Huarui Wind Breaks Lead to Double Torture

On January 13, the highest-selling company Huarui Wind Power Technology (Group) Co., Ltd. (hereinafter referred to as “Huarui Wind Power”) was listed on the Shanghai Stock Exchange. What makes the market stunned is that this stock, which has been hailed as the first in the "12th Five-Year" strategic emerging industries, broke during the first day of the listing, creating the second-best drop in the IPO since the restart of the A-share IPO in 2009. Records.

Some securities analysts believe that the sharp decline in the listing of Sinovel Wind Power is mainly due to two reasons: First, the shock caused by the market's concerns about the company's product quality, the optimistic expectations of the company's performance growth have been shaken; Second, the industry has been listed The value of Jinfeng’s technology is underestimated, which to some extent has constrained the premium level of Sinovel Wind Power.

The first torture brought by Huarui wind breaks is: Can listed companies have less success and more stable success?

It can be said that Sinovel is a listed company with “problem” listings. On January 5 of this year, when Sinovel was conducting wind turbine installation and commissioning in Shangyi County, Zhangjiakou City, an electric shock occurred and 3 people died. Although Sinovel’s wind power related personnel believe that “accidents are accidental events and have unpredictability”, enterprises should do a good job of safe production and protect employees' safety. At least, the electric shock accident indicates that the company still has problems in its management.

The impact of "electric shock" on the trend of stock prices is unavoidable. Although Huarui Wind Power's share price is still unpredictable in the long term, it should not be too optimistic in the short-term. The sharp break on the first day has had a big negative impact on the company, and investors' impressions may be difficult to reverse for a long time. If you do not rush, first deal with the problem properly, and then go public, may not present the current outcome.

The second torture brought by Huarui wind breaks is whether policy makers can profoundly reflect on China's new stock issuance system.

In the fourth quarter of last year, the China Securities Regulatory Commission initiated further reforms of the new share issuance system. As a result of deepening reforms, the issuance prices of new stocks are not even lower, but they are getting higher and higher; the P/E of IPOs is not becoming more reasonable, but on the contrary, it is becoming increasingly irrational. In a sense, the reform measures intended to correct errors did not receive the expected results, but instead presented a bad situation.

The issuance price record is constantly being refreshed, which is one of the most significant features of the new share offering system reform. Since Hai Purui hit the highest issue price in the A-share market, whether it is the Shenzhen GEM, the SME Board, or the Shanghai Stock Exchange, the issue price and issue price-earnings ratio have continuously rewritten history. The GEM new share of Watson Bio has created 133.8 times the "high price" issue price-earnings ratio, was immediately followed by 138.46 times Galaxy biological beyond, new research shares are 150.82 times the issue price-earnings ratio again set a new record. In terms of issuance price, Haipurui created the highest price for small and medium-sized boards, and Tomson Times built the "upstart" for GEM at a price of 110 yuan, while Sinovel Wind won the highest price for new stocks in Shanghai with a issuance price of 90 yuan per share. The issue price of "laurel." High price-to-earnings P/E issuance means high risk, and it also means that the probability of breaking new shares is greatly increased.

Shanghai's highest issue price, wind power industry leader, new energy concept, etc., these were the beautiful halo that shrouded in the top of the wind of Huarui. Although the aura is beautiful, it cannot withstand the "deliberation" of the market. Because of the “three-high” issuance, the issuers and sponsors of Sinovel have become the largest shareholder of interest, and what they left to the market is “chicken feather”.

There are comparisons to identify. In the A-share market, the comparable company of Sinovel Wind Power is Goldwind, and their business structure, market position, profitability and growth potential are very close from 2010 to 2011. Goldwind's current stock price is about 21 yuan. Compared with Goldwind, Sinovel's share capital expansion ability is stronger and it should be given a certain valuation premium. However, the result of the inquiry was an irrational premium given by the agency. In fact, this set an early stage for Sinovel to break the wind.