Unexpected. Of the 32 stocks that landed in the select tier, 21 stocks fell, with a median increase of -10.98%, which shows the tragic market.

A long-awaited wealth feast has turned into a venture capital class. This also allows investors to feel up close that it is not surprising that a large proportion of “new shares” broke in the domestic capital market.

The selection layer is likely to be a preview of the future of A shares. Judging from the recent performance of new stocks in A-shares, it is not surprising that it will move closer to the selection layer in the future.

Not only Cathay Bio, but also the performance of Cansino, which is listed today, is not satisfactory. As Genzheng Miaohong’s new crown vaccine concept stock, Cansino rose 87% on the first day of trading. You know, the median increase of new shares on the Sci-tech Innovation Board that were listed in July reached 223.78%.

The lack of performance in the secondary markets of Cathay Biotech and Cansino is partly due to the overvaluation of the issue. As a material manufacturing company that is more like a chemical company, Cathay Biosciences has an issue price-earnings ratio of more than 100 times; Cansino’s income is almost zero, but its issued market value has exceeded 50 billion.

Except for the Science and Technology Innovation Board, the performance of A-shares traditionally listed in August seems to be generally poor. Baoming Technology, which was listed on August 3, received 6 daily limits; Fashilong, which was listed on the same day, only received 4 daily limits. Subsequent listings of Chenguang New Materials and Huada New Materials both gained only 4 daily limit.

Actually, for a mature capital market, it is normal to “break” on the first day. In 2019, there were 122 and 311 IPOs in Hong Kong and U.S. stocks, respectively, with the first-day break ratio of 33.6% and 16.7% respectively. In mature capital markets, “survival of the fittest” is the final result. If the issue price is high, it will inevitably fall.

It’s just that, due to the past “abnormal” pricing mechanism and limited supply in my country’s capital market, the myth of unbeaten new stocks has emerged.

It is foreseeable that as long as market-oriented reforms are adhered to, breakouts will inevitably become the norm for A shares. The question before is, when will this day come. At present, it is not far from this day.