China's a-share IPO pricing system research
 
CHAPTER1 introduction
 
This chapter first introduces the research background and purpose, and then (IPO) for the IPO pricing mechanism, a brief introduction to the operation mode of IPO in our country at present. Finally, the paper expounds the book research questions, research train of thought and structure arrangement.
 
1.1 research background and purpose
 
1.1.1 research background
 
Under the background of our stock is in transition economy, at the beginning of 1990 to the reform of state-owned enterprises to raise funds for the purpose of cases. After more than 20 years of development, several changes in the system for issuing new shares, but on the whole is made up of the development direction of administrative pricing to market pricing. On the whole, can be roughly divided into two stages: one is administrative pricing stage; Second, the gradual transition to a market stage.
 
Administrative pricing stage (1992-1992). In October 1992, the establishment of the state council securities commission and the China securities regulatory commission marks the centralized and unified management of the regulatory system in China has gradually formed. At this stage, China has tried to draw. Full payment in advance, pricing and surfing the Internet for online (trial) only 4 stocks issued four ways.
 
Compared with other countries in most countries, China's pricing with obvious administrative color, is by the China securities regulatory commission according to "ipo = net income per share * p/e ratio" unified pricing the fixed formula, and issue the p/e ratio and earnings is adopted by the designated by the CSRC. Under this kind of pricing, distribution companies and underwriters could not be determined according to the circumstance of market price, this makes the issue of the assets of the company may suffer from losses.#p#分頁標題#e#
 
A gradual transition to a market stage (1999 - present). On December 31, 1998, the "securities law" formally launched. Was formally implemented in 1999, since then, China's ipo pricing reform and speeding up the pace of marketization, there appeared the negotiation between the underwriters and distributing companies listed online pricing, to the secondary market price placement and private placement to legal persons and other new way of pricing. Since then, the development of the securities market into a new stage of market transition. On December 11, 2004, the China securities regulatory commission issued the first public offering a trial inquiry system of notice of several and supporting files regulatory requirements of the stock issuance examination and will be implemented on January 1, 2005. This marks China's stock market to the inquiry distribution system, the initial set up stock market pricing mechanism of initial public offerings.
 
From the equity division reform launched in April 2005, by the end of 2006, China's capital market is the most important institutional change has been complete. Equity division reform, has the vital significance for China's capital market. As professor Wu Xiaoqiu research report in 2006 "the capital market after the reform of non-tradable shares," noted, "in essence, trying to reform of non-tradable shares from system level" reengineering "the Chinese market, so it is by far the most important and most complex structural change, and the development of China's capital market and the system construction has the milestone significance. It has historical significance can almost and establish the market in the early 1990 s as" the completion of the reform of non-tradable shares, make fundamental changes have taken place in China's capital markets operation platform, from then on China's capital market into a new era. The end of the shareholding system, the full circulation market structure formation, for China's capital market play its assets for the basic function of the basic function of scientific and reasonable valuations.
 
In the reform of non-tradable shares, the inquiry system, against the background of combing the marketization of Chinese stock issue pricing path, research the rationality of the Chinese stock market IPO pricing system, to reform and perfect the new pricing and distribution system has certain practical significance.
 
1.1.2 research purpose and questions
 
From the perspective of a new pricing marketization development process, from pricing system to the replacement of inquiry system, means that the inquiry system is better than the pricing system of a choice. Under the inquiry system, roadshow program read distribution companies, distribution companies, securities underwriter, institutional investors and other market information asymmetry between the participation subject had significantly lower, securities underwriters in the process of inquiry can fully understand the status of the market demand for new equity, qualified inquiry object can also be the basis of fully understand the information quote us more reasonable price. From the inquiry system at the beginning of 2005, its effect how, what are the problems in the process of execution, the future should be how to make an inquiry system, perfected, is the starting point and ultimate purpose of this study. Thus, this paper put forward the main research questions:#p#分頁標題#e#
 
(1) the IPO (Initial Public offering, Initial Public Offerings) pricing will be able to better reflect the fundamentals of a company's financial information, how to reflect?
 
(2) what are factors influencing the price of new shares listed on the first day? Price of these factors reflect how?
 
(3) the IPO initial returns? Compared with the pricing system, the primary market on the first day of IPO pricing and listed on the secondary market price differentials narrowed? IPO pricing efficiency is improved?
 
(4) whether institutional investors in the IPO pricing play a proper role? As a more professional market pricing participants, whether they are contributing to the new pricing is more reasonable?
 
Answers to these questions, will be conducive to the implementation of inquiry system of effect evaluation, to improve the system of share issue price to find the proper way.
 
1.2 the research content and research ideas
 
1.2.1 the scope of the research content
 
This paper studies the main contents are:
 
(1) in the IPO market of listed companies in China offering price and on the secondary market price and reflect the basic values of distribution companies of the relationship between financial indicators.
 
(2) stock market IPO issue price is much lower than the market price of the secondary market, the IPO excess returns without risk, leading to lack of IPO pricing efficiency. Chinese stock IPO pricing efficiency and its influencing factors is also discussed in this article the second question.
 
(3) after the stock of short-term price performance and pricing.
 
(4) the underwriters in the IPO afternoon if there is a steady, or prop up the market behavior.
 
1.2.2 research thought and framework
 
In this paper, the research idea framework: firstly introduced the research background and research questions; Second in this paper, the research questions related basic theory of stock pricing, based on the IPO pricing in China with the background of the evolution of distribution system is analyzed, and summarized the related literature research questions; Again is the main research content of the article, that is the primary market and secondary market stock price relation with financial targets (chapter 4), IPO pricing efficiency (chapter 5) and short-term price performance after IPO underwriters stability in the city or prop up the market behavior (chapter 6); Finally is the conclusion and policy recommendations, the contributions, limitations and prospect.
 
FIG. 1-1 research frame
 
1.3 in this paper, research methods and structure arrangement
 
1.3.1 research methods
 
This article take the normative research and empirical research method of combining the, and given priority to with the empirical research method.#p#分頁標題#e#
 
(1) the empirical research method. This paper USES empirical research methods including statistical and econometric analysis method. With correlation analysis, two independent sample test, simple regression analysis approach for the analysis of population mean, Probit regression analysis.
 
(2) normative research method. Normative research method mainly includes the induction and deduction method. In this paper, we use inductive method and deductive method based on the relationship between design and practice of China's IPO system discussion, infer the IPO market is the assumption of model, providing theoretical basis for empirical research.
 
1.3.2 chapters arrangement
 
This article is divided into seven chapters, the first chapter is the introduction, chapter seven is the conclusion and policy recommendations, among five chapters to follow from theory to empirical logic train of thought, the second chapter and the third chapter discuss the existing research literature and the system background, the fourth chapter, chapter five and chapter six respectively, pricing efficiency and performance of IPO pricing factors for empirical analysis. Chapters content in detail as follows:
 
The first chapter mainly put forward in this paper, the problem about your research, namely the financial factors, IPO pricing efficiency of IPO pricing and IPO prices, found that on this basis, introduces the research content and research ideas and research methods.
 
The second chapter is the theoretical foundation and literature review. Mainly divided into the following four aspects: (1) the stock investment value theory; (2) the stock short-term underpricing ipo pricing and research; (3) shares in the secondary market pricing theory; (4) after the IPO pricing performance and steady underwriters, or prop up the market behavior research. The theory and literature review lay the foundation for the empirical study.
 
The third chapter analyzes the background of China's stock market IPO system, and has carried on the international comparison, the reality basis for empirical analysis.
 
The fourth chapter for the authorization of the IPO pricing financial factors analysis, mainly through principal component analysis method to test the IPO pricing and the relationship between the six principal component factors. Section of this chapter is divided into the following sections, the first research question and methods; The second section of the sample selection and data sources; In the third quarter for IPO pricing financial impact factors of the empirical test; The fourth quarter as the empirical analysis result analysis; Section 5 for the IPO pricing efficiency, IPO pricing and further discussion of the relationship between short-term price performance in the afternoon
 
Chapter 5 for IPO pricing efficiency research under the authorization, mainly analyzes the uncertainty generated by asymmetric information in advance (the winner's curse theory) the applicability of the IPO market in our country. This chapter is mainly divided into four sections, namely, the first quarter sample selection and data sources; In the second quarter as the research method; In the third quarter for the analysis of the empirical results; The fourth quarter as the research conclusion and Suggestions for further research.#p#分頁標題#e#
 
Chapter 6 for the IPO underwriters stability, or prop up the market behavior after the empirical analysis, the three main analysis after the IPO stock price performance of influencing factors and the relationship between IPO pricing, and probes into the behavior of the underwriters stability, or prop up the market in China in the short term after IPO exists.
 
