Study On The Mechanism Of Initial Public Offering And Pricing In GEM

The Growth Enterprise Market officially opened in Shenzhen Stock Exchange on October 23,2009 after almost a decade of preparations and On October 31 the first batch of 28 new shares listed on GEM at the same time. The market Stages in the gradual expansion. The GEM mainly services in emerging industries, especially high-tech industries, and makes up the shortcomings that the enterprises are temporarily unable to directly raise capital through the board. Corresponding to the Main Board, it s an effective complement to the Main Board. On the one hand, the introduction of the GEM has met the high-speed development in the corporate finance needs; on the other hand it can gather the social idle funds to the capital market to support the development of enterprises and improve the utilization of capital.IPO in the GEM is the behavior of exchange-traded that a high-growth small and medium enterprise initially and publicly offers stocks and trades at the Exchange. Because of the innovation of industry and business in which GEM enterprises are, it is difficult to find the comparable companies with the same industry, the same stage of development to as a pricing reference objects. Meanwhile, the operating time of company is shorter. At the same time most enterprises is at the initial stage and have not experienced the development of the industry cycle and have less historical operating data. It is also difficult to accurately assess the future development of enterprises. In addition, it also involves the issuing companies, managing underwriters, investors and regulators and other stakeholders in the pricing process. Because of information asymmetry, the underwriters to protect themselves, the irrational behavior of investors and the offering pricing system and other factors, the efficiency of IPO is reduced. At present, China's Growth Enterprise Market is gradually pushed and in the trial and error period. Whether the stock can be in a reasonable price in the primary market has related to the stability and development of the secondary market or the capital market, thus reasonably priced the IPO of GEM is particularly important.This paper has systematically expounded the existing IPO methods, analyzed their scope of application, combined with the characteristics of the growth enterprise market and listed companies, from both historical and future to analyzed the internal and external impact determinants of IPO pricing by analyzing the main stakeholders on the interactivity of the IPO pricing process and the growth factor of listed companies. By means of the multivariate linear regression on the determinants and IPO price, the multi-factor regression model of IPO pricing has been proposed and the impact extent of the determining factors on the IPO price has been analyzed. The model is based on the value of investment ideas for investors to provide a reasonable basis for judging the value of the stock, and has certain theoretical and practical significance for determining a reasonable mechanism of IPO in our GEM and, improving the efficiency of IPO, balancing the interests of Stakeholders and optimizing resource allocation.