Four new stocks listed on the Hong Kong stock market this year all fell below their issue prices on the first day of trading

On December 22, four companies listed on the Hong Kong stock market collectively broke their initial public offering (IPO) prices. At the close of the day, the first-day drop rates for HuaYuan Bio, BENQ HOLDING, NANHUA FUTURES, and IMPRESSION DHP reached 29%, 49%, 24%, and 35%, respectively. This marks the first occurrence in the Hong Kong stock market in 2025 where four new stocks collectively broke their IPO prices on the first day. BENQ HOLDING even set a record for the largest first-day drop for new stocks in the Hong Kong market this year. The previous holder of this "awkward" record was Conch Cement, which saw a drop of 48% on its first day of trading on January 5, 2025. Currently, these four new stocks remain deeply trapped in the quagmire of price drops. As of the time of writing, the intraday prices of BENQ HOLDING, HuaYuan Bio, IMPRESSION DHP, and NANHUA FUTURES on the second day of trading have still dropped by 48%, 42%, 38%, and 23% compared to their IPO prices. This is partly related to the overall pressure on the Hong Kong stock market, where the valuation center in the secondary market has shifted downward, directly compressing the premium space in the primary market. Since October this year, the Hang Seng Tech Index has dropped nearly 17%, with a maximum drawdown of 19%. At the same time, the continuous increase in the number of IPOs in the Hong Kong market has further exacerbated the "supply-demand imbalance." According to Wind data, which tracks IPO dates, the number of IPOs in the Hong Kong market reached 49 in the fourth quarter, an increase of over 90% compared to the third quarter. On the other hand, the average performance of fundamentals undoubtedly adds further pressure to new stock issuances. As an innovative pharmaceutical company, HuaYuan Bio has yet to achieve scaled revenue, with revenue close to 0 in the first three quarters of 2025; although BENQ HOLDING owns hospitals such as Nanjing BenQ and Suzhou BenQ, it still reported a net loss of 53 million yuan in the first half of 2025, a year-on-year decrease of nearly 25%. Overall, the first-day drop rate for IPOs in the Hong Kong market this year is not considered high. Throughout the year, 31 new stocks in the Hong Kong market broke their IPO prices on the first day, accounting for about 29% of the total number of new stocks during that period, a decrease of 7 percentage points compared to the entire year of 2024. However, looking at the fourth quarter, one might sense the "coldness" of the market. Nearly half of the 31 new stocks that broke their IPO prices this year occurred in this quarter, raising concerns about whether this will mark the beginning of a wave of IPO price drops in the Hong Kong market in 2026. If we extend the timeline, as of the closing price on December 22, a total of 45 new stocks have fallen below their IPO prices this year, accounting for over 40%. The challenges continue. The Hong Kong stock market may still maintain a high frequency of IPOs in 2026. Deloitte predicts that the number of IPOs and the amount raised in the Hong Kong market will reach 160 and HKD 300 billion, respectively, next year. Huatai Securities believes that the importance of selecting quality stocks for IPOs will become even more pronounced next year. "Based on historical data since 2016, considering the winning rate and capital occupation, the winning rate and overall expected returns for IPOs in the Hong Kong market are not particularly high. The key to achieving high returns is to filter out high-odds opportunities, as the main returns from IPOs in the Hong Kong market often come from a small number of high-quality, high-odds stocks "Hua Tai Securities pointed out. Risk Warning and Disclaimer The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investment based on this is at one's own risk