A Study on the Correlation Between Regulatory Inquiries and the IPO Performance and Share Price Performance of Companies – A Case Study of Tibet Duo Rui Pharmaceutical

Abstract

Regulatory inquiries are becoming more and more common these days. In a broad sense, corporate regulation is the act of auditing, evaluating and intervening in the compliance, authenticity and legal compliance of a company's objectives and results so that the corporate governance system operates healthily. Whether a company's being regulated has various impacts, positive or negative, on performance and share price is explored using the event study method, and the number of regulatory inquiries and questions asked of the company is described in detail using Duo Rui Pharmaceuticals as a case study, with a brief summary of the company's responses. This article analyses the impact of the company's performance after the IPO, starting with operating capacity, profitability and growth capacity, and comparing the data before and after the IPO. The comparison reveals that the overall operating capacity is slightly lower than before the IPO, and the company's profitability also shows a decline and a significant decline in growth capacity, indicating a reduction in the scale of the company's development. Regarding the correlation between regulatory enquiries and share price performance, the number of enquiries made to all GEM-listed companies under the registration system and the price suppression rate is statistically significant. It can be seen that the number of IPO enquiries directly impacts the price suppression rate of companies; the more IPO enquiries are made, the lower the price suppression rate.