Reforms and Challenges to the Initial Public Offering Pricing Mechanism Under the New Inquiry Rules: An Initial Public Offering Break Case Study Based on ASR Microelectronics

Abstract

This article takes the severe initial public offering (IPO) setback of ASR Microelectronics Co., Ltd. as a case study, and deeply examines the impact of the new inquiry regulations on the IPO pricing mechanism under the registration-based system. The study found that the new regulations effectively suppressed the phenomenon of “group quotation” and promoted the return of pricing power to the market by optimising the elimination ratio of high prices and strengthening the supervision of quotation behaviour. However, this reform has also turned the core contradiction of IPO pricing into a conflict between the issuer’s overvaluation demands and investors’ rational judgement. The breakout case of ASR Microelectronics shows that the market is making mandatory corrections to the valuation that is detached from the fundamentals through the price discovery function, revealing new challenges of the imbalance in the pricing game in the deepening stage of the registration system. This research provides theoretical reference and practical inspiration for evaluating the effect of the new policy of inquiry and improving the market-oriented pricing mechanism.