Chapter 7 as the research conclusion, limitation and prospect, to summarize the research conclusion of previous chapters, existing problems and deficiencies are discussed and the research, finally puts forward policy Suggestions and further research need to discuss the problem in the future.
 
CHAPTER2 theory basis and literature review
 
Under the inquiry system, inquiry object in the process of IPO, IPO price could you quote us, to a great extent, related to their ability of newly issued stock valuations. Therefore, this chapter first introduces basic theory of the study of IPO, the stock investment value theory; Then introduce and IPO pricing, price and new shares listed on the first day of IPO underpricing related literature at home and abroad; Finally, after the IPO price performance and review the literature of underwriters prop up the market behavior.
 
2.1 stock investment value theory
 
2.1.1 the discount cash flow model
 
American economist Irving Fisher (Irving Fisher) (1986) proposed the asset valuation of the important thoughts, the current value of assets is equal to the sum of its future cash flow discount, the basis of the theory has been the asset valuations, and so he is called pioneer of intrinsic investment value theory. In 1906, he was in the nature of capital and income, complete this paper discusses the relationship between income and capital and value, etc. In 1907 he was in the interest rate: the relationship between nature and economic phenomenon "in nature and in the interest rate decision factors in the system analysis, and further study the relationship between income and capital value. Under the guidance of fisher's important thoughts, has had many value valuation models, among them, the most famous is the dividend discount model of Williams (Williams).
 
Famous investment theorists Williams in 1938, the United States in his book value investment theory, put forward his theory of value investing and discount of cash flow model (DCF model). The purpose of this theory is that investors invest in stocks is to obtain the claims on future dividend, future cash flows for investors is their future can get dividends, thereby, the intrinsic value of the stock is "can receive all dividends in the future would be the sum of capital reduction now value", the general expressions are:
 
V =
 
2. The signal model (Signaling content)
 
The signal model is a model based on the issuer has the information advantage. For the company's development prospects and intrinsic value, distribution companies tend to have more information than the outside investors. At this point, rational investors will face an adverse selection problem: only the value of the company is lower than the average value of distribution companies to issue shares at an average price. At this time, in order to distinguish themselves with low quality company, company will choose high signal to indicate that they are high quality. Allen and Fauhaber (1989) and Welch (1989) and others will be the basic thinking model, often referred to as signal model. They think that have a higher value of the company is interested in is less than the price of the market share issue, so as to prevent imitation of low quality company, form a separating equilibrium, in these models, distribution companies passive dynamic distribution strategy, IPO will then follow-up financing - Offering (Seasoned Public Offering). Distribution companies issued by underpricing, gave investors a good impression, so that enterprises can be issue in the future at a higher price. As long as distribution companies keep enough patience, you can after listed in different ways to compensate the damage caused by underpricing issues place.#p#分頁標題#e#
 
3. Baron principal-agent model
 
Baron (1982) from the perspective of information asymmetry between issuers and underwriters for the analysis of IPO underpricing phenomenon. Baron believes in the issuing company and the underwriters of the IPO underwriting contract, before the information is asymmetric between issuers and underwriters, underwriters in information advantage: on the one hand is due to the underwriters
 
CHAPTER3 IPO system in China's stock market background analysis
 
3.1 the IPO pricing mechanism and the development of IPO pricing in China
 
3.1.1 IPO pricing mechanism
 
Based on the distinction between the IPO pricing mechanism mainly consider two issues: (1) whether you need before the IPO price is determined by a set of mechanisms to collect investors demand price, quantity demand information, game process has made investors into the pricing; (2) whether the underwriters have free allocation of stock rights. At present, the national securities market choice of IPO pricing mechanism according to the above two criteria, can be divided into Fixed Price (Fixed Price), bidding, Auction and accumulated bidding (Book Building) three types, specific content see table 3-1:
 
Table 3-1 major IPO pricing mechanism
 
Before the price is for investors demand for new information
 
Whether or not
 
The underwriters have issued shares of flexibility is accumulated bidding way allow placement at fixed prices
 
No way of bidding publicly subscribe at fixed prices
 
In the fixed price mechanism, releases the price fixed by the administrative way, or determined by the underwriter and the issuer according to certain standards, investors in the excluded, not participate in the development of price process. According to the pricing after the allocation of the stock, fixed price method can be further divided into allow placement and publicly subscribe (Public Offer) in two forms. The former allows allocation of stock underwriters freedom (at least partially), the latter does not give underwriters that right. In practice, a fixed price subscribed way adopted by more.
 
Under the bidding mechanism, underwriters before determine the IPO price need to collect investors demand information of price and demand quantity, and have relatively small stock (compared with other methods), free distribution of power allocation according to the prescribed rules beforehand. Specific hair including uniform price auction method and differential price bidding. Under the uniform price bidding, the lead underwriters for all valid purchase according to the accumulated from high to low, the cumulative subscriptions to new shares issuance price is effective price, all of the declaration on the winning. At the same time, the effective price is the ipo price, all the bidding purchase according to clinch a deal the price. In the difference between the price bidding, the price is the lowest price, the purchase price of the winner's own bid.#p#分頁標題#e#
 
Accumulated bidding pricing as the highest degree of marketization of pricing mechanism has been widely used in the United States, other pricing mechanism is seldom used. In the United States, unregulated IPO pricing mechanism, can have the freedom to choose. American accumulated bidding as the highest degree of marketization of IPO pricing, its high degree of marketization, see performance need through many stages before the IPO price is made, a wide range of information gathering process, more important is the securities underwriters can free distribution of stock. This is considered American accumulated bidding mode and the essential difference between other IPO pricing mechanism. Some researchers (Sherman, 2001) suggested that underwriters free allocation of stock rights is very important, only have the right to allocate shares according to the information, the underwriters will give investors enough incentive to report what they have correct information, thus to make the "accumulated bidding" and its role play is possible.
 
In addition to the bid, the total bid price quotations and fixed price mechanism, still can choose a hybrid pricing mechanism. Hybrid mechanism can choose two specific ways: (1) the bidding combined with fixed price sale mechanism; (2) accumulated bidding mechanism combined with fixed price sale. The most widely used in practice is the second way. Whatever the form, the purpose is to mix two mechanisms in order to give full play to the ability of institutional investors in terms of price discovery, at the same time protect the interests of small and medium-sized investors. Particular way is conducted by institutional investors bid or accumulated bidding, and in this link to complete the price discovery and the IPO pricing. But not all stocks are assigned to participate in bidding, accumulated bidding of institutional investors, but out of (the specific proportion in different markets have different arrangement) to investors allocated with fixed price sale, here the "fixed price" is used in institutional investors bid or accumulated bidding "discovered" the price.
 
3.1.2 the development of IPO pricing in China
 
China's IPO pricing is basically a process of continuously explore in the process of reform, from the fixed price mechanism, to try out the bidding mechanism of high degree of marketization, to make an inquiry subscription (hereinafter referred to as "quotation") mechanism, can say it was under the administration of the epitome of the planned economy to market economy, such as to issue the p/e ratio gradually relaxed. The evolution of China's IPO pricing is divided into four stages, respectively for the pricing, relax control issue the p/e ratio pricing, p/e ratio pricing as well as the current inquiry mechanism, points mentioned below:
 
1. Administrative pricing stage (the "securities law" in July 1997, before the formal implementation)#p#分頁標題#e#
 
Unified administrative pricing stage, it is to point to the ipo pricing by the securities supervision and, according to a fixed formula is not issued by the underwriter or investment Banks and a stage of the negotiation between the company and therefore generally, the term "fixed price mechanism connotation is different. This one phase and can be subdivided into two stages, early pricing with relatively fixed p/e ratio pricing stage at fixed prices.
 
(1) fixed price
 
Securities market established in the past, most of issuing new shares of the company shares issued in accordance with the face value, pricing system, not the number of companies in the stock issue, offering price and no discretion over the p/e ratio, basically be determined by the CSRC, most of them adopt fixed price way pricing.
 
