Evidence Study Of IPO Pricing In China A Share Market Based On The Method Of Cluster Analysis

With the Chinese stock market's development, specially, a series of reforms execution, IPO pricing, as an essential part of the run of the market, will influence the efficiency of the entire stock market. IPO (Initial Public Offerings) is a key approach for enterprises to raise capital, a good opportunity for investors to increase new investment and the beginning of supervision for supervisors. So, the veracity of IPO pricing plays an important role on optimization of capital distribution and on regular operation and long-term development of China's capital market. The pricing of IPOs has become one focus in the current theory and the practicing field. This paper first elaborated and analyzed the main IPO pricing theories -intrinsic value theory and the factor model, and pointed out the deficiency of the theories.Then Chinese IPO system vicissitude and the offering pattern evolution were introduced and every stage has been discussed. In this foundation, the factors in three aspects that affect the IPO pricing include the intrinsic factors, the external factors and the benefit correlations, and the relations between these factors and the IPO pricing were systematically studied. By the theoretical analysis, the factors were selected inside and outside that influenced the IPO pricing, and the supposition was made, at the same time the Shanghai A share stocks released in the recent 4 years were selected as the research sample. Then the linear return method was used to make the analysis, discovered the primary factors affecting the IPO pricing, and made the corresponding explanation. Finally, the pricing research concentrated to the industry. The primary factors got by linear return analysis were as the cluster factors, and an industry (this paper to choose electric power industry as a sample) was selected as a sample. Then this sample was analyzed by the methods of cluster and discriminant. It will establish the system to decide the IPO pricing in the industry and will help the IPO companies to give a reasonable price.Because of the influence factors in many levels and aspects, IPO pricing is a complex dynamic process. It makes the research work more difficult. The research has provided some instruction for IPO pricing from the theory and the practice.