The Initial Public Offering Of Stock Pricing Research

The paper discusses the pricing in stock initial public offering (IPO) from the value evaluating aspect.EPO is the first step when a stock corporation turns from minority shareholders into the listed corporation, and the origins of secondary security market. Pricing is the crux of IPO. Few scholar studies about this matter in thesis, while the reciprocate rate on the first listed day is as high as 136-235 percent in our EPO market, which exceeds the average level of 10 percent in the oversea fledged market. Weak pricing ability leads much economic bubble and aggravates the ups and downs in stock market. To some extent, IPO is the leverage, adjusting earnings in primary and secondary security market, and coordinates the vantage division among take-partner in market. The history and current situation of IPO in China is reviewed, sampling all of the stock whose issuing mode is IPO from 1990 to August 2001, and the under pricing reason is analyzed. As a result: under pricing in IPO consists in everywhere, and does not conflict with the principle of value investment.All kinds of factors was analyzed in the paper from issuer and market viewpoint, and the index of issuer quality evaluate system is established preliminary. Mr. Zhang Wei Ying's conclusion is used in the IPO pricing under information asymmetry to expound the influence of IPO pricing when participants play games. "The value of asset embodies in the earning", the major factor affecting the intrinsic value of IPO stock is future cash dividend and the discount rate. The factor effecting shareholder's cash dividend is analyzed from finance analysis, the methodology of calculating cash dividend in simplified condition is expounded by hypothesis. Based on value analysis, five kinds of IPO pricing models were discussed. The case of China Unclear Honghua pricing was discussed both in qualitative and quantitative, by price/earnings ratio model, price/book value ratio model and economic value added model, and the result shows that the pricing ability of models is unanimous after calculation.