However, since 1994, offering price reform in China, on a trial basis for distribution. Ha shirble, Joan gold plate a-shares, xoceco electronics and qinghai's bidding auction of four companies in trial mode, completely according to the market-oriented principle to determine the price of new shares issued, the prices fully reflect the market demand, A basic line, the secondary market price, IPO efficiency has improved significantly. Defect of this mechanism is that investors are prone to "free rider" (free rider) behavior, and the number of investors to participate in the subscription will there is a big uncertainty, coupled with the stock market is too small, the uneven stock supply and demand, the ordinary investors lack of all kinds of the value of the stock right and reasonable judgment, in the case of market overheating more prone to irrational declared value, have serious "free-rider" behavior, lead to greater risk faced by investors. Xoceco electronics and qinghai's shares listed below the issue price, after investors quilt cover are examples. Since then, the CSRC has suspended this kind of issue, no use in the future.
 
(2) the relatively fixed p/e ratio.
 
IPO issuance price at this stage is basically according to issuers didn't share profit and relatively fixed level of p/e ratio to determine, namely the after-tax profit per share on the p/e ratio. Usually adopt the fixed price/earnings ratio of administrative regulations. (13-16 times earnings, with an average of 14.83 times) pricing method. Due to the p/e ratio have been identified, the actual price is mainly determined by each company's after-tax earnings per share. The calculation method of EPS experienced a process of gradual improvement, specifically, the calculation method of after-tax profit per share has experienced three times of change, so here is divided into four stages to illustrate:
 
Specifically standard: 1) the after-tax profits, not before the month of December 1996, stock market has no clear stipulation of after-tax profit Per Share calculation method, issued by the diluted EPS sex (the way Per Share, EPS) or EPS as a basis to calculate the weighted average, useful also last year's EPS to calculate, so the EPS calculation chaos phenomenon.#p#分頁標題#e#
 
2) based on the past performance: on December 26, 1996 issued by the China securities regulatory commission on stock issuance of certain rules relating to the notice of the clear stipulation, IPO pricing is no longer based on the profit forecast (front did not mention have based on the profit forecast, appear such narrative, here doesn't seem appropriate), instead of in the past three years has achieved the EPS is based on the arithmetic mean. Although united the new pricing method for the first time, but ignore the company's future development prospects, make the high growth firms underpriced.
 
3) past performance and surplus forecast: 1997, earnings forecasts and weighted way back into the issue of pricing model, so the issuing price per share issuance of after-tax profit multiplied by the p/e ratio. And among them, the after-tax profit per share for when-issued after-tax profit per share, a year 70% + of issuing the dilution * 30% expected after-tax profits.
 
4) considering current forecast profits at the same time: on March 17, 1998, issued by the China securities regulatory commission on supplementary notice some issues of equity offerings for the ipo pricing method was amended, amend the offering price to release was forecast profits divided by the weighted average number of shares and then multiplied by the p/e ratio. Although this way to avoid the disadvantages pricing based on the past historical performance of company, but the reliability of earnings forecasts and created another problem.
 
Overall, 1996-1996, before the implementation of the securities laws during this period, the use of ipo pricing is relatively fixed pricing of p/e ratio, the issue of new shares price according to the enterprise's after-tax profits per share and a relatively fixed level of p/e ratio to determine. Due to the stock price with significant administrative color, issue the p/e ratio is disconnected with the secondary market average p/e ratio, cause the stock price and the secondary market trading price of the huge differences between new shares listed on the same day there is a gain of 50% to 250%, which also led to a series of problems remains to be further solved.
 
2. Loosen issue the p/e ratio pricing stage (from July to the second half of 2001, 1997)
 
Take effect on July 1, 1999 of the "securities law" regulation, the stock price negotiated by the issuing company and the underwriters. This suggests that China's price mechanism in securities market, to market a major step forward. In the same year on July 29, the China securities regulatory commission issued the notice on further perfecting the stock issuing way (hereinafter referred to as the "through"), the price for the ipo market into the further stipulates that require the issuer and underwriter when negotiated pricing, institutional investors to participate in pricing. Offering price will review by the securities and futures commission, however, so the competent authority of price control remains. This can be seen from the "by", the ipo pricing can exceed the issue price range, but beyond the limits of the amount is not clear. This stage pricing are presented in the past issued p/e ratio limit easing and cooperate with different distribution (placement, Internet pricing), separately as follows:#p#分頁標題#e#
 
(1) the issue the p/e ratio limit the legal person of preliminary relax allotment inquiry mechanism.
 
"Notice" also stipulates: the total share capital of 400 million yuan of above company can take network offering to ordinary investors and corporate placement of a combination of issued shares. Under the release mechanism, corporate presentation, make inquiries to institutional investors, and concepts such as the IPO market in our country, introduced strategic investors issuer and the underwriter according to institutional investors inquiry information to the issuing price finalized, also has the right to allocate shares at the same time, so the introduction of the legal placement inquiry mechanism to promote the marketization of China's IPO pricing process, at the same time, regulators and fade gradually relaxed at this stage is also issue the p/e ratio limit, make its custom more market-oriented. Although in mature market inquiry mechanism still exists bigger difference, however, as a legal person of inquiry mechanism fundamentally is close to inquiry mixed with fixed price mechanism, the concrete adopted "inquiry range; accumulated bidding inquiry", "total certain and uncertain circulation, the price only set a floor price, unlimited", etc. Once helped push up steadily up the ipo p/e ratio, 2000 ipo p/e ratio is mindong electric power in the ipo p/e ratio is mindong electric power to 88.69 times the highest record in history. Although the marketization of the ipo pricing to a certain extent inhibit some of the stocks of hype, but did not achieve the desired effect. From loosening and desalination way p/e ratio of the ipo, ipo discount at this stage is still as high as 155% of average.
 
In general, the hybrid mechanism can transfer the institutional investors to collect information and reveal the true value company's enthusiasm, guide the rational and the theory of long-term investment, also can make the individual investors to participate in the ipo, which include social justice, especially suitable for being mature or development of emerging market, China's Hong Kong stock issue market is a typical representative of the application of this mechanism. However, the issue of the market mechanism in the IPO market in China and expectations have head, a series of legal person share allotment "black-box" followed, and strategic investors is not unreasonable phenomena of the "strategic", so since the second half of 2000, and apply to decrease gradually, but mainly in some super large cap stocks such as the issue of baosteel, sinopec etc.
 
(2) ease restrictions on the p/e ratio of online sale pricing mechanism.
 
After the second half of 2000, as the legal placement and placement of 2 class market gradually reduce, the Internet pricing issue on sale and gradually become the mainstream of Chinese IPO market mechanism. But with 1999 years before the fixed price issue online have the significant difference, underwriters and distribution companies in issuing p/e ratio on issues such as the autonomy of more choice and formed a high degree of marketization of the fixed price mechanism of put on sale. At this stage of the IPO market trends, and in 2001 the formal implementation of the authorization of relations, fully reflect the China securities regulatory commission for the implementation of authorization and realize the secondary market price is in line with high discount to solve China's IPO market and its related problems. In July 2001, after falling stock market, a lot of new shares price shows a tendency of high low go, market price issue of new shares of the backlash, in November 2001, basic stop using this method.#p#分頁標題#e#

 
3. Control the p/e ratio pricing stage (early in the second half of 2001 to 2001)
 
In the second half of 2001 due to the reduction of state-owned shares is caused by the stock market fell sharply, almost all in accordance with the market pricing of ipos are below the first-day closing price, to participate in the subscription investors take a lot of risk, lead to the SFC to rethink the propriety of IPO pricing. So in the second half of 2001, the securities and futures commission decided to adopt the method of control p/e ratio. Compared with the original p/e ratio pricing, a new way to make changes in two aspects: first is the issue price range fluctuation amplitude is about 10%; The second is that regulations issued p/e ratio is less than 20 times. Underwriters and distribution company can only in the p/e ratio range strictly, through inquiry subscription to determine the issue price of the stock, so also called it a "half marketization" online pricing. From the actual operation of the market, the IPO p/e ratio of basic maintain at about 18 times.
 
