Source: Very handsome investor shuai_investor
Author: Very handsome fox
Hello everyone, I am a very handsome fox
Today I am going to talk about
New stocks break the issue
Among the 4 new stocks listed last month (26th), 3 of them all break the issue (fall below the issue price).
And this is not an exception -
According to Choice data, the new stocks listed in A shares in in the first half of the year fell nearly 1/4 of the issue price on the day of listing. The ratio of
is more than twice that of last year (after the new inquiry regulations were released). Behind the phenomenon of
, in addition to the impact of the new regulations, it is more because the primary market has been too crammed in recent years.
The so-called "primary market" is actually the equity transaction of before the company's listing (called the secondary market after listing).
In addition to having an impact on the issuance of new shares, it will even significantly impact the performance and share prices of other listed companies .
Today I will try to answer the following questions -
What exactly should the company go through before going public?
What is the relationship between the break in the new stock issue and the primary market?
How did the bitterness of the primary market flow into the secondary market?
Take a look at the popular science of "A handsome investor" project, a funder who had too much money to spend found me.
Although the company was poor and out of place at this time, the financial owner thought I was very reliable, so he decided to pay for me.
Then I got a sum of money and transferred part of the company's equity to the investor.
These early investors adopted the rule of big numbers: investing in 10 projects, usually only reliable projects like me will succeed, and the other 9 will either run away or burn money and can't hold on.
has a particularly high risk!
So these investors are called "VC funds" in the industry, Venture Capital, or VC for short.
And the angel wheel A wheel BCDEFG wheel that we usually hear refers to the equity investment of VCs.
In the early days, those who are willing to invest in your product before it has been formed are your rebirth parents!
They flashed with dazzling light! They are God! It's an angel!
is right. The investors at this time are " angel investor " .
As the company grows slowly, more and more investors are interested in our projects and have also invested in them.
’s next investment is A round B round .
In this process, the company's valuation is also slowly growing.
When everything is ready, we can apply for listing on the stock exchange!
is listed, also known as "IPO" (Initial Public Offering), which refers to the first time you have publicly raised funds and sold stocks from the entire society.
At this time, we subscribe to stocks in the "primary market", which is what we often call "new stocks" .
After placing new stocks, the stock is listed, and the company's stock can now become directly traded in the "secondary market".
VCs can also sell their stocks at market prices, which are often dozens and hundreds of times the investment they invested back then.
However...
In the primary market, VCs' complete equity investment roughly includes the following links -
In the primary market, the equity investment of fund companies is mainly divided into four stages: fundraising, investment, management, and withdrawal from .
Now, has encountered great difficulties in raising, investing, and withdrawing -
1. Fund raising
In the first half of this year, China's equity investment funds (VC and late-stage PE) only raised a total of 772.5 billion, 10% less than last year's .
After all, our relatives are still relaxing, so the scale of RMB funds has not dropped much. The foreign currency funds that fell more frequently were US dollar-based foreign currency funds, 65% less than last year.
On the one hand, the series of black swan events made foreign capital a little bit -
In July last year, the education " double reduction " policy was introduced. Combined with the impact of the Didi incident on platform economy , the Chinese stocks listed in the list fell a bit miserable.
In addition, the " Foreign Company Accountability Act " in the United States was implemented at the end of last year. Everyone is also a little worried that the subsequent Chinese stocks listed in the United States will be delisted in the United States.
On the other hand, leaked and was raining all night long. Fed , which was still opening the gates in the first half of last year, this year, began to significantly raise rates in and pump water.
2. Fund investment and financing
If the fundraising is a slide, investment is a failure.
equity investment amount in the first half of the year was only 314.929 billion yuan, which was halved from to ; the investment amount started at 4,167, a decrease of 30% year-on-year .
structure, different industries are severely differentiated, drought death, -
is affected by the epidemic, and there is no improvement in demand. K12 education is gone, and new consumption is almost out of business this year.
, especially the Internet, chain retail, and food and beverage fields, are not welcomed by investment.
and hard technology track (including eight major industries such as biotechnology, optoelectronic chips, and new generation information technology) has overheated again: investment institutions are struggling to grab projects, but as a result, these tracks frequently experience inverted valuations in primary and secondary markets.
3. In terms of capital exit
exit, the total number of exit cases is only 1,295, which is also halved by compared with the same period last year.
US stock listing supervision has become stricter, so the number of corporate IPOs fell by 38.8% year-on-year compared with .
To summarize it in general, the difficulty of the primary market can be understood as less money + high-quality projects less .
