Companies’ Asset Quality And IPO Pricing On GEM

Since the opening of the GEM, there have been hundreds of companies successfully listed.However, the frequent occurrence of underpricing and break means the pricing efficiency is not so high as we expect. All of these have seriously affected the normal and healthy development of the GEM.Moreover, It is also a challenge to the stability and development of capital market. Therefore, it is particularly important to improve the pricing efficiency. Assets are not only the foundation of enterprise but also the basis of pricing. Asset quality is a manifestation of corporate profitability, solvency, development ability. Therefore, to clarify the relationship between asset quality and IPO pricing is of great significance to improve the rationality of pricing.The concept of the paper is:Firstly, based on the asset quality and IPO pricing, review and summarize the relevant literature at home and abroad; Secondly, based on the GEM IPO system, analyze the factors affecting the IPO pricing;Thirdly, we select a sample of 355 companies from GEM, set up an asset quality evaluation system, and evaluate the assets quality of the sample before and after the issuance of the enterprise;Fourth, based on the analysis of the GEM IPO system, we establish the IPO pricing model, analyze the relationship between the asset quality and the IPO pricing;Finally,based on the research above, we put forward the suggestion on the limitation of the asset quality of the GEM and the IPO pricing.Based on the IPO pricing model established above, we found that asset quality score of sample from GEM had significant and positive influence of the IPO pricing. The empirical results are consistent with the hypothesis of this paper.It means that the pricing of GEM not only reflects the asset quality of listed year but also reflects the expected future operating conditions. However, from the analysis of the IPO pricing system, the issuer has not considered the quality of the assets,moreover,the quality of the assets is not included in the IPO pricing model. The empirical result is caused by Inquiry System.Therefore, in order to further improve the pricing efficiency of the GEM listing corporation,we should clarify the status of the asset quality in the IPO pricing process.In addition, the regression results show that the impact of asset size, industry as well as underwriter reputation on the price of the GEM IPO pricing does not match the Main Board and Small Board. This means that the related systems, venture capital, the issue of intermediaries of GEM should be improved.Finally, the evaluation results of the asset quality of the GEM show that there are some defects in the assets of listed companies on GEM. We also put forward some related suggestions.