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Markets · Equity
New tech board’s first IPO oversubscribed by 335 times
2019/06/27 03:16:34
Suzhou Hyc technology; star market; science and technology innovation board

Jun 27, 2019 (China Knowledge) - Shares of Suzhou HYC Technology, the first company set to IPO on the new Shanghai Science and Technology Innovation Board (“Star Market”) has been oversubscribed by 335.6 times, shrugging off criticism investors had over its prospectus.

The company had set its IPO offering price at RMB 24.26 per share, valuing it at 41 times its 2018 earnings. Excluding bids under its final IPO price, the company’s shares still remain 257.6 times oversubscribed.

The company will take formal subscriptions starting today and will announce its final allotment results on July 3rd.

HYC had previously been criticized by investors for its presentation of its prospectus which features many references to computer chips despite having 98% of its revenue from testing equipment and electronic displays. These investors had accused the company of trying to present itself as a chipmaker to attract investors.

The latest IPO also helped to confirm an earlier commitment made by the Shanghai Stock Exchange to scrap an intangible valuation cap of 23 times earnings for IPO companies.

Moving forward, fund managers and investors expect intense overbidding for companies as the new Star Market is still hot and there may not be as many value investment opportunities as expected.

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