Chinese regulators have instructed bankers to avoid flooding the IPO market with low-quality companies and to maintain conservative pricing to bolster retail investor confidence. Recent high-profile debuts, including chipmaker CXMT and robotics start-up Unitree, saw stocks surge over 400% on their first day of trading after being priced below Western levels. Officials from the China Securities Regulatory Commission met with senior investment bankers to reiterate a desire for conservative pricing and to limit listings of companies not deemed "national champions." China's IPO market has rebounded strongly this year, with over 100 listings raising more than $28 billion — up nearly 50% compared to the whole of 2024 — according to HSBC analysts.

New listings posted first-day median gains of 173% in China this year. Regulators aim to ensure investors can make good gains to sustain market momentum, differing from Western practices where a 10% "pop" is typical. A senior executive at a leading Chinese bank explained that prices must be set lower to leave a safety cushion, noting that a company valued at 30 times earnings might realistically trade at only 15 times.

This approach was particularly evident with CXMT, which, despite being valued similarly to AI rivals Samsung and SK Hynix, soared about 560% above its offer price. Since the 2019 launch of the Star Market, pricing has varied by sector, allowing lossmaking tech companies to be valued on sales. Regulators argue low pricing protects state assets owned by government funds and banks, though critics note extreme supply-demand asymmetry in national champion hype-driven debuts.