China's Joint-stock Commercial Bank Ipo Pricing Study

As China entered WTO, the banking industry accelerates the pace of reform. Many shareholding commercial banks improved their core competition power by listing. IPO is one of the key points of listed company. Whether the IPO is reasonable or not influences whole efficiency of banks and profits of domestic shareholders directly.At the beginning, this paper analyses the related domestic and abroad research and IPO theories systematically. Also, this paper analyses the factors that influence IPO by using macroscopic economic index and financial data of eight commercial banks. Then, the paper draws the main factors that influence IPO by using the method of Principal component analysis. The main factors are as follows: Industry growth rate, earnings per share, the balance of loan-to-deposit ratio, the net assets of growth and foreign investment shares. This paper gets pricing regression equation by drawing assistance from multi-factors pricing method. At last, this paper takes Citic bank and Industry and Commercial Bank of China as example and according to the research, the equation is well but it reflects IPO is under-pricing. The research reflects that the reasons of under-pricing are imperfective security market and the poor management and ownership structure of banking industry. The paper suggests that we should gradually eliminate IPO under-pricing phenomenon of banks by improving the securities market, enhancing core competitiveness, improving the structure and responding the foreign capital positively.