China’s Nasdaq-style high tech stock market warned investors on Monday against negotiating bid prices in their subscriptions to shares of initial public offerings (IPOs), reported Caixin.
At a meeting of the public issuance self-discipline committee of the Shanghai Stock Exchange’s STAR Market, members said some investors were suspected of offering concerted prices in subscribing for new shares and said some lead underwriters failed to provide investment value research reports independently and prudently.
In the IPO of Swancor (Jiangsu) New Materials, a producer of carbon fiber composite for wind power plants, the company originally planned to raise as much as RMB 216 million ($31.7 million), but eventually raised only RMB 108 million after setting the offering price last week at RMB 2.49 a share.
That IPO price implies a price-to-earnings ratio of 10.27, the lowest among IPOs on the STAR Market and significantly below the informal cap of 23 times earnings on Chinese mainland stock exchanges.