CITIC SEC: It is expected that the pace of A-share IPOs will see a slight rebound this year, and the income from offline IPO subscriptions will enter a stable range.

CITIC SEC released a research report stating that although the scale of new stock issuance in 2024 has decreased significantly by 83% compared to the previous year, the average first-day stock price increase has significantly increased to 155%, while the profits from offline subscription have not changed much. According to CITIC SEC's calculations, Class A accounts with a size of 2-5 billion yuan are expected to have offline subscription profits of about 1.7%-3.5% in 2024. Looking forward to 2025, CITIC SEC predicts that the pace of IPOs may slightly pick up, the performance of new stocks on the first day of trading may decline, and data related to inquiry participation, bid placement, offline subscription winning rates, etc. may stabilize, hence the profits from offline subscription are expected to enter a stable range. Even though the profits from offline subscription have decreased compared to the early stages of the registration system, in the environment of a continuous broad-spectrum interest rate decline, the offline subscription strategy still has a high attractiveness as a supplementary strategy. Changes in the new stock market of the Shanghai and Shenzhen Stock Exchanges in 2024: The scale of issuance has decreased significantly, while the first-day performance has improved significantly. Only considering new stocks issued through offline inquiry in 2024, in terms of the issuance pace, there were a total of 66 new stocks issued, with a total issuance scale of 573 billion yuan, which was an 83% decrease compared to the previous year. Regarding the participants in offline subscriptions, the number of accounts participating in preliminary inquiries continued to decline, and the overall bid placement rate remained high across all sectors. In terms of the offline subscription winning rate, there were some differences across sectors, with minimal changes in the main board, a slight increase in the Sci-Tech Innovation Board, and a slight decrease in the Growth Enterprise Board. Regarding the performance on the first day of trading, only 1 out of all new stocks listed experienced a price drop on the first day, and the average first-day price increase has significantly increased to 155%. For those applying for subscriptions at the maximum price, there were minimal changes in the main board, while the "Double Innovation Board" showed a significant decrease. Calculation of offline subscription profits on the Shanghai and Shenzhen Stock Exchanges in 2024: Class A accounts with a size of 2-5 billion yuan are expected to have profits of about 1.7%-3.5%. Although the scale of new stock issuance in 2024 has decreased significantly, the profits from offline subscription have not changed much due to the significant increase in the first-day stock price. For Class A accounts with a size of 2-5 billion yuan, CITIC SEC estimates that their profits from offline subscription in 2024 will be approximately 1.73%-3.55%. In terms of sector structure, the Growth Enterprise Board contributes more than half of the profits from offline subscription; overall, there is a "low to high" trend in the time series. Prediction of offline subscription profits on the Shanghai and Shenzhen Stock Exchanges in 2025: Class A accounts with a size of 2-5 billion yuan are expected to have profits of about 1.8%-3.7%. Looking ahead to 2025, CITIC SEC predicts that the pace of IPOs may slightly pick up, the performance of new stocks on the first day of trading may decline, and data related to inquiry participation, bid placement, offline subscription winning rates, etc. may stabilize. Overall, CITIC SEC believes that the profits from offline subscription will enter a stable range, assuming a neutral scenario, they estimate that Class A accounts with a size of 2-5 billion yuan will have profits of approximately 1.84%-3.73% in 2025. Outlook for the subscription strategy in 2025: Steady development, focused efforts. With the improvement of rules and regulations and the stabilization of participation structures, CITIC SEC expects that the profits from subscription in the future will gradually stabilize. Despite the significant decrease in profits from subscription compared to the early stages of the registration system, the subscription strategy still holds high attraction as a supplementary strategy in the environment of continuous broad-spectrum interest rate decline. The future subscription strategy is expected to focus on focused efforts, emphasizing the importance of maintaining independence and objectivity in pricing bids under the background of strengthened self-discipline management; balancing profit generation and risk control to enhance overall pricing capabilities for new stocks; considering the lock-up period of new stocks and optimizing the selling strategies for new stocks; and exploring other opportunities for increasing profits beyond the offline subscription on the Shanghai and Shenzhen Stock Exchanges, such as online subscription on the Beijing Stock Exchange.