02797

$QIYUNSHAN FOOD(02797.HK) dropped -40% on its second day of listing. The first southern sour jujube stock, which surged +205% on its debut, has completed a year's worth of roller coaster in just two days😵‍💫

The old script for Hong Kong small-cap IPOs: oversubscribed 1600 times, frenzied speculation on the first day, and a stampede on the second. A fundraising pool of just over 100 million simply can't handle the in-and-out flow of speculative capital. Southern sour jujube cake brings in 300 million in annual revenue and 50 million in profit—it's a solid small business, but has little to do with the peak market cap of 2.4 billion inflated by speculation.

At this current level, should we wait for it to fall back near the HK$8 issue price before reconsidering, or blacklist it from now on? I choose the former to observe—the fundamentals are real, it's just sentiment that's expensive.