The first IPO on the Growth Enterprise Market today! How are unprofitable companies priced?

The first IPO issuance by a non-profitable company on the ChiNext board has been launched.

On April 3, the new stock Dapu Micro began online subscription for the public offering. According to publicly available information, the offering price for this issuance is set at CNY 46.08 per share. The number of shares offered to the public is 6.98M shares, with a subscription cap of 6.5k shares.

As the first non-profitable IPO company on the ChiNext board, how it will be priced has drawn market attention. The offering announcement shows that this IPO project adopts the price-to-sales (PS) valuation method.

Judging from the outcomes of the inquiry from institutional investors, the level of participation among institutional investors has not decreased. More than 300 offline investors have submitted quotes, placing them at a relatively high level. The strategic placement roster was also revealed at the same time. Among the 10 institutions, besides the underwriter’s participation in the placement and the employee asset management plan’s subscription, there are also large insurance companies, industrial funds, and others.

How is it valued?

As the first non-profitable IPO company on the ChiNext board, how it will be priced has attracted market attention. Looking back at the development process of the A-share registration-based system, investment banks have already accumulated mature experience in pricing non-profitable companies on the STAR Market.

It is understood that Dapu Micro mainly engages in the research and development and sales of enterprise-grade SSD products for data center businesses. Its main business revenue mainly comes from sales of the above products. According to the company’s disclosed financial statements and review report, in 2025 Dapu Micro’s operating revenue was CNY 2.29B, and net profit attributable to owners of the parent company was -CNY 481 million; in 2024, the corresponding figures were CNY 962 million and -CNY 191 million, respectively.

Against this backdrop, the issuer and the lead underwriter did not adopt the traditional price-to-earnings (PE) valuation method. According to Dapu Micro’s offering announcement, the issuer and underwriters selected the price-to-sales (PS) valuation method—using “latest-year operating revenue” and “price-to-sales ratio” as comparable valuation metrics to set the offering price.

A reporter noted that the comparable publicly listed companies selected for this round cover global capital markets, including Samsung Electronics and SK Hynix from the Korean stock market, Western Digital and Marvell from the U.S. stock market, as well as some A-share listed companies.

After taking into account factors such as the results of market pricing inquiry, effective subscription multiples, industry characteristics, valuation levels of comparable companies, capital-raising needs, and underwriting risks, the issuer and the underwriters have determined the offering price for this issuance at CNY 46.08 per share.

The above price corresponds to a diluted static price-to-sales ratio of 20.89 times for the issuer’s 2024 figures, which is lower than the average level of comparable listed companies’ diluted static price-to-sales ratio for 2024 (21.14 times).

Some brokerage analysts have previously pointed out that for the valuation of non-profitable companies, the valuation needs to be tailored to the company’s actual situation and the industry it belongs to. Common methods include the price-to-sales valuation method, the DCF (discounted cash flow) valuation method, the PEG (price/earnings-to-growth) valuation method, and others.

Industry insiders believe that the price-to-sales valuation method applies to companies in growth phases with thin profits or even losses but with rapidly increasing sales revenue. Dapu Micro is precisely a typical representative of this type of company.

Just recently, a newly listed non-profitable company on the STAR Market—Visionary Technology—also adopted the price-to-sales valuation method. Its 2024 operating revenue was CNY 280 million, and its non-GAAP net profit was -CNY 247 million. The发行 price determined by the company is CNY 22.68 per share, corresponding to a diluted static price-to-sales ratio of 80.98 times for 2024, which is higher than the average diluted static price-to-sales ratio for comparable companies in the same industry in 2024 (30.32 times).

Active quoting and concentrated orders

As the first non-profitable company on the ChiNext board, Dapu Micro’s offline inquiry attracted a large number of placement targets to submit active bids.

According to the offering announcement, in the early stage the underwriters received initial inquiry quotation information from 9,640 placement targets managed by 310 offline investors, with a quote range of CNY 43.66 per share to CNY 89.70 per share.

Based on a reporter’s statistics on Wind data, since the beginning of this year, each newly listed ChiNext stock in the offline inquiry stage has had more than 9,000 placement targets submitting quotes, indicating that institutional investors’ enthusiasm for participating in Dapu Micro has not cooled. In the second half of last year, the above data generally fell in the range of 7,000 to 9,000.

However, judging from the specific quoting behavior of institutional investors for Dapu Micro, the phenomenon of concentrated quotations still exists. According to the reporter’s statistics, only 17 placement targets submitted quotes below CNY 50 per share. As many as 99.6% of placement targets’ quotes were concentrated in the CNY 50 to CNY 52 per share price range.

After excluding invalid quotes and the portion with the highest quote in the proposed total subscription amount, the final number of effective-offline-issue quoting investors was determined to be 281, managing 9,164 placement targets. This corresponds to an effective subscription quantity totaling 98.22B shares, and an effective subscription multiple of 3518.19 times the initial offline offering quantity before the strategic placement clawback and the online/offline allocation mechanism is triggered.

Strategic placement lineup unveiled

Meanwhile, the strategic placement roster for the first non-profitable company on the ChiNext board was also released. There are 10 entities in total. In addition to covering the underwriter’s participation in the placement and the employee asset management plan, there are also large insurance companies, industrial funds, and others.

It is understood that the final strategic placement number in this issuance is 8.7243 million shares, accounting for about 20% of the total shares offered in this issuance.

Specifically, the underwriter Guotai Haitong’s subsidiary, Guotai Junan Securities Guoyu Investment Co., Ltd., participates in the placement as the underwriting party and receives an allocation of 1.3086 million shares, with a allocation amount of CNY 60.3025 million. The lock-up period is 24 months. Haitong Wealth Dapu Micro employees participate through the ChiNext strategic placement collective asset management plan and subscribe, receiving 2.6042 million shares, with an amount of CNY 120 million, and a lock-up period of 12 months.

For insurance funds, China Insurance Investment Fund (Limited Partnership) receives 259.4k shares, with an allocation amount of CNY 11.9524 million, and a lock-up period of 12 months.

There are 7 enterprises from industrial capital or venture capital funds: Changcun Hongtu Equity Investment (Wuhan) Partnership (Limited Partnership), Tiyi Capital Holding Co., Ltd., Shanghai Automotive Group JinKong Management Co., Ltd., Shenzhen Anpeng Venture Capital Fund Enterprise (Limited Partnership), Wuhan Optics Valley Semiconductor Industry Investment Co., Ltd., Shenzhen Innovation Investment Group Co., Ltd., and Hubei Jixintime Industrial Investment Co., Ltd.

Among them, Changcun Hongtu Equity Investment (Wuhan) Partnership (Limited Partnership) and Tiyi Capital Holding Co., Ltd. received relatively more shares, with both allocated 1.0851 million shares. The other 5 entities received fewer than one million shares each.

It is worth noting that the lock-up period for DeepTech Venture Capital Group is not an integer multiple of 12 months; instead, it is committed to a lock-up until December 31, 2027, reflecting a more flexible lock-up arrangement.

Layout: Wang Yunpeng
Proofreading: Pan Da