1. The price earnings ratio limit of 23 times is. When new shares are issued, their P/E ratio cannot exceed 23 times. The P/E ratio is the price divided by the earnings per share, so the so-called P/E ratio limit is actually the limit on the issue price of new shares. The price earnings ratio of 23 times is relatively low compared with the price earnings ratio of the whole market, so most stocks can achieve good growth after listing.
2. Of course, the price earning ratio method is not the only pricing method for IPO. In the Science and Technology Innovation Board and the GEM, the pricing of new shares is liberalized, and the new shares on the Science and Technology Innovation Board and the GEM adopt more market-oriented inquiry methods.
3. Take the GEM, which recently implemented the registration system reform, as an example. It retains the direct pricing method, reduces the issuance cost of SMEs, and improves the issuance efficiency. In terms of inquiry, establish an inquiry pricing mechanism with professional institutional investors as the main participants.