Research On IPO Price Discount Of Small And Medium-sized Enterprises In China

The phenomenon of initial public offering (IPO) price discount exists on all stock markets of the world, it also exists on Chinese stock market of small and medium-sized enterprises (SMEs), what's more, the IPO price discount is very large. The common view is that, with the settlement of share segmentation reform in Chinese listed companies, the large IPO price discount would decrease, but the reality seems not to support this view. The large IPO price discount results in lots of problem on the development of Chinese stock market. It has more practical meaning to study on the IPO price discount.Firstly, this paper introduces the purpose and meaning of this research, then it reviews on the studies related to IPO price discount. After summing up the existing studies, this paper traces the evolution of public offering in Chinese stock market.Secondly, based on the studies related to IPO price discount, this paper analyses the trend of IPO price discount in Chinese stock market of SMEs through an example of 165 listed SMEs, the result shows that the share segmentation is not the main reason which leads to the large IPO price discount. However, this paper points out that, the reform of public offering rules is not harmony with the reform of trading system, which leads to the large IPO price discount.Lastly, this paper brings forward some suggestions from the aspects of government, oversighting institutions, investors, and offering companies, which would improve the IPO pricing of listed companies and management of government, and promote the development of Chinese stock market.