The Combined Effects of Financial and Market Indicators on the Valuation of New Listings: Evidence from the Biopharmaceutical Sector

Abstract

This study confirms that financial and market data have a significant impact on the valuation of newly listed companies, especially in the biopharmaceutical industry. Using multiple linear regression models, this paper found significant differences in the impact of EBITGR and EBITDAGR on price-to-earnings ratio (P/E Ratio) across years. Other indicators such as Total Asset Turnover, Return on Assets (ROA) and Debt to Equity Ratio (D/E Ratio) have weaker explanatory power and unstable influence. In addition, fluctuations in market valuations of listed companies are influenced by market sentiment and the macroeconomic policy environment. In high-growth, high-risk industries such as biopharmaceuticals, regulatory policies and listing structure reforms in the market can cause structural changes in model performance. At the same time, changes in market sentiment and regulation can also affect the explanatory power of financial indicators to some extent. Further analyses showed that market preferences for valuation changed over time during the study period, especially when the market moved significantly, driven by regulatory policy and the external environment. This makes the conclusions of the study's findings subject to uncertainty in different market environments. Overall, this study reveals a number of key factors affecting the market valuation of newly listed companies and highlights the importance of the interaction between market data and financial indicators. In future research, more attention should be paid to the role of different time periods, market conditions and industry characteristics to avoid potential valuation traps and provide more informative support to market investors and managers.