A Case Analysis On The Sinovel IPO Overpricing

Pricing is the core of entire IPO progress. Only a reasonable price can reflect theintrinsic value of the company. And there are two fundamental factors, the first isestimating method of the value; the second is the pricing method of stock issuing.IPO pricing is the important step of the stock listing. Overpriced IPO that had agreat negative impact on Chinese stock market as well as on the whole society. From theperspective of IPO pricing, this dissertation will identify and analyze the source of theproblem, then point out the solutions, specifically, strengthening issuing market buildingand management and propelling the development of stock issuing system, should beimplemented by CSRS.This dissertation takes Sinovel which known as the most expensive stocks ever asthe case as a case study. IPO pricing includes two steps. First we should evaluate thecompany, and then choose a rational pricing mechanism to decide the final price. I dividethis paper into four parts: preface, case introduction, case analysis, conclusion andsuggestions.The preface includes the research background, research significance, the structureand why it is innovative. The case introduction mainly includes two parts. At first, Ibriefly introduce the process of Sinovel’s IPO, that decide the final price by road show,enquiry and bidding. Second, I describe the performance of its IPO overpricing. In thecase analysis, I revalue the Sinovel through the Macroeconomic data, the economic statusof wind electricity and the financial situation, and then I analyze the overpriced Sinovel’sIPO from the perspective of the sponsor, the issuer and the institution. Finally, I discernand analyze the deficiency of the IPO pricing mechanism through this case. To sum up, Iput forward three suggestions to solve the problem of IPO overpricing.