Research On The Effectiveness Of Listing Chinese Enterprises Based On Different Stock Issuance Systems ——A Case Study Of Wantai Bio And Microchip Bio

The reform of China’s stock issuance system did not happen overnight,but has undergone several changes from the administrative approval system,the approval system to the registration system.the registration system,which will be implemented in 2019,will first be piloted on the Science and Technology Venture Exchange Board and further extended to the Growth Enterprise Market,while the approval system will remain in place on the main board market as of 2021.The parallel stock issuance system between the approved system and the registration system provides a new perspective for the study of the listing effect of Chinese corporate.In addition,the Science and Technology Innovation Board（STIB）implements the registration system,provides a more liberal financing environment for China’s high-tech enterprises,including biopharmaceutical enterprises,due to its strong attributes of science and technology innovation.In this paper,we select two biopharmaceutical enterprises which made their initial public offerings under the approved system and the registered system respectively,and compare the listing effects of the two.The paper generalizes the development process of China’s stock issuance system,and then compares and analyzes the capital market performance in terms of initial public offering data,IPO price suppression and issue P/E ratio,performance on the day of listing and subsequent stock price movement,turnover rate and capital utilization efficiency,and non-financial performance indicators in the field of government subsidies and R＆D investment for the main board with the approved system and the science and technology innovation board with the registered system,respectively.In this paper,two companies in the biotechnology industry,Wantai Bio and Microchip Bio,are selected for the study,with the former listed on the Main Board under the approved system and the latter listed on the KCI Board under the registered system.The factors that may be considered as influencing the choice of listing boards are evaluated,and the listing effects of the enterprises are then studied.By analyzing the listing effects of the two selected case companies in terms of capital market performance and non-financial performance factors,this paper generalizes that,in the aspect of the capital market performance,the Main Boardlisted companies under the approved system are able to obtain a higher number of new issues and net proceeds,but are limited by the pricing mechanism of the Main Board listing rules of up to 23 times static P/E ratio in the pricing mechanism of the Main Board listing rules,they are more effective in terms of issuance price and issuance P/E ratio than the STB under the registered system.However,due to the pricing restriction of up to 23 times static P/E ratio in the pricing mechanism of the Main Board listing rules,the IPO price and P/E ratio are lower than those of the STB under the registration system,but it also means that the IPO price suppression rate of the STB under the registration system is much higher than that of the Main Board under the approval system.In terms of post-IPO market performance,the STB listing rules break the IPO limit of 44% of the issue price,so STB listed companies have a higher turnover rate after listing,reflecting better market liquidity.In terms of nonfinancial performance indicators,STB-listed companies under the registration system are more likely to receive government subsidies to promote technological innovation and new product development after listing;in addition,STB-listed companies under the registration system have the advantage of a unique technological innovation segment,with a higher ratio of R＆D personnel and R＆D expenditure to operating revenue than main board-listed companies under the approval system.Finally,this paper combines the previous analysis to propose some reference factors for the listing effectiveness of Chinese firms facing different stock issuance regimes,including consideration of initial public offering data and post-IPO market performance,IPO price suppression,turnover rate and government subsidies.