For the“highly underpriced Chinese IPO puzzle”，we propose Sai-GA-SVＲ method to judge whether the new issues are underpriced or overpriced from market characteristics． We analyze the IPO market characteristics under different policies in China，and the empirical results suggest that pricing regulations are the major cause of the underpricing，while the following reform brings severe IPO bubbles to the A-share market．Though the book-building system has alleviated the severity of underpricing，the overwhelming superiority of the institutional investors compels the private investors to speculate from hot issues，as a result of ineffective rent allocation．