A double suspension and a stock price that surged up to 78 per cent greeted the debut of People.cn, the online news portal of the Chinese Communist Party's mouthpiece, on its first day of share trading in Shanghai.
In a volatile day, the stock surged to as much as 35.60 yuan (HK$43.74), before closing at 34.72 yuan, up 73.6 per cent from the offer price of 20 yuan. The benchmark Shanghai composite Index edged down 0.35 per cent.
The company raised 1.38 billion yuan from an initial public offer of 69.1 million shares - or 20 per cent of the available shares - it said in an exchange filing this month. It was almost three times the amount initially sought.
At 20 yuan, the shares had a price-earnings ratio of 46.1. Yesterday's surge lifts that ratio to 73.5 times.
'Many investors do not really know the operations of People.cn. They are simply lured by the big brand name of People's Daily,' said Li Daxiao, a director at Shenzhen-based Yingda Securities.
Li said investors should hold off from buying People.cn - which is now valued at 9.7 billion yuan - till the price 'cools down'.
'The valuation is so high that it's unwise to invest,' Li said.