4. Inquiry mechanism phase (yet) at the beginning of 2005
 
Before 2005, IPO pricing in our country mainly adopts a fixed price mechanism. The marketization is not high maneuverable pricing mechanism is suitable for at that time, the basic characteristics of our country securities market, the securities issuance of most emerging market countries also used this system, the main reason is:
 
(1) of the securities market mechanism has not formed mature investor base. Bidding mechanism, the mechanism of total bid price quotations on marketization degree is higher when two kind of IPO pricing system, they require on the stock issue market have mature institutions for broad participation. China securities regulatory commission (CSRC) has been used in 1994 IPO bidding mechanism, but due to institutional investors team has not yet mature, bidding mechanism did not succeed. Only "Joan gold plate", "shirble thermoelectric", "three", "xoceco electronics" four companies use the bidding mechanism, after been suspended (see table 3-2). This team is to use for cultivating institutional investors, accumulated bidding such as marketization degree higher pricing insurmountable stage of development.
 
Table 3-2, 1994-1995, four patients with IPO of the company's basic situation
 
Securities code referred to as the starting price (RMB) starting number (shares) listed on the first day or drop (%)
 
000572 Joan gold plate 6.68250041.31
 
600864 shirble thermoelectric 4.62500122.82
 
600869 three at 9.581500 to 18.58
 
600870 xoceco electronics, 13.381250 to 2.46
 
Data sources: Wind data, the author extraction.
 
(2) the IPO pricing administrative intervention has its necessity. Irregular way of bidding, accumulative total bidding price will harm the interests of the parties in the market, therefore, by the government on behalf of the interests of the parties to the IPO pricing regulation is an inevitable choice.#p#分頁標題#e#
 
Through constantly exploring, we shall practise a system of inquiry at present is actually a hybrid pricing distribution system, is a kind of hybrid mechanism of accumulated bidding and fixed price sale, is different from American accumulated bidding mechanism. American accumulated bidding mechanism allows independent underwriters are allocated to the stock, and the underwriters no allocation of stock rights of our country. In determine the issuing price of inquiry system using the cumulative law, through the quotation for institutional investors to finally determine the IPO price. Accumulated bidding enquiry to the preliminary inquiry and inquiry process is divided into two stages, the preliminary inquiry in writing to not less than 20 (number more than 400 million shares are issued, no less than 50), participants are not affected by the constraints of the quotation. Preliminary inquiry is aimed at professional research of inquiry object is used to determine the one inquiry range, to shrink the formal accumulated bidding stage offer range, improve efficiency. Offering price range is determined, the issuer and its sponsor should be issued within the price range accumulated bidding inquiry inquiry objects, and determine the issuing price according to the results of the accumulated bidding inquiry.
 
On December 11, 2004, the China securities regulatory commission issued "on some issues of ipo inquiry system notice and relevant supporting measures the stock issuance examination standard forget record 18th - on ipo inquiry object condition and behavior of supervision requirements, and regulations on January 1, 2005. The main content of these regulations include:
 
(1) to the inquiry object placement of shares as follows: the proportion of the number of public offering in more than 400 million shares does not exceed 20%; In more than 400 million shares (including 400 million) of less than 50%.
 
(2) the inquiry object is identified as the securities investment fund management companies, securities companies, trust investment companies, finance companies, insurance institutional investors and qualified foreign institutional investors six class organization.
 
(3) the inquiry objects should be committed to inquiry allocated to stock more than 3 months.
 
(4) the regulation to the ipo after total equity as a basis for the calculation of eps and issue the p/e ratio. So when calculating price for the issuance of new inquiry, can be relatively reduced eps, under the condition of issuing p/e ratio must be, to reduce the price, make the primary market to further expand the profit space.
 
(5) disclosure of eps should be issued p/e ratio is used when deducting non-recurring influence, so as to make the investors can evaluate the real value of the company, to prevent the distribution companies to whitewash profits through non-recurring profit and loss, and, in turn, affect the issuing price inquiry purchase way, on the one hand, in the issuing company established between investors fully communication mechanism, reduce the degree of information asymmetry between each other; And help to explore the market for the real demand of issuing new shares, to reduce the information asymmetry of underwriters and investors. In the long run, after inquiry procedure to determine the issuing price more easily recognised by the market, the listed after the volatility of the stock will be reduced. The current through the issuance examination committee review, waiting to be issued by the company, must adopt book-building issue.#p#分頁標題#e#
 
Evolution on IPO pricing, which are a from administrative pricing to market mechanism of the process. Before the inquiry mechanism implementation, although also once took a highly market-oriented pricing mechanism, however, most of IPO pricing is still dominated by administrative pricing, the regulatory authorities to issue the p/e ratio first set a range of each listed company within the scope of the so-called market-oriented, due to the Marketing Department of mature, listed companies and market participants behavior is not standard, and the distribution of p/e ratio. This fully shows that the our country securities market from the market still has great gap in the true sense, at the same time that the IPO pricing is difficult to truly reflect the value of the company; Also too much too little is the product of policy variable, or a listed company and other market participants behavior distortion of the final result.
 
Because of IPO pricing not fully market-oriented, the SFC issued provide p/e ratio, causing the IPO p/e ratio is far lower than the secondary market average p/e ratio, since 2000 the IPO issuance of the risk of failure, every IPO company shares have subscribed to a certain extent; the new shares has also appeared in the formation of the initial excess characteristics different from other countries and regions.
 
Shares in the company for the first time offering (IPO) pricing way of international comparison
 
For the first time 1. The company's stock issue pricing
 
Because of new flotation price reasonable or not, will determine success or failure of listed companies underwriting the underwriters in underwriting the shares attaches great importance to the estimate of the price. Usually underwriters will take several weeks to set up a set of appropriate evaluation model of the issuance of company, the factor includes the company over the past financial and operating situation, future development potential, market trends and trend of global economic and financial environment changes, etc. According to the above factors, the underwriters will estimate a reference price, to the United States securities and exchange for the record, but the price is not a fixed price, usually it is a price range. Unlike China, the securities and exchange commission and the exchange is not the evaluation mode for compulsory specification or formula. Underwriting a preliminary estimate price, and the formulation of the issuing company after the first draft prospectus publicly, lead underwriters through its branches and underwriting syndicate, first know the market for an evaluation and subscription intention. Underwriters will plan for a national or global roadshow tour, invited to institutional investors and the general investors to participate in its roadshow or one-to-one discussions, and record every investor demand quantity. Through many times after discussion and communication, live underwriters can clearly know the demand of the market situation and the company may accept the underwriting of IPO price. Finally, reference for the similar company's recent share price level, the overall economic and financial situation, and the expectation of listed shares gives comprehensive analysis, and after agreement with the proposed public offering company determine the final price. Finally, the sale shares in this offering price assigned to participate in the registration, and then complete the whole procedure of public offering.#p#分頁標題#e#
 
2. The initial offering price making model Japanese shares in the company
 
In general. Japan securities issuance price formulation, is deducted results according to the requirements of the market price and discount rate calculation, demand investigation results can provide information about market conditions, in order to complete underwriting business. Before 1995, the Japanese company stock raising price is equal to the price, also is equal to the issuing company is expected to raise the amount, but needs after deducting underwriting fee is the actual amount of the company. After 1995, the issue price is equal to the initial public offering price amount after deducting underwriting fees, also is equal to the issuing company is expected to raise the amount, i.e. issuing company actual raising, this method is also called "direct method". Press the "direct method", the underwriting fees may be deducted from the initial public offering price, which makes the distribution companies don't need the underwriting fees as non-operating expenses to offset, which can increase the issuance of the company's net assets. In using the method of "direct" public securities, securities industry institute of Japan for information disclosure has the following rules: (1) initial public offering price and the price is not at the same time, must be clearly explained in the application for securities, its means of records should also with the "price". (2) compared with previous public, by reducing the underwriting fees will add to the interests of the company relevant information, so the company must be indicated in the financial statements.
 
Listed for the first time, the company in the first board of directors, in public, the number and provide the tender number to resolve (raise prices at this time has not yet been decided). The second tender will be decided by the board of directors of the lower price. Tender, in the same company 85% of the benchmark price lower limit as bid price, more than the price as a declaration of bidding price.
 
