(Yicai Global) Aug. 11 -- Many companies planning to list on Beijing’s new stock exchange have adjusted their initial public offering proposals to make them more conservative as an increasing number of stocks fail to perform on their debut.

Over 10 firms preparing to go public in Beijing have reduced the issue price and shrunk the scale of the offering in the last three months, Yicai Global has learned. Since the beginning of the month, three firms have said they will drop the issue price. Adhesive maker Silane Technology has made the biggest cut in IPO price at nearly 40 percent.

Another firm, Qiule Seeds Technology, has dropped its issue price to CNY6 (USD0.89) per share from CNY7.90, the Zhengzhou, central Henan province-based seed producer said on July 27. It is also making a smaller floatation which will reduce the funds raised to CNY230 million (USD34.1 million) from CNY265 million.

By lowering their issue price, the companies have a better chance of passing the IPO review, Zhou Yunnan of Nanshan Investment, told Yicai Global. It also reduce the chance of their share price plunging on its debut and will attract more capital.

Most firms don’t want their stock price to slide as soon as they go public, so they are willing to reconsider the issue price, said Zhang Keliang, head of market maker business at Bohai Securities.

Market conditions have also changed a lot in the first half, and companies are adapting accordingly, industry insiders told Yicai Global.

“In the past few months, several newly listed companies saw their share price sink on the first day of trading,” one person said. “Trading on the Beijing Stock Exchange, which opened last November, has not been very active in the first half and the overall valuation and price-earnings ratio of the market has shown a downward trend.”

Issuers and underwriters should moderately reduce issue prices in advance, Zhou said. The Beijing bourse, which mainly serves small and medium-sized hi-tech enterprises, should educate them that a more reasonable starting price will attract more investors and promote the healthy development of the exchange.

Editors: Tang Shihua, Kim Taylor