisting mechanism and given full play to the function of survival of the fittest in the capital market; continued to promote the entry of medium and long-term funds into the market, and buffered the impact of the secondary market through mechanism innovation.
However, after the comprehensive registration system reform, how to further coordinate investment and financing and balance the primary and secondary markets is still a long-term problem.
In this regard, the person in charge of Star Rock Investment believes that maintaining market stability is an important method to achieve investment and financing activities and a balance between the primary and secondary markets.
Considering factors such as market capacity and the quality of listed companies, we must strictly control, scientifically maintain the speed of IPO issuance, and actively promote reforms on the investment side, encourage and guide more medium and long-term funds to enter the market, and strengthen the guidance of stock market expectations.
It is also worth noting that this reform further improves the main board trading system, and new shares can be included in the target of margin financing and securities lending on the first day of listing.
"Margin financing and securities lending are available on the first day of listing of new shares, which is conducive to meeting investors' needs for financing and financing transactions, attracting more incremental funds to enter the market, and promoting the balance between supply and demand." Shao Yu believes that on the whole, the regulatory authorities still need to grasp the relationship between total supply and balance of needs.
The reporter learned from people close to the regulators that in the next step, the regulators will further promote the reform of the investment side, promote the development of personal pensions, and promote the increase in the proportion of long-term funds such as insurance funds and annuity funds entering the market.
The market system is further improved
Investor structure will be continuously optimized
After the reform of the comprehensive registration system, investors will face even greater challenges whether they are participating in IPOs or investing in the secondary market.
Market participants believe that the power of institutional investors will grow further in the future, and value investing will become the mainstream.
From the perspective of the primary market, “due to the comprehensive registration system, the price difference between the primary and secondary markets will gradually narrow or even disappear. Therefore, before launching a new one, investors need to do their homework on the company’s fundamentals and selectively select the targets for subscription. Pay attention to the price/performance ratio of the target.” said the relevant person in charge of Star Rock Investment.
Chen Yunsen said that under the registration system with information disclosure as the core, investors should carefully understand the relevant information and pricing methods of new shares, and should combine various factors such as the industry type of the target company, existing performance, growth prospects, corporate governance, etc. Pay attention to the inquiry information of the regulatory agency during the review and inquiry process to comprehensively evaluate the stock value.
From the perspective of the secondary market, the above-mentioned brokers and investment bankers believe that investment through professional institutions may be a future trend. Therefore, the process of institutionalization of the capital market will be further accelerated.
The person in charge of Star Rock Investment said that under the comprehensive registration system, investment requirements for research will gradually increase, high-quality companies may enjoy more valuation premiums, and the investment philosophy and investment strategies of stock market investors may gradually tend to value investing. This helps reduce irrational volatility.
Looking into the future, the industry generally believes that the degree of marketization of A shares will be further enhanced, the convenience of investment and financing will be further improved, the process of institutionalization will be accelerated, and the concept of value investment and long-term investment will become popular.
The construction of a valuation system with Chinese characteristics will better promote the function of market resource allocation and better serve the high-quality development of the economy.