High-priced new stocks are losing their sheen as post-IPO performance disappoints. One investor's experience with a machine vision company highlights the growing gap between market hype and valuation fundamentals.
"I understand what machine vision can solve, but I don't know how much the market will pay for those solutions," said Hu Jun, an automotive parts quality engineer, on September 17, seven months after holding shares of Isvision(Hangzhou)Technology Co.,Ltd. (688816.SH). The 34-year-old, with seven years of A-share investing experience, frequently works with dimension measurement, defect detection, and assembly verification equipment in his daily job. When Isvision went public, this familiarity made him feel better informed than the average investor about the company.
On February 11, 2026, Isvision debuted on the STAR Market at an issue price of 55.95 yuan per share, with Essence Securities as the sponsor and Chen Yihao and Tang Bin as sponsor representatives. On its first trading day, the stock opened at 100 yuan, peaked at 107.98 yuan, and closed at 88.92 yuan, marking an intraday high gain of 92.99%. Hu did not buy on day one, preferring to wait for a pullback. On February 27, as the share price corrected to around 75 yuan, he purchased 300 shares at 75.50 yuan, investing 22,650 yuan in total. "I waited half a month, so I wasn't among the most impulsive buyers," Hu explained. Having witnessed machine vision replace manual inspection and boost efficiency in factories, and knowing the stability requirements of automotive production lines, he found the company's growth story credible based on real-world experience.
However, in the three months following his purchase, the stock's price declined continuously. On June 29, Isvision hit an intraday low of 55.80 yuan, falling below the issue price for the first time, and closed at 57.20 yuan that day. The very next day, Hu added 200 shares at 11,640 yuan. His two purchases totaled 500 shares, with a combined cost of 34,290 yuan and an average cost of 68.58 yuan per share. Yet the additional buying did not trigger a rebound. As of September 18, Isvision had remained below its issue price for nearly three months, closing at 48.19 yuan per share, approximately 13.87% below the 55.95 yuan listing price.
Wind data shows that from January 1 to September 17, 2026, 116 companies completed IPOs on the A-share market. By September 17, eight companies, including Shaanxi Tourism (603402.SH) and Tongbao Optoelectronics (920168.BJ), saw closing prices fall below their issue prices.
Earnings deterioration
Isvision's official website describes the company as focusing on the R&D, production, and sales of machine vision equipment for automotive manufacturing, providing solutions across various process stages of vehicle and parts production. It claims to hold the largest domestic market share in this field and is designated as a national key "Little Giant" enterprise. Despite this strong positioning, the company's performance deteriorated just over six months after listing.
On August 29, Isvision released its 2026 semi-annual report. Revenue reached 109 million yuan, down 13.03% year-on-year, while net loss attributable to shareholders widened to 37.0982 million yuan from 5.0991 million yuan in the prior-year period. Non-GAAP net loss also expanded to 44.2586 million yuan, compared to 10.1159 million yuan a year earlier. The company attributed the revenue decline to two factors: intensifying profit pressure across the automotive industry, with profit margins for large-scale industrial enterprises dropping from 4.8% to 3.8% in H1 2026 per the National Bureau of Statistics, and the seasonal nature of its revenue, which is susceptible to fluctuations in individual project execution. For the profit decline, Isvision cited three reasons: an 16.3146 million yuan reduction in revenue; a 13.3097 million yuan increase in selling expenses due to a low base created by share-based payment reversals last year; and an 11.2817 million yuan rise in administrative expenses from post-listing governance improvements, expanded management headcount, and listing-related intermediary fees.
The downturn was already visible in Q1. On April 30, Isvision reported first-quarter revenue of 27.2874 million yuan, up 37.70% year-on-year, but a net loss of 30.178 million yuan, with losses expanding 59.19% and basic EPS at -0.36 yuan. The company pointed to seasonal factors and low Q1 revenue as a share of the annual total, alongside the low comparison base from last year's share-based payment reversal.
A longer view reveals a striking contrast between pre- and post-IPO performance. In the three years before listing, results were impressive. In 2022, revenue was 223 million yuan with net profit of 6.1186 million yuan. In 2023, revenue surged 58.98% to 355 million yuan and net profit skyrocketed 853.54% to 61.0567 million yuan. In 2024, revenue grew 10.58% to 392 million yuan with net profit up 40.01% to 85.6423 million yuan. In 2025, revenue expanded roughly 14% to approximately 448 million yuan, but net profit fell about 8.4% to 78.46 million yuan, marking the first signs of profit pressure despite growing sales. By H1 2026, that trend had evolved into simultaneous deterioration in both revenue and profit.
