Research On Chinese Public Company's Ipo Pricing Mechanism And Underpricing

IPO is the process of the first time the company sold shares to the public to raise funds, then listing on the stock exchange. As an important means of financing, the level of efficiency of the IPO has a significant impact on the development of the company. IPO underpricing is considered to be an effective indicator to measure the efficiency of IPO. IPO underpricing is a common problem in the world stock market, but China's underpricing is much higher than other countries, and there are great differences between different sections of the domestic stock market.First, this paper reviews the domestic and international research on IPO underpricing. In the review process, this paper argues that comparison is an important means of finding difference and the reason of difference. Book-building method is implemented in many countries, while there is a huge difference effect. Based on this, the article first discusses whether the book-building method is suitable for the use and development in China. At the same time, there is huge difference between different sections of the domestic stock market, and based on this, the article compares Ashare and GEM to draw some inspiration to low degree of underpricing.Second, introduce the method of valuation of the company, the existing three most common valuation methods:the present value valuation method, comparable to the Company Law and option method, based on pricing IPO valuation of the company, different types of companies should use different valuation methods in order to better reflect the value of the company; There are four major world pricing:pricing a fixed price, total bid inquiry system, the auction mechanism and mixed mechanisms, now commonly used in various countries is a mixed mechanism. Many Western scholars through the underpricing of IPO raised a number of theories to explain this phenomenon, the "winner's curse", the efficient market hypothesis and the theory of signal display, all from a different point of view to explain IPO underpricing The IPO has experienced development process as follows, the market from government control to then the system of government control until the book building method has come to the market re-implementation, and make preliminary analysis and evaluation on the history evolution and compare different pricing method.Third, this article selects IPO companies of Ashare and GEM as sample to make an analysis. This paper argues that China's securities market should be a mode with the high initial market entry, the high control and heavy responsibility in the following time to the participant.