New Shares Average 18K Profit on Debut, "Mindless IPO Investing" Back?
On October 11th, the printing plate material listed company, Qiangbang New Materials, saw a staggering 1739% increase on its first day of trading, capturing the attention of the entire market and once again raising the temperature of the new stock market. Qiangbang New Materials also "joyfully received" the title of this year's "King of New Stock Gains."
According to calculations, based on the closing price, a single lot of Qiangbang New Materials made a paper profit of 84,000 yuan. If calculated according to the highest price during the trading day, the maximum paper profit for a single new stock lot reached 118,000 yuan.
Statistics show that since the second half of last year, the secondary market for new stocks has shown an explosive trend, and the performance of new stocks on their first day of listing this year has been even more fervent.
The average increase on the first day of listing for new stocks this year reached an astonishing 187.89%, which is 2.8 times that of last year. If the profit from new stock lot is calculated based on the closing price on the first day of listing, the average paper profit for a single lot of new stocks this year is 18,100 yuan, which is 2.7 times that of last year.
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The once high phenomenon of stock price breaking issue price is now almost extinct, and the "three highs" phenomenon has been significantly improved. Is "mindless new stock hitting" back?
60% of new stocks doubled their stock prices on the first day of listing.
At the end of September, the new stock market exploded again. On September 30th, the leader in water-based printing paste, Changlian Technology, was listed with a high opening of 368.75%, triggering a temporary suspension twice during the trading day, with the highest price reaching 408 yuan per share. The company's issue price was 21.12 yuan per share, with an issue price-to-earnings ratio of 17 times, and the closing price on the first day was reported at 381 yuan per share, up 1703.98%.
On October 11th, Qiangbang New Materials and Tongguan Mining Construction were listed on the same day. Among them, Qiangbang New Materials' initial offering price was 9.68 yuan per share, with an issue price-to-earnings ratio of 17.54 times. It opened with an 8-fold increase in the morning and touched a high of 245 yuan per share during the trading day, with a closing price of 178.01 yuan per share, up 1738.95%. Qiangbang New Materials thus became the new stock with the highest increase on the first day of listing this year, with its market value soaring to 28.5 billion yuan on that day; Tongguan Mining Construction also saw a significant increase on its first day of listing, with a closing price of 36 yuan per share, up 731.41%.
Looking at the long-term statistics, the profit effect on the first day of listing for new stocks this year far exceeds that of the past few years.
Wind data shows that under the background of relatively tightened IPOs, only 71 new stocks were listed in the A-share market this year. Among them, there were 20 on the main board, 10 on the STAR Market, 26 on the ChiNext board, and 15 on the Beijing Stock Exchange.Out of 71 newly listed stocks, 69 closed higher on their debut day, accounting for over 97%. One stock closed at the same price as its issue price, and only one stock broke even, which was Shanghai HeJing listed on February 8th. The annual break-even rate is only 1.4%, significantly lower than 17% in 2023 and 29% in 2022.
The average increase on the debut day of the aforementioned 71 new stocks reached an astonishing 187.89%, compared to 66.45% in 2023 and a mere 42.82% in 2022. Companies that doubled their stock price on the debut day reached 42, close to 60%, while only 19% of new stocks achieved this milestone throughout the previous year.
In other words, as long as one catches a new stock and sells it on the debut day, they make money, more or less. Behind the high debut day gains is the increasingly compressed initial price-to-earnings (P/E) ratio and the initial offering price.
The average initial P/E ratio of new stocks this year is only 21.03 times, more than half of last year's 43.20 times. Among them, the average initial P/E ratio of the 56 stocks listed on the Shanghai and Shenzhen stock exchanges this year is 22.4 times, compared to 51.77 times for the whole of last year. Half of the new stocks have an initial P/E ratio below 20 times, and the highest initial P/E ratio is 49 times for ZhongChuang Shares.
The average initial offering price of new stocks this year is only 23.81 yuan per share, with only one stock priced above Breaking it down by segments, this year, the new stock listing gains on the ChiNext board have been particularly outstanding, surpassing those of the STAR Market. The average paper profit per share on the first day of closing for newly listed stocks on the ChiNext board is 29,800 yuan, significantly leading other segments. The "big meat signs" Changlian Technology and Nova Nebula are both listed companies on the ChiNext board, and the year-to-date break-even rate for the ChiNext board is 0%.
For the STAR Market, the average paper profit per share on the first day of closing for newly listed stocks is 17,200 yuan, following closely behind; for the mainboard, it is 12,300 yuan; the lowest is for the Beijing Stock Exchange, at 6,129 yuan.
Although the gains from new stock listings have become increasingly lucrative, they have also attracted a substantial amount of capital participation, leading to astonishingly low winning probabilities in the lottery system.
Data from Wind shows: In 2022, the average online winning rate for new stocks was 0.6690%, with the highest being 23.41% and the lowest 0.0114%; in 2023, the average online winning rate for new stocks dropped to 0.4867%, with the highest winning rate at 18.48% and the lowest at 0.0132%; and in 2024, the average online winning rate for new stocks plummeted to 0.0543%, with the highest only at 0.5000% and the lowest at 0.0169%.
This means that this year's average online winning rate for new stocks is only about 1/10 of last year's average.
Moreover, the speculation on new stocks on the first day is increasingly leaning towards retail investors. Taking Qiangbang New Materials as an example, its post-market dragon and tiger list shows that among the top five buyers, the retail investor hub of East Money "Lhasa Group" occupied four seats, and in the top five sellers, it occupied three seats.
Changlian Technology is no different; the dragon and tiger list data shows that among the top five buyers, the East Money "Lhasa Group" occupied four seats, and among the top five sellers, it occupied three seats. Meanwhile, the institutional dedicated seats had a purchase amount of 0, with a net sale of 2.06345 million yuan.
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