The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that the scarcity of IPOs will increase dramatically in 2024, and high-quality sub-IPOs are worth continuing to invest in. The listing of high-quality assets will be achieved through mergers, acquisitions and restructuring. Among them, central enterprises and local state-owned enterprises will step up capital operations, promote market value management through various tools at the management and capital levels, and improve the quality of listed companies, which will be the core main line of the capital market in 2025. In 2025, the bank expects the Beijing Stock Exchange to further improve the product market, introduce more long-term capital and patient capital, and bring more benefits to investors.

The main views of CITIC Construction Investment are as follows:

2024 will be a year of deepening reforms in China's capital market. Stabilizing and revitalizing the capital market through deepening reforms is the direction of joint efforts of the government, regulators, listed companies, and investors.

The number of IPOs dropped drastically in 2024. Regulatory filings are responsible, strengthened scrutiny of financial fraud and information disclosure, strictly controlled issuance and listing entry, raised listing standards, improved evaluation standards for science and innovation attributes, and focused on supporting the direction of new quality productivity. As the issuance of new shares has slowed, the scarcity of new shares has increased dramatically. The first-day increase in IPOs was significantly higher than in 2023, and the number of breakouts on the first day of listing was drastically reduced. Due to reasonable pricing and a small number of issues, high-quality sub-IPOs are worth continuing to invest in.

The bank expects IPOs to gradually be normalized in 2025, giving priority to supporting the listing of “hard technology” companies that break through key core technologies in new industries, new business formats, and new technology fields; further improving the accurate identification mechanism for technology-based enterprises; and supporting the listing of high-quality unprofitable technology enterprises on the Science and Technology Innovation Board. On the other hand, achieving the listing of high-quality assets through mergers, acquisitions and restructuring, while improving the quality of listed companies, is also the core main line of the capital market in 2025. In this process, central enterprises and local state-owned enterprises will step up capital operations, promote market value management through various tools at the management and capital levels, deepen capital market reforms, and improve the quality of listed companies.

As an important part of the multi-level capital market, the Beijing Stock Exchange supports small and medium-sized enterprises in a specialized and new direction. Unlike the Shanghai and Shenzhen Stock Exchange, the Beijing Stock Exchange has further improved the bond market, formulated a comprehensive service action plan, etc., and improved more development initiatives. In 2025, the bank expects the Beijing Stock Exchange to further improve the product market, introduce more long-term capital and patient capital, and bring more benefits to investors.

Risk warning: the risk that the IPO schedule falls short of expectations. With the implementation of the full registration system, the maturity of China's capital market has further improved, and the number of IPOs issued is expected to increase. However, the company's initial public offering must meet a series of requirements of the system for financial data such as revenue and profitability and operating capacity. If the company fails to meet the relevant requirements in the future, it may cause the IPO issuance process to fall short of expectations.

Risk of market fluctuations. Under the current system, the pricing of IPOs needs to be completed by investors in the secondary market. If fluctuations in the stock market affect investor sentiment and expectations, they may affect IPO pricing and market performance.

Market liquidity risk. There is a certain correlation between the performance of the IPO market and market liquidity. If market liquidity changes drastically, the performance of the IPO market may fall short of investors' expectations.

Macro risks. The capital market is closely related to macroeconomics. Take the current A-share market as an example. The intensification of geographical conflicts and the decline in overseas markets are all macroeconomic factors affecting asset pricing; if the Russian-Ukrainian geopolitical conflict further intensifies and expands, it may lead to large fluctuations in the global financial market, and even systemic risks, which will also affect the issuance of new shares.

The overall profitability of the Beijing Stock Exchange is weak, and there is a risk that operational risks are more likely. The overall market value of companies listed on the Beijing Stock Exchange is lower than that of the Shanghai and Shenzhen main boards, the overall net profit of listed companies is lower, and the overall profitability is relatively weak. In the face of external influence, there is a greater possibility of operating risks. If such a situation occurs, it may cause investors' returns on related investments to fall short of expectations.