Auto parts sector hardest hit by IPO price breaks
Among the eight stocks trading below issue price, automotive parts and interior components companies accounted for five, representing over half of the breakdowns. Leading the decline is Tongling Technology (920187.BJ), which fell more than 65.41% from its 29.62 yuan issue price to 17.08 yuan by September 18, despite climbing to 49.38 yuan on its debut day. Its issue P/E ratio stood at 14.47 times. Founded in August 2007, the company supplies major clients including Shanghai GM, FAW Audi, FAW Volkswagen, Shanghai Volkswagen, Dongfeng Peugeot, and Dongfeng Nissan. It specializes in R&D, manufacturing, and sales of plastic automotive parts and related molds, positioning itself as one of China's leading producers of INS/IMD automotive products. Its H1 2026 revenue fell 16.89% to 404 million yuan, with net profit down 63.20% to 32.0875 million yuan. Revenue from fuel vehicle interior parts dropped 22.77%, reflecting the sharp contraction of the domestic fuel vehicle market and intensifying competition in a stock market.
In its semi-annual report, Tongling stated that the industry's profit environment continues to deteriorate, with vehicle manufacturing entering an era of razor-thin margins. The automotive industry's profit margin has fallen to around 1.5%, well below the industrial average, and several major listed automakers have issued profit warnings. Automakers are responding by streamlining model lineups, tightening channel inventory, and expanding overseas operations, while business models relying purely on domestic volume have become ineffective.
Qiaoluming (920079.BJ), which listed in late July at 14.36 yuan per share, closed at 13.02 yuan on September 18, down 9.33%. The company is a high-tech enterprise focused on automotive trim parts and components, including interior and exterior trim, new energy vehicle components, and supporting molds. Tongbao Optoelectronics, trading on the Beijing Stock Exchange since February 26 at 16.17 yuan per share, closed at 15.34 yuan on September 18, down 5.13%. Founded in 1991, that company manufactures LED semiconductor light-emitting devices and automotive lighting modules for domestic and international lamp and vehicle manufacturers.
Caution over primary-secondary market valuation gaps
Isvision's R&D spending reached 59.92% of revenue in H1 2026. Hu Jun reflected: "Previously, high R&D intensity signaled a tech company willing to invest. Now I want to know when that investment converts into products, and when those products convert into orders." Isvision's issue P/E ratio was 90.39 times, versus the industry's average static P/E of 44.28 times over the past month. Hu acknowledged that he will pay closer attention to whether valuations match share prices in future investments.
Several high-profile tech stocks have seen sharp post-IPO declines this year. Unitree Robotics (688836.SH), dubbed the "first humanoid robot stock," listed on the STAR Market a month ago at 150.80 yuan per share, drawing intense speculative interest. Its debut day high reached 1,100 yuan on August 19. By September 18, the stock closed at 514.98 yuan, down over 50% from its peak, while market capitalization halved from around 440 billion yuan to roughly 200 billion yuan.
On September 17, Chen Wenhui, former vice chairman of the China Banking and Insurance Regulatory Commission, warned at the 2026 Huang-Bohai Innovation and Entrepreneurship Conference: "We must be vigilant about the valuation inversion between primary and secondary markets. The primary market is showing clear 'localized overheating.' Overall, the market remains on an upward trajectory, but some segments have become overheated, with primary valuations sometimes exceeding those in the secondary market. This warrants serious attention." Chen noted that if primary market valuations are higher, listed companies will face downward pressure on their stocks, potentially triggering breaks below issue price, which undermines market health. He emphasized the importance of leveraging the Hong Kong market, which connects international investors and can foster a more scientific, rational, and sustainable valuation system for primary and equity investment markets.
A senior executive at a leading optical communications firm said localized overheating exists in certain industries and investment segments. Citing robotics tracks like Jusheng Intelligent, he noted market enthusiasm continues to escalate and urged investors to maintain a rational outlook. From an investment perspective, the market favors quicker commercialization and sustained long-term technology evolution. "Capital market sentiment is cyclical and volatile, so investment institutions should remain pragmatic. I recommend all portfolio companies raise as much capital as possible while market conditions remain favorable and financing windows stay open. Ultimately, you need to look up at the stars while keeping your feet on the ground," the executive said.