Influence Of Key Customers And Suppliers On IPO Underpricing

In the 1990 s,the fifth plenary session of the 14 th central committee put forward the transformation of the economic system from the traditional planned economy to the socialist market economy,and the opening of China’s stock market in the early 1990 s became part of the transformation process.IPO is the main way for enterprises to go public and enter the stock market.With the development of the capital market,it is also in constant reform.From the strict system examination and approval control to the market-oriented approach,IPO underpricing is also born.Although the IPO underpricing phenomenon exists widely in the world scope,but whether it is compared with the mature capital markets of developed countries,or with the other developing countries whose overall development is worse than our country,the IPO underpricing degree of our stock market is more severe.On the one hand,it directly affects the healthy growth of the Chinese stock market,on the other hand,it will indirectly further harm to the healthy development of the whole national economy.In order to further understand the influence of key customers and suppliers on IPO underpricing,thus to put forward the specific effective measures for reference to restrain the high IPO underpricing,this paper compares and analyzes the relationship between key customers and suppliers and IPO underpricing,explores the countermeasures from the perspective of customers and suppliers to restrain high IPO underpricing.Two representative enterprises in the industry are selected for comparative analysis,in order to put forward some effective measures to apply to the whole market,and provide the reference for suppressing high IPO underpricing of the Growth Enterprise Market and realizing the healthy development of capital market in China.Taking case analysis as the research method,this paper selects Yuebo Power and Xinrui Technology as two companies to study the impact of customers and suppliers on IPO underpricing.Firstly,this paper introduces the development process of China’s IPO system and pricing system,analyzes the current IPO underpricing phenomenon in China,and discusses the theoretical basis of IPO underpricing.Then,it analyzes the influence and mechanism of key customers and suppliers on IPO enterprises and IPO underpricing from three aspects of stability,concentration and relational transactions.Secondly,it introduces the background of Yuebo Power and Xinrui Technology,as well as the situation of major customers and suppliers,and expounds the measurement method of IPO underpricing rate in this paper.Finally,according to the data of key customers and suppliers of Yuebo Power and Xinrui Technology,this paper discusses from the three aspects of stability,concentration and relational transactions,and makes a comparative and in-depth analysis of the reasons for the inconsistency between the empirical conclusion and the result of case data with calculated IPO underpricing rate.Through the case study,this paper concludes that the stability,concentration and relational transactions of the large customers and suppliers influence on the company’s IPO underpricing,but in terms of stability and relational transactions,the data results of Yuebo Power and Xinrui Technology are inconsistent with the existing research conclusions,reflect to the empirical results can’t reflect all of the specific conditions of the individual companies.The reasons for the inconsistency include that stable big customers and suppliers are more able to send good signals to the outside world,which leads to oversubscription,the calculation of IPO underpricing rate and the measurement of relational transactions are not necessarily accurate,the change of big customers and suppliers will weaken the role of relational transactions,and the degree of decentralization of control is different and so on.In addition,some suggestions are put forward from the three aspects of policy system,IPO enterprises’ own management and market investors,so as to provide references for restraining IPO from high underpricing and healthy development of capital market.