Rate Of ReturnCan we blindly subscribe to new stocks in Hong Kong again?
In the past week, the three new stocks listed were not of the best quality, but they still performed well in the gray market or on their debut.
$AUNTEA JENNY(02589.HK), was the most certain one among them, with the highest subscription enthusiasm and a very low winning rate. I didn’t bother much with my accounts for this one—just applied for 200 lots with one of my usual accounts and didn’t win.
The IPO was priced at HKD 113.120. The gray market opened at 140 (up 23.76%) and closed at 183.3 (up 62.04%). On the debut day, it opened at 190.6 (up 68.49%) and closed at 158.4 (up 40.03%).
In short, whether in the gray market or on the debut day, Auntie was profitable.
$BRETON(01333.HK), during the subscription period, was considered just a gamble, so I only applied for 10 lots in cash. The results came out during the May Day holiday, and the winning rate was much lower than expected—a classic case of allocation adjustment. The public subscription was oversubscribed by 198 times, theoretically requiring a 50% clawback to the public offering, but in reality, only 20% was clawed back.
The IPO was priced at HKD 18. The gray market opened at 22 (up 22.22%) and closed at 25.4 (up 41.11%). On the debut day, it opened at 29 (up 61.11%) and closed at 24.9 (up 38.33%).
In short, whether in the gray market or on the debut day, Boreadon was profitable.
$DRINDA(02865.HK), was of poorer quality—a dual-listed A+H stock with Huatai as the sponsor and stabilizing agent, which everyone fears. I didn’t participate in the subscription.
The IPO was priced at HKD 22.15. The gray market opened at 22.20 (up 0.22%) and closed at 22.15 (flat). On the debut day, it opened at 22.20 (up 0.22%) and closed at 26.60 (up 20.09%).
In short, after accounting for the 1.0085% winning fee and selling fees, selling Junda Shares in the gray market resulted in a slight loss; selling before the close on the debut day was highly profitable.
Looking at these three, the sentiment for HK IPO subscriptions is currently very good—especially with Junda Shares, a stock of such poor quality still managed a 20.09% gain. The recent HK IPO market is indeed worth keeping an eye on.
At this point, I pulled up some data on HK IPO debut gains. Of the 20 new stocks listed this year, only 5 have broken below their IPO price at the debut close:
Notably, none of the 5 new stocks listed since April have broken below their IPO price.
Let’s look back at the golden era of HK IPO subscriptions—2020 to 2021 was the peak:
Back in 2020-2021, selective participation in HK IPOs was incredibly lucrative.
From 2022 to the first half of 2024, HK IPOs were in a slump. Participation dwindled significantly during this period.
Fortunately, the HK IPO market is now recovering and regaining attention.
There’s another new stock open for subscription now—Green Tea Group, with the deadline at 9:00 AM on May 13. The quality is decent, and its valuation is reasonable compared to peers in the same sector.
One downside is that the sponsor is Citigroup, which has a poor track record:
For this one, I’ve applied for 20 lots in cash and will adjust based on the subscription multiple by the 12th.
Content creator: Dolphin Research
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