| The IPO system in China’s A-share market has mainly undergone three stages of changes: the examination and approval system,the approval system and the registration system.In November 2013,the Third Plenary Session of the Eighteenth Central Committee of the Communist Party of China first proposed to "promote the reform of the stock issuance registration system".In 2023,the comprehensive implementation of the registration system was officially launched.In the period of registration system reform,the new stock pricing system shifted from government-led to market-led,and the trading system on the early days after IPO was gradually improved.The registration system reform has simplified the IPO process,promoted information exchange,and improved the efficiency of new stock issuance.However,the long-standing "IPO underpricing mystery" has been widely present in domestic and international markets,and the IPO underpricing rate in China’s A-share market remains high.Studying the changes in IPO pricing efficiency under the registration system can deepen the understanding of IPO pricing for various parties,and provide insights for the improvement of relevant supporting rules during the implementation stage of the comprehensive registration system.Analyzing the changes of IPO system in China’s A-share market and discussing the situation,this paper separates the IPO underpricing rate into two parts for theoretical discussion: IPO pricing efficiency and secondary market pricing efficiency.Furthermore,using the GEM IPO enterprises as data samples,this paper conducts empirical analysis using the stochastic frontier model,with the period of 2015-2018 as the control group and 2018-2022 as the experimental group.The study has found that the IPO pricing and closing price on the first day after IPO are both higher than the intrinsic value of enterprise,that is,there is a primary market premium and a secondary market premium.The premium rate of IPO is lower than the premium rate in the secondary market,resulting in "IPO underpricing".After the implementation of the registration system,both the primary market and secondary market premiums have increased,and the efficiency of IPO pricing has decreased.Moreover,the gap between the two has widened significantly,explaining the further increase in the IPO underpricing rate.In addition,this paper discusses the factors of the COVID-19,market environment and industry heterogeneity through attribution analysis.Based on above conclusions,in order to further guide the full implementation of the registration system and the improvement of the efficiency of the financial market,this paper proposes the following suggestions.Firstly,for policy and regulation,this paper suggests that:(1)further improve the new share inquiry system and regulate inquiry institutions;(2)improve the short-selling mechanism of the A-share market and enhance the degree of marketization and market freedom of the financial market.Secondly,underwriters and issuers should be more cautious in the IPO pricing process,and should reasonably price the enterprise based on intrinsic value.Third,financial literacy education for secondary market investors should be strengthened to guide rational behavior and promote the healthy development of the financial market.The main innovation of this paper is to discuss the issue of IPO pricing efficiency from the perspective of the primary market and the secondary market,which considers the impact of secondary market expectations on the IPO pricing behavior of the primary market.Due to the particularity of the period of GEM registration system reform,the impact of the COVID-19 on IPO pricing efficiency was aslo considered.In addition,the paper also discusses the market environment and industry heterogeneity. |
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