Abstract: The problems of inflated pricing and excessive returns of new shares on the Chinese stock market have been widely criticized by the market，and have been attributed to the imbalance between supply and demand caused by the control of the number and scale of issuing companies by the approval system. Therefore，with the establishment of the STAR Market，the registration system of the pilot is expected to improve the supply-demand relationship and the pricing efficiency. However，judging from the practice in the past year since the opening of the STAR Market，the IPO price，the initial P/E ratio and the return rate of the new shares have repeatedly set new highs on China’s stock market. The problem once again aroused the concern and worries of all parties. In order to investigate the rationality of IPO pricing of STAR companies under the registration system，this article adopts reverse engineering thinking first based on whether IPO pricing can effectively reflect the company’s intrinsic value，and uses the prospectus and the underwriter’s IPO data when the IPO price is known. Combining with the STAR Market attribute variables，we use the stochastic frontier model to calculate the potential effective frontier price. This price is an unbiased estimate of the intrinsic value，so as to determine the rationality of IPO pricing and its relationship with the effective frontier. Firstly，it is found that there is a significant lower boundary on IPO pricing，which indicates that there is no underpricing problem like mature markets but a significant overvaluation relative to its intrinsic value，with an overvaluation degree of 63.7%. A relatively high bubble appears in the issuance price of new shares. Therefore，it is not unreasonable to worry about the falsely high initial price of STAR companies. Secondly，we also test the cause of the higher return rate of new shares after the listing of companies. It is found that investors in the secondary market are obviously not paying enough attention to important indicators such as company fundamentals，technological innovation attributes and the other important indicators. The irrational speculation is still serious. This is the important reason for the stock price bubbles and the high returns on the secondary market. The research in this article shows that there are still major deficiencies on the pricing ability，selfrestraint and the maturity level of investors for financial intermediaries and issuers. Therefore，the quality of research reports on the investment value to underwriters and the ethical restraint on issuers，underwriters and institutional investors should be the focus of the supervisory authorities.

Keyword: STAR Market; registration system; IPO pricing; IPO high return