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IPO in China --Not a must win game anymore

IPO in China --Not a must win game anymore. Presented by: Di ZHANG. Brief Introduction. SHSE, SZSE opened in 1990 Limited trading style, No short, no hedge Very small QFII, mostly domestic investors Young, Energetic, Protected, Problematic. Existing problem.

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IPO in China --Not a must win game anymore

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  1. IPO in China--Not a must win game anymore Presented by: Di ZHANG

  2. Brief Introduction • SHSE, SZSE opened in 1990 • Limited trading style, No short, no hedge • Very small QFII, mostly domestic investors • Young, Energetic, Protected, Problematic

  3. Existing problem • IPO : Universally underpricing, especially in China • Huge gap between Primary Market & Secondary Market

  4. Comparison • Return of registering IPO = 22.7 times of return of putting money in banks

  5. Government policy • Price Limit Cap: P/E < 20 Crazy first trading day (X) • Free IPO pricing, 20 P/E limit cancelled Over-raised capital, P/E ratio over 50 (X)

  6. Tight Monetary Policy • High Demand of capital for IPO • Lower P/E, • Lower first day return

  7. First day return negative appeared • The free lunch never exist

  8. FUTURE • More stable market • More diversified products • More educated investors • More efficient market

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