(Yicai Global) March 22 -- Seven new share sales on the Chinese mainland exchanges have dropped below their offer price on their first day of trading so far this month, six more than in February and the same number as in January as an increasing number of new stocks fail to meet market expectations.

SmartGiant Technology's stock price [SHA:688115] plunged 23.6 percent to CNY50.11 (USD7.87) on its first day of trading on March 14 while Shaanxi Lighte Optoelectronics Material's issue price [SHA:688150] sank by 13.8 percent to CNY22.05 when it went public on March 18.

The price falls have to do with earning less revenue than their competitors, a higher price-to-earnings ratio than the industry average and raising more money than expected, according to Yicai Global research.

SmartGiant, a smart factory test and measuring solutions provider, has a price-to-earnings ratio of 34.78, yet when it went public it was 75.6. Lighte Optoelectronics, an organic light-emitting-diode maker, had a PE of 31.66 in the past 12 months, higher than the industry average of 30.85. But its annual revenue for the last three years has fallen well below that of its peers. Last year it logged revenue of CNY337 million (USD53 million), while the industry average was CNY1.4 billion (USD225 million) in the first three quarters of last year.

Xiamen Vole Mold & Plastic Engineering set its initial public offering price at CNY64.08 (USD10) apiece, aiming to raise CNY1.8 billion (USD283 million), over 13 times its net profit in 2020. The mold manufacturer actually raised CNY981 million more than its goal, but its share price [SHE:301196] tanked 6.07 percent on its debut on Jan. 11.

Three out of the four mainland exchanges’ benchmark indexes have fallen between 0.76 percent and 1.69 percent so far this year. The Shanghai Stock Exchange Composite Index closed at 3,253.69 yesterday, the Shenzhen Stock Exchange Component Index at 12,379.64 and the Shanghai bourse’s Science and Technology Innovation Board 50 Index at 1,152.33. Only Shenzhen’s ChiNext Composite Index rose, gaining 1.1 percent to finish at 3,094.69 on March 11.

Editor: Kim Taylor