That time I subscribed to the IPO of Huajian Future with a B-lot, I was completely fooled by the 'grey market price closing flat'.

When I was writing this, Huajian Future (06132) had been hovering around HKD 35 for three weeks, down nearly 57% from its issue price of HKD 81.8. The people who posted "got the B-head lot" in my social media circle that day haven't spoken up since. I was one of them.

Looking back, this stock kept giving me "safe signals" from start to finish. I only blame myself for accepting them all.

June 19th IPO, 2006x oversubscribed

I actively went for the B-head lot in Huajian Future, I wasn't pushed by the brokerage. The reason seems pretty stupid now—there was a cluster of new listings back in June. Luxshare, Puyuan, Dingtai High-Tech had just finished their wave. The money in my Longbridge account had been sitting idle for two days, the interest wasn't worth it, so I just wanted to find a stock to catch it.

Flipping through the prospectus: 18A innovative drug, PS over 400x, valuation doubled in a year, issue price HKD 81.8—each of these numbers alone is a red flag. But back then, I was dazzled by another number: public oversubscription 2006x, top margin 692 lots.

That bit of FOMO in my heart: "If they dare to fight for 2000x, what's my B-head lot?"

The margin interest was based on Longbridge's annualized 3.2% rate back then. The B-head lot required over HKD 5 million to leverage up, with interest accrued over the 5-day subscription period, roughly over HKD 2,100—I calculated this cost, but still clicked confirm. Now I think, this is the most common "sunk cost fallacy" in IPO applications: to avoid wasting the quota, you end up digging a hole for yourself.

June 22nd Phillip grey market, closed flat at 81.8

On the grey market day, I was eating wonton noodles at a cha chaan teng, scrolling through Phillip on my phone on the table—closed at 81.8, exactly the same as the issue price.

Futu was at 79.1, slightly down -3.3%, but Phillip was "flat." Someone in the group shouted, "It's stable, the grey market didn't crash, at least +10% on the first day." I also breathed a sigh of relief, even wondering if not selling on the grey market meant "selling at a loss."

Now reviewing, this was a classic trap:

Huajian's international placement was only 6x oversubscribed, institutions cold, retail hot → the structure was already skewed.

During the grey market, the international placement had already sold 3.03 million shares, accounting for 41% of tradable shares → institutions left first.

Phillip's grey market retail side was propped at 81.8, relying on "retail investors buying from each other + a small amount of price stabilizer support," not real strength.

But I didn't see through this layer back then. The illusion that grey market flat = safe was the most poisonous piece of candy Huajian gave.

June 23rd first day, 81.8 nailed for a minute, then withdrawn

The opening price was 81.8. CLSA (the price stabilizer) nailed the opening price there for just a minute before withdrawing.

I stared at Level 2. The buy orders suddenly disappeared. Then the brothers in the B-group margin started cutting—broke issue price by 1%, 2%, 5%... by the afternoon session it was over 40%+, closing at 35.26, -56.89%.

I remember the B-head lot allocation was 200 shares (exact number subject to the allotment announcement, but it was around that magnitude). The paper loss was over HKD 9,300, plus the HKD 2,100 margin interest. This whole operation lost me HKD 11.4k, tying up over HKD 5 million in capital for five days. The IRR was negative and unviewable.

The person in the group who shouted "it's stable" changed their post in the afternoon: "B-head margin interest HKD 2,100, paper loss HKD 9,300, total HKD 11.4k. Who's going to compensate me for my opportunity cost these past few days?" No one replied.

Post-analysis: Huajian's structure shouldn't have been touched in the first place

Now analyzing calmly, Huajian hit all four red flags:

PS 400x + 18A no profit → valuation anchored to similar A-shares, but weak pipeline, you get hit first when the beta withdraws.

International placement 6x vs public 2006x → institutions won't take it, retail fights for it, a stampede structure.

June Hang Seng Index nine consecutive down days → 18A beta is the most sensitive, kneels first.

Phillip grey market closed flat → not strength, it's retail investors buying from each other + symbolic price stabilizer support. Futu was already slightly broken, giving a signal I didn't understand.

During the same period, Libang Pharmaceuticals debuted +103.54%, Huajian -56.89%—both are 18A, the difference is pipeline + cornerstone investors + PS position. In the screening framework I wrote about in that popular science article (A+H anchor / cornerstone / industry beta), Huajian only touched the "18A label" among the four items. No wonder it broke.

Lessons for next time's specific operations

📌 Stocks that break issue price > 10% on the grey market are basically hopeless on the first day—Tongrentang Healthcare grey market -15.09%, first day -39%, textbook.

📌 Be even more wary of stocks that close flat on the grey market but have cold international placement and are already slightly broken on Futu—Huajian was exactly this. Phillip's flat was an illusion.

📌 Calculate B-head margin interest + break issue price percentage together, not just look at the subscription rate. My IRR on this Huajian B-head lot was negative, essentially "using the quota just for the sake of using it."

📌 18A stocks with international placement multiple < 10x + public > 500x, avoid by default—this structure has already screwed people over two or three times in the first half of 2026.

End

Huajian is now around HKD 35, and I haven't sold. 18A stocks like this are inherently pipeline gambles. Waiting for some clinical data or BD news might bring back a breath. But IPO application is IPO application, holding is holding—I've moved this position from my "IPO account" to my "speculative small position" and won't count it in my IPO calculations anymore.

How many in the Longbridge community applied for the Huajian B-head lot this wave? Those who didn't sell on the grey market, those who cut on the first day, and those like me still holding on—raise your hand in the comments. Also, which stock hurt the most for your B-head lot? Tong Shifu -49 or Huajian -57?