3. The Hong Kong stock offering price formulation mode for the first time
 
Shares on the first issue of pricing in the securities market is not invariable, especially in the face of the emerging stock market open to the public or gradually maturing, the major change is possible. Real development of the Hong Kong stock market started in the early 20th century 80 s to the mid - 90 - Hong Kong securities market is basically still belongs to the emerging securities market, its performance is one of the larger proportion for investors structure of retail investors. 1980-1994, the Hong Kong securities market underwriting pricing basically adopt open way of underwriting fixed price, but with the rapid development of the securities market, the Hong Kong securities market internationalization degree is higher and higher, the international capital liquidity is becoming more and more quickly. Authority of Hong Kong's securities according to the structure of the investors in the characteristic that still have large proportion of retail investors, at the same time to meet the foreign institutions and other international investors powerful investment requirements, in November 1994, the SFC and the stock exchange of Hong Kong published "about ipo mechanism of joint policy statement", since large ipos in Hong Kong basically all the inquiry subscribe and publicly subscribe mix of underwriting mechanism.#p#分頁標題#e#
 
Mixed distribution underwriting mechanism from Hong Kong since the implementation of, basically has reached the expected purposes of the regulator and in the process of implementation of continuously perfect. Its distribution system have subscribed some minimum percentage of rules, and implement the callback mechanism, when the clawback mechanism refers to the share issue, in the distribution of the number of institutional investors and social public investors establish elastic mechanism, price is decided by institutional investors and ordinary investors (retail) decided to stock in the stock allocation proportion between institutional investors and ordinary investors. If low prices set by institutional investors, the general investors can through to explain the way to improve the oversubscribed ratio, made in advance of the callback mechanism under the rules of institutional investors placement of quantity decrease to zero; If institutional investors to determine the price on the high side, general investors purchase over-subscription rate will reduce, at this point, there will be a lot of share placement agency.
 
In short, the clawback mechanism between institutional investors and ordinary investors to establish the interests of an effective checks and balances mechanism, can use the power of the market itself, effectively solve the stock allocation proportion between institutional investors and ordinary investors. In addition and establish the subscribed the division of group A and B in the mechanism, for group A subscription amount is not higher than 5 million Hong Kong dollars, group B for the subscription amount more than 5 million Hong Kong dollars, the mechanism to some extent to protect the interests of small and medium-sized investors, also to give full play to the leading institutional investors in the issue pricing is multi-purpose.
 
Hong Kong company shares listed on the underwriting price set for the first time was issued by the companies, major shareholders. Sponsors and expenses are agreed, usually the sponsor will also concurrently hold the position of the lead underwriter when issuing new shares, the stock exchange of Hong Kong department is involved in any pricing decision, don't give any comments. The parties agreed the prices, will fully consider many factors, among the more important is: the net value of the company, the company operating situation, company management ability, corporate earnings outlook, securities market present situation and the other to the market value of listed companies in the same industry, the company in the industry, such as leading companies in the position, the proportion of issuing new shares. Usually have the p/e ratio of listed companies of the same industry, is an important reference when issuing new shares. And distribution companies in its industry for product design and other aspects of the leader, it releases the price may be adjusted upwards again. In addition, another is on sale, after considering the various conditions, for example, a company's p/e ratio can be classified as 10 times, but to attract investors and investors think shares have space to grow up, may adjust the p/e ratio down to eight or nine times, in order to make the whole issue can obtain oversubscribed. In addition, if a company has a stable profit growth and good prospects for development, also can make the flotation price increase.#p#分頁標題#e#
 
4. The first listed company in Singapore stock underwriting price set mode
 
Recognized by the stock exchange of Singapore pricing on several kinds, such as cash flow discount method or p/e ratio method, as for the pricing, which kind of way does not interfere with the stock exchange of Singapore, but beg underwriting successful and active trading market.
 
5. Our first issued securities underwriting price set mode
 
Basically before securities law implementation, our country the ipo pricing, 12 to 15 times earnings way before entering the market, in fact, price for the issuance of new shares has been confirmed, not to the relationship of supply and demand determine the price. Even if there is some inquiry range of market-based approach, but on the whole, please not artificially set p/e ratio.
 
Shougang shares in 1999, san-jiu medicine starting, vacuum electronic rights, title and the beginning of 2000 electricity use legal way of issuing new shares, gradually break through the traditional usage limit, to take the issue of corporate presentation and to institutional investors inquiry way, using the function of market mechanism found gradually. Issuers need to hire a professional financial advisor, and the value of the stock price correctly evaluated, thus by the broker, the issuer and the issuer financial adviser to reasonable pricing based on market supply and demand.
 
According to the development direction of China's securities market, generally can take the following the ipo pricing according to different situations.
 
(1) p/e valuation method or net worth ratio method.
 
This method take EPS * p/e ratio, ipo prices = = net asset value per share * or the ipo p/e ratio formula to determine the issue price, because generally more quantitative, so it is often as new issues of first choice.
 
(2) the discount cash flow model (capitalization pricing).
 
This model is the modern financial theory and the combination of the capital market theory, general through "the ipo price = future cash flow discount" to determine the ipo price.
 
(3) the EBIT method (financial leverage method).
 
According to the calculation method of financial leverage, EBIT marginal cost of capital to determine the reasonable financing institutions and financing scale and financing sources, to determine the issue price of the enterprise. This method will predict funding needs financial management point of view and the offering price, only the model on the influencing factors of stock market supply and demand less consideration.
 
(4) entirely online bidding and bid online, offline synchronization method.
 
This method is completely determined by market supply and demand issue price, and both institutional investors and retail investors are free offer ways to participate in the bidding. This is determined by the market price of ipos pricing may lead to larger market risk. Pricing is generally adopt the method of accumulated bidding inquiry to determine the issue price, have a certain lower limit and upper limit of a dummy inquiry inquiry, at the same time the underwriters provide a reference price, but in the end the underwriting price or to determine the results of market supply and demand.#p#分頁標題#e#
 
(5) the market price discount.
 
Market discount method is mainly used in the new issue or first issued according to the market price of similar industry stock is issued a discount, but brokers and investors actually face a greater risk of market, brokers may submit an expense account a large number of surplus stock and the risk of issuing and investors face listed below the issue price risk.
 
6. The way of stock offering price for the first time in Taiwan
 
In Taiwan, December 6, 2004, the underwriting system changes to the former, decided to IPO price based on the market of the SFC to develop a reference price, in the conventional formula by the issuer and the underwriter through reference calculated by the formula to discuss the price of the system, if there are significant differences in public disclosure and disclosure. Calculation formula is:
 
P: underwriting reference price = (A * 40%) + (B * 20%) + (C * 20%) + (D * 20%)
 
Among them, A is 3 per share after-tax profit * similar to listed companies in recent years, 3 years average p/e ratio; B for 3 years on average dividend/similar per share dividend rate of listed companies in recent 3 years; C is the latest net worth per share; D for this year's expected dividends per share/i.i 1 year time deposit interest rates for financial institutions.
 
May be produced by using the formula questions as follows:
 
(1) a focus on historical financial data. Such as similar company recently 3 annual average p/e ratio, the last three annual average interest rates, although the recent 3 year average data can avoid a 1 year of outliers and affect the calculation results, but in a rapidly changing market, if totally dependent on historical data to evaluate the IPO company fear loss of reference value.
 
(2) formula similar to the choice of company has a lot to be manipulated in space. Although in practice the underwriters and the underwriting price final call on this issue, but as a reference for the market of the formula should be its objectivity, such as Japan to determine the underwriting two similar companies, a is determined by underwriters, another is determined by the exchange. This way, can reduce the underwriters and distribution company in the same industry p/e ratio the possibility of deciding the underwriting price manipulation.
 
(3) the forecast data easy to manipulate. Formula of after-tax profit per share and dividends per share, while considering the IPO of the company's future, but not rules, how to choose the principle terms of the prediction data. So distribution companies may use manipulation of the financial forecast earnings management way, make use of market distortion calculation result of the company.
 
(4) "the one-year deposit interest rate" in the formula using flawed. The use of "the one-year deposit interest rate" in the issue of pricing, makes pricing reference the value of the market portfolio, but the one-year deposit rate affected by the fluctuation of the vulnerable to short-term funding and interest rates would be capital position adjustment, therefore, according to the original value of the current interest rate and dividends also may cause the underwriting reference price deviating from the market.#p#分頁標題#e#
 
In addition, the market commonly used formula to calculate weight of the factor in the lack of financial management theory basis, and according to the formula of calculating the price, considering the many factors also shortcomings, such as market supply and demand, the IPO companies ranked in the same industry in the market, etc. New system about stock underwriting system first underwriting price decision, because of the financial supervisory commission, executive yuan has been abolished in the commonly used formula, and specify the future price of IPO underwriting by the issuer and the underwriter agreement together, distribution companies need only full disclosure in the public instruction set price basis and mode, in order to IPO price can make more reasonable and reflect the demand of the market.
 
