Affected by the adjustment and upgrade of the initial public offering (IPO) listing system, as of this year, only 41 companies have gone public in the A-share market, marking a new low in the past decade. The last time there was a similar number was in the first half of 2014.
Against the backdrop of a scarcity of new shares, the returns from IPO lotteries have significantly increased compared to the same period last year, with only one new share breaking issue this year, resulting in a breakage rate of 2.4%, which is a substantial decrease of 16 percentage points from the same period last year.
The initial public offering price-to-earnings (P/E) ratio has declined across the board, with the STAR Market (Science and Technology Innovation Board) seeing a drop of 60%.
According to data from Wind statistics by First Financial, in the first half of this year, only 41 companies went public for the first time in the A-share market. Among them, there were 31 newly listed stocks on the Shanghai and Shenzhen stock exchanges, a drop of over 70% compared to the 131 stocks in the same period last year, including 11 on the main board, 7 on the STAR Market, and 13 on the Growth Enterprise Market. The total funds raised by the initial public offering of these 31 new stocks amounted to 27.534 billion yuan, a decrease of over 80% compared to the 159.468 billion yuan in the same period last year.
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The company with the highest total funds raised in the initial public offering this year is Yongxing Shares, a main board-listed enterprise, which is an environmental protection company invested by Guangzhou Huan Tou Group, a holding company of the Guangzhou Municipal Government. It is the sole investor and operator of the municipal solid waste incineration power generation project in Guangzhou, with a total fundraising amount of 2.43 billion yuan.
Next is Ai Luo Energy, a company listed on the STAR Market, which is a provider of photovoltaic (PV) energy storage systems and products, focusing on R&D in the energy storage field, mainly providing PV energy storage inverters, energy storage batteries, and grid-connected inverters to overseas customers. Ai Luo Energy planned to raise 808 million yuan, but actually raised 2.226 billion yuan, exceeding the planned amount by as much as 1.4 billion yuan.
In addition, the total funds raised in the initial public offering of C Damei and Nova Star Cloud are also relatively high, both exceeding 1.6 billion yuan. Among the 31 listed companies, 7 have a total fundraising amount in the range of 300 million to 400 million yuan, while Hui Cheng Vacuum's initial public offering raised only 305 million yuan.
Regarding the initial offering price, out of the 31 stocks, only one is above 100 yuan per share, namely, the Growth Enterprise Market-listed company Nova Star Cloud. In contrast, there were 6 stocks priced above 100 yuan per share in the same period last year.
Nova Star Cloud has the highest issue price of 126.89 yuan per share, with an initial public offering P/E ratio (diluted, the same below) of 21.93 times, and the industry P/E ratio at the time of the initial public offering was 30 times. The company is a leading domestic manufacturer of display control devices.In terms of the initial public offering (IPO) price-to-earnings (P/E) ratio, the average P/E ratio for the 31 newly listed stocks was 30 times, which is lower than the average P/E ratio of the industry at the time of listing. Specifically, the average P/E ratio for the mainboard was 26 times, for the STAR Market (Science and Technology Innovation Board) it was 33 times, and for the ChiNext board, it was 22 times. Compared to the same period last year, the valuation of newly listed stocks this year has declined across the board. Among them, the STAR Market saw the largest decrease of 63%, followed by the ChiNext board with a 52% decrease, and the mainboard with a 7% decrease, with only 10 companies having an IPO P/E ratio higher than the industry P/E ratio.
The first half of the year was a windfall for IPO investors due to low valuations and scarcity of targets. As of now, among the aforementioned 31 newly listed stocks, only one, Shanghai Hejing, broke issue on the first day, with an issue price of 22.66 yuan per share and a total fundraising amount of 1.5 billion yuan, falling 6.31% on the first day of listing.
There were signs behind the break issue. In 2023, which is the first fiscal year after Shanghai Hejing's listing, the company's revenue and net profit both declined. The operating income was 1.348 billion yuan, a year-on-year decrease of 13.38%; the net profit attributable to the parent company was 247 million yuan, a year-on-year decrease of 32.35%. The company stated that the main reasons were the sluggish global economic environment, the cyclical downturn in the semiconductor industry, a decrease in the company's orders, a decline in capacity utilization leading to increased costs, and a decrease in product gross margin. Additionally, the financial report for the first quarter of 2024 showed that Shanghai Hejing's revenue and net profit fell again, with operating income of 249 million yuan, a year-on-year decrease of 28%; the net profit attributable to the parent company was 18.27 million yuan, a significant year-on-year decrease of 69.22%.
Apart from Shanghai Hejing, the remaining 30 newly listed stocks all recorded gains on the first day, with 17 stocks more than doubling on the first day, accounting for 55%, compared to only 11% in the same period last year. Five stocks more than tripled on the first day, with Hui Cheng Vacuum increasing by 752.95% on the first day, and Li An Technology increasing by 348.76%.
It can be said that the first half of the year was an unprecedented "harvest year" for IPO investors. If sold at the closing price on the first day of listing, 20 out of 31 newly listed stocks made a profit of over 10,000 yuan per lot. Even for Shanghai Hejing, which broke issue on the first day, the loss per lot was only a few hundred yuan.
Nova Nebula topped the "big meat sign" list for the first half of the year, with a profit of 128,600 yuan per lot. It is quite regrettable that due to the high issue price of the stock, many retail investors chose to give up purchasing, resulting in a renunciation amount of 520 million yuan.
In addition, C Dream's first lot could profit 77,000 yuan, Li An Technology's first lot could profit 49,000 yuan, and Hui Cheng Vacuum's first lot could profit 46,000 yuan, all of which are "dividend stocks" for IPO investors.
At the same time, the subsequent performance of newly listed stocks this year has also been quite good, with only 3 out of 31 stocks currently breaking the issue price.
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