Next, let’s take a look at the impact on listed companies in the secondary market -
The primary market is in failure, which is not a good thing for the stock price...
1. Less money: The income of To-B listed companies is affected by the decrease in the investment amount of
, which means that VCs have fewer bullets to startup companies.
Startups have to tighten their belts and live a life, and their budgets for advertising and corporate services have to be moved back.
Take the most typical advertising placement as an example. After we took the historical data of the trading, we found that from 2016 to 2021, the primary market investment and the advertising revenue of listed companies were quite consistent.
Note: The leading domestic advertising companies have selected 7 companies: Baidu , Weibo, Bilibili , Kuaishou, Tencent , iQiyi, and Focus Media as representatives.
has another more intuitive example. China's medical and health investment and financing are also closely related to the performance of domestic CXO companies -
Note: The leading local CXO companies have selected Kelaiying , Boteng Co., Ltd. , Kanglong Huacheng, Zhaoyan New Drug, Tiger Pharmaceutical , Medixi , Wuxi AppTec , WuXi Biologics, Yaoshi Technology as representatives.
In the first half of the year, the growth rate of our medical and health investment and financing further failed and fell directly to negative numbers.
So the domestic revenue growth of local CXO leading companies has also dropped a lot. The conclusion of
will make it more convenient for us to analyze it in the future -
After all, investment and financing data is more convenient to track at high frequency, so we can also regard the year-on-year growth rate of China's medical and health investment and financing as a forward-looking indicator of the domestic revenue of local CXO.
In addition, VCs not only invested less in the first half of the year, but also raised less money, which means that the money that can be invested in the future may be more nervous.
2. There are fewer high-quality projects: breaking the issue is getting more and more frequent
If you ask VCs what their deep feelings in the first half of the year, a unified answer may be:
In fact, there is no shortage of projects in the market, but the "high-quality projects" that VCs can all like to VCs are not enough for everyone to score.
Judging from the investment situation in the first half of the year, the top three tracks have occupied 460% of the investment amount of , which is indeed very crowded.
A very simple logic is -
In the industry that everyone wants to invest in, there are not many good projects in .
In order to grab the project, VCs have to work hard to get a higher valuation than others.
resulted in the project being sold, but the valuation price was also overwhelmed.
When it is about to go public and exit, the market will not have that much money to take over, so new stocks will naturally break the issue price.
For example, among the top three tracks in the first half of this year, semiconductors and medical products broke the issue price significantly -
The decrease in VC fundraising and investment and financing activities in the first half of the year is also related to the epidemic in Shanghai and other places.
After the epidemic improves in the second half of the year, these restrictions will be lifted, so the amount of investment may increase.
However, when the economy is not strong, VCs will be more sensitive to policy trends.
so it is highly likely that it will continue to roll in the hard technology track, after all, the country has been strongly supporting it.
In general, even investors who focus on the secondary market can learn more about the situation in the primary market.
Like me, I always keep browsing the venture capital sectors of technology blogs such as Techcrunch, 36kr, Titanium Media , Geek Park , etc.
If you want to see the data of the primary market, you can also dig out scientific research and IT Orange reports.
As a picture, summarize it in a picture -
🤑
"Greed is good."
"A very handsome investor" is all content for the purpose of conveying knowledge and financial education only and does not constitute any investment advice. Please refer to the latest articles for everything.
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This article analyst/ Polo
Picture and editor/Fox, Polo, Xiaoju, Yayafu
Icon/freepik from flaticon
Main creator/Xiao Jing, @Fox Jun raphael, has worked in the McKinsey financial institution group and has also worked in Google and VC. Wall Street News , 36Kr , Sina Finance, Southern Weekend, Linkedin and other media columnists, and author of the best-selling books "Pig in the Wind" and "Cashless Age".
📚 Reference/
"Cailianshe Commentary: Don't be surprised that low-priced stocks break the issue price, the market will play a greater role", "2022 H1 Global Medical Field Early Investment and Financing Report: Global capital has improved inclusiveness to start-ups, and the total domestic early financing amount is approaching US$900 million", "2022 China Equity Investment Market Project Exit Income Research Report", "2022 China Equity Investment Market Research Report", "Qingke Quarterly Report: Investment Rate in the First Half of 2022, IT, semiconductors, and medical health are still popular fields", "LP Jianghu 20 Years: Kryptonian, coin spoiler, and turn around", "Pharmaceutical and Biological Industry: CXO: The password behind high-frequency investment and financing data! 《Chip investment is too introverted, I haven’t made a move this year》《Hard Technology VC: Learn to endure hardships, and only investment is entitled to
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