The change of China's stock IPO issuance way
 
China's securities market is made up of the socialist planned economy into socialist market economy in the process of formation. The establishment of China's securities market opens the door of the contact of the capital market economic system, for securities market related specification of capitalism, from gradually grope launched stock management system with Chinese characteristics, and the relevant specification will be along with the development of the securities market and the change of the environment and the correction, experienced a long period of continuously explore and improve the process. IPO issuance way is not exceptional also, successively appeared offline distribution (including subscription card issuance table way, pegged to the savings mode as well as the advance payment in full mode), combining Internet issue and legal allotment, value allotment as well as the current recovery fund subscription inquiry subscription, will now be issued a variety of way is as follows:
 
1 subscription form distribution
 
Early subscription registration form (including reservations, subscription registration form and draw list) issuing new shares of the way there are two main forms: limited release and unlimited distribution. In 1991-1992, shenzhen and Shanghai stock exchange has a stock issue new way, using limited subscription registration form of lottery unsuccessful subscribe, investors need to subscribe first registration, ticket before buying stocks. Fixed-point release booking sheet, or subscription card that is used by the Shanghai stock exchange at the end of 1991 or 1992 in shenzhen stock exchange use the subscribe method, such as the draw for the table has a limited release in common. Limit for subscription card table in short supply, plus black market madness hype, makes a lot of money spent subscription card on the table, causing high subscription costs. Shanghai as the first batch of average stock price of 4.68 yuan, the subscription card table price of 5 yuan. Raising money 913 million yuan, the listed company through share offerings and subscribe table sales income is 913.6 million yuan. On December 17, 1992, the state council issued "to further strengthen the securities market macro management notice", for the first time issued for unlimited subscription, and in 1995 after the issue of the subscribe of waste paper registration form way.#p#分頁標題#e#
 
2. Linked to savings distribution of (deposits)
 
On August 18, 1993 the state council promulgated the share sales in 1993 in authentication method "stipulated shares to be issued on sale" unlimited subscription form "and" linked to bank deposits in two ways. Pegged to the bank deposit refers to the desire to participate in new shares subscription investors in designated Banks receive regular norm fixed rate for the deposit certificate and deposit, deposit certificate issued an unlimited and attached to each certificate number, date of deposit according to the number of certificates of deposit and bonds, after the number of shares a success rate and the ticket number, unsuccessful investment talent can purchase new shares. This way to avoid the purchased subscription card table money loss, reduce the application costs and attract the public savings, but beneficial to deep-pocketed, unfair to small investors, and high resale unsuccessful qualification speculative phenomenon is prevalent, the methods commonly used in 1996-1997, 1998 years after the basic is no longer used.
 
3. A full advance payment way
 
Full advance payment methods adopted in 1995, which is pegged to the bank deposit way, including "full payment in advance, proportion of allotment, a full refund" and "full payment proportion, placement, turning the balance" in two ways, points mentioned below:
 
1. The full payment in advance, proportion of allotment, balance refund
 
Investors in rules applied time, will be a full subscription fund deposited in the lead underwriters collecting bank set up special account, after the purchase archived bank account to freeze, after the capital verification and to determine effective subscription based on stock issuance and purchase amount calculation allotment proportion, share placement, the balance against investors also way of stock offering. The way of issuing date shall not exceed 8 days (including statutory holidays), distribution is not more than 0.10 yuan per share, issuing amount shall not exceed 5 million yuan.
 
2. The full payment in advance, scale placement, the balance transfer
 
This operation mode with "full payment in advance, proportion of allotment, balance the retreat" way similar, different, the balance of the purchase to deposit, the interest calculated on bank deposit rates, the deposit for the special deposit, payment in advance is not allowed. The subscription of the full advance payment way that all investors can subscribe to stock by placement of proportion, it is the other way of improvement, but the way of object is generally limited to the issuing company city, and funding freeze time is long, cost is relatively high.
 
The above several ways are early offline distribution way, although can absorb incremental capital, attract social idle funds to enter the secondary market, but they are much more widespread distribution link, high subscription costs, social work, the problem such as low efficiency and operational risk is not easy to control. Along with society's progress and the development of the securities market and its related technologies, the off-line distribution has been gradually withdraw from the market.#p#分頁標題#e#
 
4, on the Internet
 
In 1994 China began to use stock exchange trading system of issuing new shares, which issued to the Internet, the Internet issue has two ways: on the Internet for distribution and pricing issue on the Internet.
 
1. Surfing the Internet for
 
Dutch Auction (Dutch Auction), investors through trade within a specified time
 
To bid for the computer trading systems, after the purchase, bidding by the exchange system, based on the principles of price and time preference, produced by the high buy low subscription winners and the actual price, and the lowest price for the price to purchase success. This issue opens the Internet issue in the future. But the way information transparency is poor, too many uncontrollable factors, coupled with the development of China's securities market has only just started, the size of the market is still small, the supply and demand imbalances, issuing vulnerable to bid up the price, so investors take big risks, so the 1994 ha shirble 3 stocks such as hasn't been used after trial. At that time all aspects of China's securities market conditions are still extremely mature, really is not suitable for use, with the highest marketization issued bidding mechanism.
 
On June 10, 1995, the country's first IPO bohai chemical online pricing issued by the company. Lead underwriters in accordance with a predetermined price will be the underwriters all input lead underwriters in the exchange of shares in a new account and investors through exchange purchase system within a specified time for payment of the purchase, the way to reduce the distribution cost and convenient, after April 1998, most of the new issues are on the way.
 
5. Placement to legal persons and the way of combining the Internet issue
 
On July 28, 1999, the CSRC regulations: the company's total equity in the company of 400 million yuan of above, still using online pricing, advance payment in full, pegged to the savings. Total amount of equity in 400 million yuan of the following can be used for the average investor Internet issued by the company and the combination of placement to legal persons, in April 2000 to cancel 400 million yuan credit limit, the company issued shares to the legal person can be rationed. Institutional investors participating in placement process including strategic investors, securities investment funds and general legal person. In practice this way of operation process has two modes:
 
(1) make sure to get to the Internet circulation, placement and Internet distribution, respectively, at the same time.
 
(2) to the legal placement, and then the Internet issue. Which is issued by the legal placement results to determine network offering, issuance, and placement and price ratio.
 
In short, the distribution according to the result of the legal person share placement to determine the issue price, and increase the legal person to participate in new investment proportion, to play the professional advantages of institution legal person of enterprise value assessment, make a more reasonable.#p#分頁標題#e#
 
6, value allotment
 
IPO market placement refers to the new issues, to a certain proportion (market value for the first time in proportion to the placement of about 50%) of new shares by the placement on the public into the secondary market investors, investors according to the convert to the market value of the tradable shares can purchase quantity, voluntary subscription of new shares. China's securities market carried out twice before and after the IPO market placement:
 
1. The Internet pricing and combination of placement to the secondary market investors
 
First appeared in 2000, the way of our country securities market of new shares and at that time
 
Purchase and return rate is highest, compared with the secondary market, the primary market with high yield low risk characteristics.
 
It is estimated that about 250 billion yuan of capital stagnation in the primary market specifically for new shares subscription, crowding out the primary market in the secondary market funds, is not conducive to the healthy development of the secondary market. In order to improve the situation and maintain current shareholders' interests, to current shareholders share in the equity division, under the condition of the low level of market pricing of new shares to form the primary market of new shares subscription excess, released in February 2000, the China securities regulatory and try out the measures for the placement of new shares to the currency market investors. When all the IPO companies adopt 50% value allotment pricing purchase, 50% for Internet access, investors hold the convert current stock market value of 10000 yuan a distribution, according to the distribution in the IPO to draw. Due to the trading system load ability is limited, implement the way of new shares are forced to arrange in the day, so the operating costs are relatively high; Especially after the shenzhen stock exchange to suspend the ipo, the shenzhen market value investors are of course unable to participate in placement, so distribution in July 2001.
 
