Rate Of ReturnHK IPO outlook: China Resources Beverage and Horizon Robotics
Yesterday, many friends privately messaged me about their expectations for China Resources' performance. I intermittently monitored the grey market, and the overall trend was quite in line with expectations. As mentioned in the previous article, this stock has some room for IPO subscriptions, with relatively small fluctuations. A 10% increase was within expectations.
The overall allocation situation for China Resources was also quite ideal. However, most people expected a 100% one-lot winning rate, but the actual rate was only 30%. I had anticipated a 50% one-lot winning rate, which was probably the most accurate prediction online.
The A-tail group got 41 lots, while the B-head group only got 29 lots. It’s rare for the A-tail to outperform the B-head, which also indicates that under the current single-account system, most people are concentrating their funds in the B-group, especially the B-head. Many mid-to-large investors often overlook the A-tail.
In the past, IPO subscriptions could be spread across multiple accounts with one-lot strategies, but this approach is no longer viable. Even if there’s a promising new stock, you can’t blindly go for the B-group. Going with the flow, we’ll need to analyze the cost-effectiveness between the A-tail and B-head in the future.
In the grey market, retail investors were mostly selling, while institutional and large investors were buying. Notably, the 950 seat appeared multiple times. During the peak of IPO frenzy, the 950 seat was an emotional indicator. Veteran IPO subscribers almost all know that if it appears in the buy-side seats, the stock won’t fall the next day, at the very least.
As long as Hong Kong and A-shares don’t drop significantly today, a 10%+ increase is expected. If it were me, I’d start selling gradually after a 10% increase. If market sentiment pushes it to 20%, I’d sell everything.
As I’ve said before, this stock has arbitrage potential for IPO subscriptions, but I’m not optimistic about its long-term trend. For specific reasons, refer to the previous article—no need to repeat them here.
Now, let’s talk about Horizon.
I usually spend 5-6 hours reading a prospectus, which I consider quite inefficient. Due to time constraints, I only spent about half an hour skimming the key points of Horizon’s prospectus before deciding not to subscribe.
This year, subscription trends have been relatively conservative. Unless there’s strong news, I’ve mostly avoided stocks that don’t meet my basic criteria.
Coincidentally, a friend privately messaged me about Horizon the day before the subscription deadline.
I reached out to a few industry professionals and got some insights into the stance of major institutional funds. Surprisingly, many institutions were quite positive about Horizon.
Personally, I don’t fully understand their optimism, but in the current IPO landscape, institutional funds’ attitudes matter more than retail investors’.
Moreover, recent funds have been flowing into Hong Kong and A-share tech and chip stocks, which could also boost Horizon’s momentum.
From a capital perspective, I subscribed to a bit of Horizon.
The latest news is that Horizon’s international placement is around 12x, not the rumored 16x.
Among them, the long-term investment firm Baillie Gifford took about $300 million, Norway’s central bank around $50 million, other long-term funds split roughly $100 million, and some short-term hedge funds took about $50 million.
This international placement structure is completely different from HiPhi’s. Baillie Gifford, in particular, is a well-established long-term investor with a conservative approach. The fact that Horizon attracted such long-term funds reflects the broader institutional sentiment.
With the recent hype around tech stocks, Horizon has more growth potential than China Resources. If the grey market hits 30%, I’ll sell everything. I expect at least a 15% increase, assuming tech stocks don’t drop today.
My stance on Horizon is the opposite of China Resources. While both are for IPO arbitrage, Horizon is worth tracking long-term.
For pure IPO subscribers, just sell on the grey market or the first trading day. No matter how good your ex is, she’s not yours anymore!
Publishing before 9 AM—no time to fix typos!
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