The New Third Board Selection Layer Starts For The First Time: The Price Is High, Investors Shout "Expensive", "Abandon Purchase" Market Calls For Rational Offer.

New third board selection layer issuance underwriting link has entered a substantive highlight.

According to the distribution and inquiry arrangements of the first batch of enterprises, Yingtai and AI Rong software, the inquiry under the offline roadshow and offline agencies will take place on 23 and 24 June. This is also the first time that the new three board investors have participated in the inquiry of the new third board market.

On the 23 day, Chen Xia, deputy director of the intermediary business unit of the national equity transfer company, revealed that the new third board selection layer started the inquiry, and according to the transfer of shares, investors' quotations were more positive. The two enterprises began to inquiry, marking the new three panels selected layer of public issuance into the sprint stage.

However, the new three board initial inquiry, brokerage pricing and investor inquiry are the first time, before the A share no Internet inquiry experience investors are inevitably inexperienced, so there are many differences in the price of the market.

Price Divergence

In twenty-first Century, the economic report reporters got the first two enterprises' price reports respectively. From the price range set up, the prices of the first two enterprises were higher than the market expectations, which also led to the divergence of market quotations.

Yingtai biological sponsor brokers offer a price range of 5 yuan -9.42 yuan, and AI Rong software, the recommended broker quoted price range of 29.93-35.94 yuan.

After this price appeared, some investors in the market cried out. Huang Pu, a senior three board investor in Beijing, told reporters: "Ying Tai's biological price range is too large to give investors little reference. AI Rong software and its secondary market closing price difference is not big, the valuation multiplier is not low, and this is the new price before we expect to have a big difference.

Taking AI Rong software as an example, with reference to historical prices, its pricing has a significant valuation premium. AI Rong software was listed on the new third board in March 10, 2015, the issue price is 10 yuan, the highest closing price is 138 yuan, and the lowest closing price is 3 yuan. And the highest price and the lowest price appear within one month, which is a period of price fluctuation, and the latter price tends to be stable.

Since then, the company has gone through 3 private placement, issuing price of 21 yuan (November 28, 2015), 16.2 yuan (April 1, 2016) and 12.3 yuan (October 26, 2016) yuan, corresponding to 2014 EPS0.76 yuan, 2015 EPS0.50 yuan, issuing price earnings ratio is 27.6, 32.4 and 24.6 times respectively.

Corresponding to the above historical price is not difficult to see, AI Rong software set the price range slightly higher. Shanxi securities listed in the price report that the valuation is slightly higher than the previous three issue, because the selection level compares the premium level of the innovation layer, such as the opportunity to transfer the board and ample liquidity.

Price differences also make different investors have different choices in the first day of inquiry.

Another senior Beijing three board investor, Cao Miao, told reporters that it eventually abandoned the two companies' inquiries under the net, mainly because the price range set by the two companies was expensive. "Even if there are valuations and liquidity premium at the selected level, there should be some discount on reference to A shares. At the same time, based on the high risk of liquidity uncertainty in the next two levels of market, it is unwise to win new games at high prices."

However, there are also private institutions in the face of the first two enterprises' enquiries, adopting a more radical strategy, that is, the quotations at the upper limit of the reporting price, so as to win the winning rate.

Some of the securities firms' enquiry proposals also reflect the conflicting and messy market pricing. For example, the Huaxi Securities's Yingtai biological enquiry proposal suggested by the reporter shows that the long term reasonable valuation of Yingtai bio has been given 25 times PE in 2020, that is, the long-term reasonable price is 6.84 yuan. The proposed quotation is 1.5-1.7 times, that is, the proposed inquiry range is 10.26-11.63 yuan, and it is not recommended to track and hold for a long time.

"Huaxi Securities's inquiry proposal is actually encouraging investors to quote high prices to win the winning rate, but at the same time, they do not agree with the long-term value of Yingtai biology. Such quotations and pricing thinking are very contradictory, but they are very consistent with the new strategy of A shares, which is to win the winning rate. But in the new three board market, different investor structure and different liquidity expectations, this is the case. The question of whether the strategy can work still needs a question mark. " A small and medium-sized brokerage capital market service department in Beijing told reporters.

Appeal for rational offer

After the first batch of enterprises began to enter the inquiry, some market participants also called on investors to make rational quotations. There are many differences between the new three board market and the A share market. The probability that the new three board market will replicate the A share market will not fail.

Liu Jing, director of new three board research at Shen Wan Hongyuan, said: "it is difficult for the selection layer to duplicate the new shares of A shares and not lose the market characteristics. First of all, the threshold for the 1 million opening of the selected layer is even higher than that of the Chuang Chuang board; the number of the current selection accounts for more than 1 million; the market is still afraid of liquidity risk; secondly, according to the selection layer, a large number of public stock stocks are not locked. This will enable a large number of companies to have relatively high capital stock. Third, unlike the science and technology board, the pricing of new shares is marketization, with no limit on the first day and a 30% rise. The design of these systems makes arbitrage investors take greater risks. Therefore, we think it is more important to select quotations at a selected level than to win the lottery.

At the same time, the structure of the new three board investors will also have a negligible impact on the current inquiry.

According to the first batch of public offering fund-raising funds and subsequent product registration, public funds will be difficult to directly participate in the process of inquiries under the network. Combined with the results of the announcement of some companies, a number of public funds have been directly selected as strategic placement partners for 6 months and do not participate in the inquiry. This also means that under the new three board network, the investor structure will be dominated by private equity and individual investors.

In response, Liu Jing pointed out: "the net structure of the selected layer has congenital defects, and the number of individual investors is large and experience is lacking. Because 10 million assets can be opened under the selective layer network, new rights will be generated, resulting in a large influx of individuals, and there is no mandatory classification allocation rules, resulting in institutional pricing is not an absolute advantage. In addition, many individuals who choose to play a lot at the moment are the first to participate in the offer. The result of the pricing of new shares by retail investors is the sharp fluctuation of the two level returns. Under the network inquiry will also show the characteristics of "high price get", in the market sentiment is good, for example, think that the first batch of policy dividends, may appear too high price situation, and in the subsequent collective withdrawal, resulting in two level fluctuations.

Based on the above factors, some sober market voices are appealing to investors to offer rationally. So, what kind of quotation method and pricing method are more reasonable?

Liu Jing believes that in the selection layer failed to form a historical transaction, the market can not track its valuation level, it is recommended to use A shares discount method to evaluate it. That is to say, the recommendation of the selective layer inquiry is A shares, which is comparable to the 50%-80% of the company.

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