--- title: "[Hong Kong IPO] Zhaowei Electromechanical, Estun, and Youlesai issue at low prices. Let's talk about the pricing logic for Hong Kong new shares and sound a warning bell for everyone." type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/39078282.md" description: "According to news, the pricing for Zhaowei Electromechanical and Estun has been confirmed. Zhaowei Electromechanical is priced at HKD 71.28, 3.3% lower than the upper limit, while Estun is priced at the lower limit of HKD 15.36, and Yulesai at the lower limit of HKD 11. Why do I mostly refer to the upper limit pricing when making IPO subscription decisions? Because a low upper limit is definitely a positive signal, but a high upper limit followed by a lower limit pricing is not necessarily so (except for previous pattern-based clawbacks). As mentioned before, the pricing of Hong Kong stock IPOs is often based on an anchor institution order system (cornerstone investors are pre-negotiated and must take the shares even if reluctantly)..." datetime: "2026-03-05T08:13:50.000Z" locales: - [en](https://longbridge.com/en/topics/39078282.md) - [zh-CN](https://longbridge.com/zh-CN/topics/39078282.md) - [zh-HK](https://longbridge.com/zh-HK/topics/39078282.md) author: "[每天打个新](https://longbridge.com/en/profiles/16231871.md)" --- # [Hong Kong IPO] Zhaowei Electromechanical, Estun, and Youlesai issue at low prices. Let's talk about the pricing logic for Hong Kong new shares and sound a warning bell for everyone. According to news, the pricing for Zhaowei Electromechanical and Estun has been confirmed. Zhaowei Electromechanical is priced at HKD 71.28, a 3.3% reduction from the upper limit, while Estun is priced at the lower limit of HKD 15.36, and Yulesai at the lower limit of HKD 11. Why do I mostly refer to the upper limit pricing when making new share subscription decisions? Because a low upper limit is definitely positive, but a high upper limit followed by a lower limit pricing is not necessarily so (except for previous allocation tricks). As mentioned before, Hong Kong IPO pricing is often anchored to an institutional order book system (cornerstone investors are pre-negotiated and must take the shares even if they don't like it). This means if a limit order is placed, the institution will quote an acceptable price ceiling. If the final issue price exceeds this ceiling, that quoting institution will not be on the allocation list (those who really want it will place market orders, taking shares at any price). Therefore, non-upper-limit pricing essentially boils down to three scenarios: **1\. No demand for the shares, institutions pressure the company, forcing it to lower the issue price (negative);** **2\. A price pre-negotiated between the company and major players (positive);** **3\. Due to poor market conditions or other factors, the company actively 'gives up profit' by lowering the issue price to stabilize post-listing prices and achieve a more 'appealing' post-listing stock performance (positive).** After the new rules, meme stocks are everywhere, and most non-upper-limit pricing falls into the second scenario. However, A+H shares generally don't have strong major players, for three reasons: **1\. Anchored by the A-share price, you can't pump it too outrageously unless you pump both sides simultaneously, which is a lot of effort for little gain;** **2\. A+H shares automatically enter Stock Connect, reducing another motivation for market cap management;** **3\. Generally, the starting point for market cap management is mostly the need for existing shareholders to reduce their holdings. For A+H shares, you can just sell on the A-share market; there's no need to wait a year in Hong Kong. Therefore, most A+H listings in Hong Kong are driven more by financing needs.