2. To the placement of a secondary market in an all-round way
 
Since June 14, 2001, the holdings of state-owned shares collection of social security fund management interim measures "issued after the deep Shanghai, two cities fell sharply and continue until 1 January 2002, the Shanghai composite index dropped to 1339.2 from 2245.44, so the authorities again introduced market placement, expect to explain buy new money flowing into the secondary market, the primary market to stabilize the secondary market and secondary market investor confidence. On May 21, 2002, the China securities regulatory commission issued the relevant issues about the placement of new shares to secondary market investors supplementary notice (now referred to as "notice"), to cancel the placement of the distribution function to restart the value of the primary market. In June 2002 IPO routon electronic, become the first company to implement all of the secondary market allotment. According to the supplementary notice spirit, caring the interests of small and medium-sized investors, its basic principle is to satisfy the market purchase priority part, therefore, in practice, almost every IPO market value 100% placement. As the process of market value allotment is no freeze funds, investors purchase cost is reduced greatly. However, from the actual situation of the degree of the policy stimulus of the market did not achieve the desired effect, because of the appetite for risk is different, the original hovering in the primary market of subscriptions is not so big to have a higher risk of secondary market, the most out of the stock market, instead causes the amount of the stock market funds to continue to reduce. Such a situation can corroborate from the change of market margin in stock. From a market sale, margin of stock market in 2001 at the peak of $700 billion to less than 260 billion yuan by the end of 2004. For must have a secondary market stock investors to participate in the purchase of new shares, equivalent to set up a new investment explain buy new conditions, is exclude aversive risk investors, deprived of their right to participate in new shares subscription. At the same time, the original issuing company can enjoy the freezing of funds more than interest income turned into lead underwriters for underwriting stocks (due to insufficient funds or leakage match) form, the secondary market returns. To sum up, not only failed to achieve their intended market way of policy objectives, greatly affect the fairness and efficiency of the market, violate the principle of market economy, is not conducive to the overall resource configuration.#p#分頁標題#e#
 
7, the inquiry mechanism
 
1. The division under inquiry subscription shares
 
Inquiry is the high proportion of institutional investors purchase way the issue of common mechanism of stock market, because the investment behavior of institutional investors are relatively rational and high quality, the result of the inquiry subscription is close to the market price, is to address the height difference between primary and secondary market securities of one of the way. China began in November 2001, a trial inquiry explain buy, Beijing hualian heald super became the first USES the distribution company, trying to as a legal person of inquiry mechanism improvement. But the proportion of institutional investors of China's securities market, quality and maturity, and inquiry the applications operating mode is first set after the interval and the bidding price and submitted to the CSRC for approval, and then according to the result of bidding to determine the issue price, thus caused the administrative powers intervene again the status of the market mechanism.
 
2. Under the full circulation of inquiry subscription
 
Front has, in the past to market placement of new shares and there is inherent contradictions between the ipo market. Value of placement is a form of passive allocate shares. Investors hold the shares with investors subscribe for the ipo will, there is no necessary connection between a situation is the market value is higher, investors have thus allocated to new shares, but the lack of subscribe intend to give up, accordingly to reduce the other intend to subscribe for the subscription of the investors opportunities; Another case is that investors value lower even did not hold shares but subscription will strongly, can be bound by market capitalisation and cannot meet the demand. Therefore, according to the market value of placement of the subscription amount is not fully reflect the real needs of the primary market, supply and demand mechanism is distorted.
 
Along with the advancement of equity division reform, the shares of listed companies will gradually into full circulation, the basis of market value allotment system will cease to exist. Also as mentioned earlier, issuing market value allotment and market obvious conflict, so the stock fund subscription system, is the inevitable requirements of reforms to the present stage. So on May 17, 2006, the China securities regulatory commission issued the first public offering and listing management regulations (draft) ", decided to cancel the value allotment and recovery system of subscriptions. Fund subscription investors initiative behavior, the judgment of the company and price for the issuance of investors according to the analysis of the decision to subscribe number, fully embody the investors subscribe to form the real demand for new shares, is conducive to form normal supply and demand, to play the role of market pricing mechanism. At the same time, the fund subscription as investors pay the share proceeds in full subscription when demand, therefore, have not received purchase opportunity and not subscribe happens, greatly reduces the underwriting risk. Recovery fund subscription, which not only provides the market distribution conditions, but also to new money into the stock market. Because of funding and investment preference characteristics, part of the capital for yield stability and safety of recovery funds purchase new shares for the part of investors to provide investment opportunities, attracting new money into the stock market, beloved increase money supply, the condition of full circulation is conducive to the long-term healthy development of the stock market. In the reform of non-tradable shares, and other basic market system construction has made significant progress, with new IPO explain buy new measures for the administration of recovery funds, is not the simple repetition of original way, but to adapt to the development of capital market background and the basic condition of changing, the demand of accelerating issuing market reforms, is the inevitable choice of distribution mode innovation under the new mechanism.#p#分頁標題#e#
 
CHAPTER4 authorization under the ipo pricing financial factors analysis empirically
 
Ipo pricing system in China has experienced from administrative pricing to the gradual process of marketization reform. By the securities regulatory commission for qualified p/e ratio of administrative pricing way, at the time of the conditions, it should be said that the success of China's stock issuing and has played a positive role in the development of capital market, but with the development of capital market, our country gradually with the issuing the market pricing conditions. Adopt the way of inquiry pricing on the new pricing, should have two conditions: (1) in the capital market has a large comprehensive strength strong securities underwriter, and have to evaluate the value of the company of professional talents; (2) has created a lot of institutional investors, the institutional investors have higher professional valuation and market analysis judgement. By the end of 2004, China's securities market development already have these two conditions, and on January 1, 2005 promulgated by the end of execution of the several problems about ipo trial inquiry system notice is timely. Under the inquiry system, as an object of inquiry of institutional investors will no doubt play a more important role, on the one hand, they take a to issuance of enterprise valuation and quotation, at the same time to offer to purchase their own. This chapter will study under the new issue of pricing system, which financial indicators in institutional investors bid to play a more important role, has a more important influence on new pricing.
 
The first section research questions and research methods
 
A definition of the main research problems
 
In this chapter mainly studies two problems:
 
(1) the financial statements of the financial indicators to measure enterprise value as an important role in value terms in the IPO pricing?
 
(2) the shares issued after the implementation of authorization, IPO pricing on the change and its effect of inspection?
 
On March 17, 2001, after the implementation of stock issuance of authorization, IPO pricing mainly experienced three stages: the first stage is on March 17, 2001 to November 29 (in the distribution of lianhua synthetic for boundary), the main characteristic of this stage is the "securities law" after carrying out, issued by the issuer and underwriter agreement price, IPO price of p/e ratio is controlled by the original administrative pricing transition to let go of p/e ratio of market-oriented pricing. The second stage for November 29, 2001 to January 24, 2005 (from lianhua synthetic start to the end of huadian power international), the main characteristic of this stage is phase of IPO pricing is controlled by a highly marketable back on p/e ratio, IPO should not exceed 20 times earnings. The third stage, marked by inquiry first wave of huadian power international issue until now. The phase of IPO pricing is mainly adopts the international popular roadshow inquiry method, in theory, with strong professional assessment of quality of institutional investors to participate in, by the way of IPO price should be more reasonable.#p#分頁標題#e#
 
2. The choice of research method
 
For the study of relationship between financial indicators and pricing, it mainly adopts principal component analysis (pca), followed by multivariate regression analysis; IPO pricing change effect inspection inter-temporal comparative analysis, analysis of financial indicators reflect the degree of difference at different periods. Specific ideas are as follows:
 
Firstly the principal component analysis (pca) is adopted to reflect the fundamental value of a company's financial indicators to extract the principal component; Secondly, respectively, with the initial return of IPO price and its debut as the dependent variable was carried out on the principal component regression analysis, so as to examine each principal component explanation for IPO issuance price level and its pricing changes at different stages to explain degree of dynamic change.
 
The second section of the sample selection and data sources
 
This chapter selected to implement authorization (on March 17, 2001) and on July 1, 20007 listed on the Shanghai and shenzhen stock exchange issued 404 IPO shares as the research object. The research questions of this chapter is the IPO issue price and the company's basic financial indicators, the relationship between the main purpose is to want to know which financial index plays a main role in the stock IPO pricing. In general, the IPO price and the relationship between the financial index by different industry there is a big difference, so do not need to the financial sector's IPO companies do special consideration or eliminate. The distribution of samples during the IPO companies each year are as follows:
 
(FIG.)
 
