The Second Batch Of Enterprises Listed On The New Third Board Of The People'S Republic Of China (Neeq): New Shares Issued By Green Shoe Mechanism With Discount Price

After more than three months, see the enterprise listing selection layer.

On November 9, Wantong hydraulic (830839), an enterprise listed on the new third board, officially "promoted" the selected layer. This is also the 33rd selected layer enterprise born after the first batch of 32 selected layer enterprises were listed for trading on July 27.

From the disk, Wantong hydraulic performance is quite stable, the early trading rose to more than 20% after falling. Since then, the stock price continued to fluctuate, and finally closed at 9.42 yuan / share, up 17.75%, successfully avoiding the shadow of large-scale breaking of the first day of trading of the first batch of selected layer listed companies.

Select layer market sentiment "steady landing"

Compared with the first batch of selected layer listed enterprises, Wantong hydraulic's first day performance was in order. The trading volume of the company's stock was 75.46 million yuan in the whole day, which was far from the previous transaction volume of 846 million yuan on the first day of Bertrand. The data can only fall in the middle reaches of the companies in the plate. In the afternoon, the company's share price was pulled up to 10.1 yuan / share, but then it was back to 9.42 yuan / share. One day 17.75% of the increase in the performance of the first day of new shares in the select layer is relatively prominent, but it can not be described with astonishment.

However, there is no reasonable price jump around the first day, and investors have no intention to drive up the stock price. Yunzhou capital partner Xi Qingqing said.

In Zehao investment partner Cao Gang's view, Wantong hydraulic's first day trading performance is also the embodiment of the market sentiment from fanaticism to rationality after the large-scale breaking of the first batch of selected layer listed companies.

"When the first batch of selected enterprises were listed, the market investors generally predicted that the stock price could double, but most of the stock prices had reached the highest point of the day in the call auction stage. Such high prediction made the investors who participated in the selective layer's new strike failed to sell and gain profits in time.". Cao Gang pointed out that the rational sentiment of the market is also reflected in the pricing of new shares.

Public information shows that, in addition to the direct pricing of Wantong hydraulic, the IPO prices of the second batch of companies entering the selective layer of public offering are close to the bottom price. Among them, the issuing prices of Changfu shares and Dezhong shares were 0.2 yuan and 0.18 yuan higher than the base price respectively, while Northland was directly issued at 6.02 yuan per share. Wantong hydraulic stock issue price is also more than the stock price before the selective listing layer.

In terms of P / E ratio, the P / E ratio of the second batch of companies listed on the selected layer has also decreased significantly. The highest P / E ratio of Wantong hydraulic is just over 18 times, compared with the average p / E ratio of the first batch of companies is more than 30 times.

In addition to the more rational issuance price, the market believes that liquidity is also more concentrated in Wantong hydraulic stocks, ensuring its 17.75% increase in market performance yesterday.

"The total capital stock of Wantong hydraulic is less than 80 million shares, of which the circulating part is less than 15 million shares, which is undoubtedly a small cap stock. In the new third board market liquidity is not abundant, the small cap stock price is naturally easier to pull up. ". Cao Gang said that in addition, different from the first batch of 32 selected level listed companies trading on the same day, only one stock of Wantong hydraulic opened trading on that day, and the liquidity was more concentrated, thus ensuring the stable performance of the company's stocks.

"The overall investment sentiment of the selected layer is in a stable landing, and the low price issue is a sound opening for the whole market development," said Cao Gang.

Green shoe mechanism

As the "pioneers" of the second batch of enterprises listed on the selective level, Wantong hydraulic is also the first enterprise to use the "green shoe mechanism" to enter the public offering process.

The so-called green shoe mechanism, also known as over allotment option, is to adjust the supply and demand of new shares in the short term. When hot stocks are in short supply and share prices rise, investment banks can ask companies to issue more shares. If the new shares break, the investment bank can buy from the secondary market with the funds agreed with some investors in advance, which is equivalent to the investment bank's repurchase of shares, so as to stabilize the stock price and regulate the supply and demand of new shares.

"Although it is not a decisive factor, the introduction of green shoes mechanism does help to stabilize market sentiment.". The above-mentioned Beijing securities companies new third board practitioners said.

Zhu Haibin, chief analyst of the new third board of Anxin securities, also pointed out that the first batch of 32 selected companies showed differentiation in terms of the first day's increase or the secondary market trading in the first month. The green shoe mechanism may protect the stock price fluctuation in the short term. However, he also said that the core factor determining the performance of new shares is pricing. Whether the pricing is reasonable will eventually reflect the supply-demand relationship behind the performance of new shares on the first day.

"When we communicated with the regulatory authorities, we hoped that we would introduce the green shoe mechanism into the corporate IPO to stabilize the price of new shares", the employee said. At present, all four enterprises in the second batch of the selection layer have adopted the green shoe mechanism, "which may become a reserved project for enterprises to enter the selection layer through public offering in the future.".

As for the sponsor institutions, they are also happy to see the introduction of green shoes mechanism in the public offering of enterprises. "The number of over allotment shares increases the number of issuance of enterprises, and when the amount of financing is fixed, the issue price of enterprises is diluted. But investment banks still calculate underwriting fees according to the proportion agreed in the original contract. The increase in the number of new shares issued can also bring real benefits to securities companies. Shanghai area a securities firm investment bank said.

However, the new third board practitioners of the above-mentioned securities companies also frankly said that compared with the first batch of selected enterprises, the enthusiasm of strategic investors to participate in the second batch of enterprise investment has decreased. "It will be more difficult to find a war shot.".

However, the main way to attract a large number of new stocks is to invest in stocks for a short period of six months, and it is still the only way to get a large number of investors to participate in the "lock-in battle". The employee said.

The same market sentiment is also reflected in the new stocks.

The data shows that the number of people participating in the second batch of selected layer enterprises has decreased significantly. In addition to the direct pricing of Wantong hydraulic, there are only 380 off-line investors on average and 417 objects on average. When the first batch of selected enterprises made off-line inquiry, the average number of offline investors quoted was 825, involving an average of 914 placing objects. In terms of online innovation, Wantong hydraulic online subscription multiple was 80.2 times, and the winning bid rate was only 1.25%.

The market's enthusiasm for innovation has declined significantly, but there is still no shortage of investors. Some senior investors in the new third board in Beijing said that they had participated in the second batch of selected enterprises to launch new online, and applied for more than 10000 shares of enterprises with high-quality fundamentals. "Now individual stocks are issued at low prices, as long as the price is low enough, investors can also get a good margin of safety.".

Zhou Yunnan, founder of Beijing Nanshan Investment Co., Ltd., also said that in the face of the second round of innovation of the selection layer, the enthusiasm is not high on the whole. Many investors choose to wait and see or even give up the innovation. However, with the efforts of the issuing enterprises to actively lower the issue price and launch the green shoe mechanism, many investors think it may be an investment opportunity and are willing to participate in strategic investment and offline online play New, and focus on the follow-up low P / E ratio, low price, low market value, low liquidity of the selected layer to hit new stocks.