** So, what are some cases of non-upper-limit pricing after the new rules? I'm too lazy to check them one by one, so I let Doubao run a query for me. Spot-checked a few and didn't find any issues. You all can take a look too. If the data is wrong, let me know, and I'll go yell at Doubao. ![image](https://pub.pbkrs.com/uploads/2026/4f4529698063496e820b089861eedec3?x-oss-process=style/lg) Look at the chart above. I've circled the stocks that are most likely market-driven. Most of these are A+H or U+H dual-listed stocks, along with some first-time listed stocks that have fallen quite badly, which I feel also lack major players. The reasons for their lower-limit pricing are generally the first or third scenarios. The uncircled ones are most likely meme stocks with major players, i.e., the second scenario (except for Kanye and Wo'an, I basically know which firms did the others). These are not within our discussion scope. Let's look at the performance of the circled new stocks. ![image](https://pub.pbkrs.com/uploads/2026/cc0e4d83440cf9563b74e1261ebe08c0?x-oss-process=style/lg) Among them, Zhuozheng Healthcare and Meilian Shares broke their issue price due to low lot sizes and low winning rates under Mechanism B for small-cap stocks—the former had 9,500 lots, the latter 8,200 lots. They surged on opening-day sentiment premium but have since broken issue price. The other 5 large-cap stocks have a minimum of 15,000 lots and a maximum of 100,000 lots, making them relatively comparable to the two A+H stocks this time (Zhaowei Electromechanical: 27,000 lots, Estun: 48,000 lots). Now let's look at the performance of these 5 stocks. It can be seen that the probability of breaking issue price is greater than that of rising, whether in the grey market, on the first day, or in cumulative gains/losses. ![image](https://pub.pbkrs.com/uploads/2026/63f59cd3b5585fd2c8169c175d1cb296?x-oss-process=style/lg) Mind-blowing, right? Shouldn't low pricing be positive? Why does the performance seem even worse? The reason is precisely the first and third pricing logics I mentioned above. If it's not negotiated pricing, **either institutions think the price ceiling is too high, forcing the company to lower the price, or the company is being generous and giving profits to the market. Judging from the results, the first possibility is clearly more likely.** Therefore, I often say that for A+H shares, I don't like to bet on 'conscience.' If the discount rate isn't sufficient, I'll give up. Because if the pricing is high, to make money, you essentially have to bet twice: first, bet on it having low pricing; second, bet that the reason for the price cut is benevolence, not lack of demand. These probabilities multiply, and frankly, neither probability is very high. Of course, there are exceptions, like Guoen Technology, but that's a small probability event. **I think applying for ten Guanghetong just to bet on one Guoen Technology is really a bit of a loss.** Now the pricing results are out. The allocation results will be out later. Grey market trading starts tomorrow. Those who have already applied can't cancel their orders. Although I personally didn't apply for any of the three A+H shares this time, I naturally still hope those who did will make money. The main reason for writing this today is that there are no new shares again, and I didn't know what to write about, so I'm giving everyone a primer on the pricing logic of new shares. Also, to sound a warning bell for everyone, manage your expectations. Tomorrow, if Zhaowei Electromechanical and Estun make a small profit or don't lose much in the grey market, just sell. Don't think everyone is a Guoen Technology or a GigaDevice. Low pricing is naturally positive from a price perspective, but there are other factors. Stay rational; don't let so-called positive news blind you. If we're really talking about positives, it most likely just reduces the difficulty of price stabilization by the greenshoe option. For example, two years ago when housing prices were high, everyone rushed to buy. Now that prices have halved, no one is buying. Same logic. As for Yulesai, it's a mini stock with only 4,000 lots. Lower-limit pricing actually increases the probability of it being cornered. It's probably going to be quite a meme stock tomorrow. Good luck to everyone~ ### Related Stocks - [00638.HK](https://longbridge.com/en/quote/00638.HK.md) - [02692.HK](https://longbridge.com/en/quote/02692.HK.md) - [003021.CN](https://longbridge.com/en/quote/003021.CN.md) - [02715.HK](https://longbridge.com/en/quote/02715.HK.md) - [002747.CN](https://longbridge.com/en/quote/002747.CN.md) - [300638.CN](https://longbridge.com/en/quote/300638.CN.md) ## Comments (1) - **知轨道 · 2026-03-06T09:19:29.000Z**: Boss, what's the deal with Youlesai? The grey market price just completely tanked.