In the third quarter financial impact factor of IPO pricing and variable selection
 
The determination of IPO price should reflect the intrinsic value of the company, the company's intrinsic value reflected in the profit ability, operation ability, development ability, capital formation, liabilities ability, etc. Although the IPO pricing and market environment, the national macroeconomic situation and the development of the industry, and many other factors, also with the CSRC is to determine the way (whether provisions p/e ratio), however, when the IPO pricing, considering the company fundamentals related financial indicators is inevitable. Book selection of relevant financial indicators as shown in table 4-1:
 
Summary table 4-1 main financial indicators
 
Scalar code variable to explain a scalar variable to explain
 
P0 price V14 asset-liability ratio
 
V1 assets V15 accounts receivable turnover
 
V2 V16 indebted amount inventory turnover
 
V3 shareholders V17 return on equity
 
V4 equity V18 net profit per share
 
V5 advocate business wu income V19 net assets per share#p#分頁標題#e#
 
V6 V20 main business profit growth rate of total assets
 
V7 operating profit V21 growth rate of net assets
 
V8 profit total V22 main business revenue growth
 
V23 V9 net profit growth rate of main business profit
 
V10 business activities generated cash flow net V24 operating profit growth
 
V11 net increase in cash and cash equivalents V25 profit growth
 
V12 liquidity ratio V26 net profit growth rate
 
V13 quick ratio
 
The fourth quarter, the empirical results and its analysis
 
A principal component analysis and factor definition
 
Due to the intrinsic value of the selected 26 on behalf of the company's financial indicators have a certain correlation between each other, a bit of a high correlation between indicators, some indicators between highly relevant, if use these indicators directly for regression analysis, on the one hand, too many variables, on the other hand, there are serious multicollinearity, in order to avoid this phenomenon, this ZhangCai by principal component regression method, on the one hand, have the effect of dimension reduction, with a few principal components to represent multiple financial index information, on the other hand, using the principal components to avoid the presence of multicollinearity. According to the research design, with the aid of SPSS statistical software, this chapter on the sample during the three stages of separately carried on the principal component analysis, the results as shown in table 4-2:
 
Table 4-2 principal component analysis result table three phase
 
The first phase of the second stage of the third stage
 
Characteristic value of variance contribution rate of the cumulative contribution rate variance contribution rate of the cumulative contribution rate eigenvalue variance contribution rate of the cumulative contribution rate
 
Y110.50240.39340.39310.24939.42039.4209.26335.62535.625
 
Y23.89214.97155.3642.84210.92950.3495.12919.72655.352
 
Y33.14512.09567.4592.2608.69259.0411.9067.33362.684
 
Y42.5919.96477.4232.1238.16767.2081.8907.26969.953
 
Y51.7746.82484.2481.6316.27473.4821.7706.80776.760
 
Y61.7666.79291.0401.2304.73278.2141.1474.41181.161
 
Y7 1.1304.34782.5621.0373.99085.161
 
Y8 1.0604.07786.639
 
Book selected 6 principal components, the first phase of the cumulative contribution rate reached 91.04%, namely the six principal components extracted from the original 91.04% 26 financial indicators of information. The second phase six principal component extraction 26 financial index 78.21% of the original information. The third stage 6 principal components to extract the information of the original financial index 81.17%. In order to define for each principal component to reasonably, make each principal component area to separate as much as possible, the maximum variance, the results such as table 4-3 and table 4, table 4-4-5.#p#分頁標題#e#
 
As can be seen from the rotated principal component matrix, the first phase of the Y1 mainly represents the V9, V6, V7 and V8, V3, V4, V1, V2, according to the features of reflection index can be summarized as the profits and net assets principal component; Y2 mainly represents the V21, V17, V18, mainly reflects the profit ability, the main composition is defined as the composition of profit; Y3 mainly represents the V25, V24, profit growth; Y4 mainly represents the V20, V22 for asset growth; Y5 mainly represents the V13, solvency; Y6 mainly represents the V19, net asset per share.
 
Table 4-3 principal component matrix (first phase)
 
Rotate the away component matrix (1)
 
Extraction method, principal component analysis (pca).
 
Rotate rotating methods: maximum variance.
 
Table 4-4 results show that in the second stage, Y1 main index reflecting profits and net assets; Y2 profit growth; Y3 assets for the enterprise growth; Y4 as assets increase mental abilities; Y5 reflect the solvency; Y6 main business profit growth. From the point of principal component factors, each factor's response to profit word table is more fully.
 
The third stage of financial index to the result of principal component analysis and the first stage, second stage basic same, Y1 factor for profits and assets; Y2 for profit growth factor; Y3 roe; Y4 factor for the increase of cash and cash equivalents; Y5 for mainly solvency; Y6 for asset management capabilities.
 
Second, the principal component regression and its explanation
 
In order to further reflect the influence of the intrinsic value of IPO price financial indicators, respectively in each phase extraction of six principal component score as the dependent variable, the IPO price (IPO first-day market price) as the independent variable to establish regression model, the results show that the different stages of the influence factors of the IPO price is different, but profitability is significant in the three stages.
 
First stage:
 
Regression analysis results show that 4 to 7 (see table), in the fully open issue the p/e ratio of the first stage, the main profitability Y2 and represented at the IPO price growth of Y4 explanation. Basic completely let go, because the phase p/e ratio can be seen from the figure 4-2, different company's IPO price difference is obvious, but the basic around the 40 times earnings. From the point of the fit of the regression equation of 0.69, this stage basic reflects the intrinsic value of the sample company IPO pricing, also conforms to the traditional view of the stock price of the stock pricing theory by the dividend and the growth of the basic ideas.
 
For the return of the IPO first-day market shows that the secondary market pricing of new shares is not only considering the profit ability, and considering more factors than the primary market, such as asset scale and solvency indicators. Secondary market pricing of new shares of the fit of the MODEL - PI of 0.841, than the same phase price regression fitting degree is high, this shows that the secondary market more to consider the factor of the company's intrinsic value.#p#分頁標題#e#
 
The second stage:
 
The second phase of the return of the IPO price show that 4 to 8 (see table), their PO is mainly composed of Y1, Y3, Y4 to explain, represent the net assets and profits, profitability and asset management capabilities, but still is the interpretation of the more significant factors for profitability of principal component Y3. The main issue with this phase of the control price for 20 times earnings. From figure 4-2 we can see clearly that the stage most the price of the stock is basically a 20 times earnings. The fit of the model - PO was 0.423, compared with the first stage, fitting, it shows that the control of the p/e ratio limit in the IPO pricing, to better reflect the intrinsic value of the company itself, and the limit in response to the net profit per share.
 
Market prices for its debut the regression results show that on behalf of the profitability of Y3 still plays a more important role in the model, at the same time, the market is also considering the degree of asset scale (Y1), liabilities (Y5). Although the secondary market to consider more reflect the index of the intrinsic value of the company, but the fit of the regression equation of the low stage model - PO, this phase the sluggish stock market as a whole, there may be value reflect the integrity of deviation to the company.
 
The third stage:
 
Can be seen from table 4-9 analysis results, the implementation of inquiry system of the third stage, the IPO pricing to reflect more than the first two stages reflect the intrinsic value of the company's principal component index, on behalf of profitability and profit growth, the growth rate of assets and asset management capabilities of Y1, Y2, Y3, Y4 is entered the regression model and significant. The fit of the regression equation of growth from the second phase of 0.423 to 0.423. Can be seen from the figure 4-2 in the third stage, the IPO price not as the second phase uniformity are close to 20 times earnings, but a change in about 30 times earnings, the changes could reflect the differentiation of the intrinsic value of the company.
 
Market price regression results show that explain the main component of the main price and profit and growth (Y2, Y3) and asset management capabilities (Y6), but the R side of the model is still not high, not only is lower than the regression equation of the stage with the PO, and lower than the first stage of PI regression equation, the third stage no better reflect the market price reflects the intrinsic value of the company's financial indicators. In this stage, the whole stock market by the reform of non-tradable shares positive expectations, excess liquidity, revaluation of new accounting standards on asset prices and currency devaluation, the influence of such factors as the secondary market price from the company real price.