The atmosphere for new stocks is heating up, with two new stocks set to launch this week: optical and hybrid computing power supplier Xizhi Technology (1879) and mainland pharmaceutical company Mabwell (2493). Subscriptions will close this Thursday (23rd), attracting considerable investor interest. Liang Jiewen, an investment manager at Hong Gao Securities, stated in an interview with Sing Tao Daily that many recent new stocks have recorded significant gains, and he believes these two new stocks will be no exception, particularly highlighting Xizhi Technology, which has an AI concept, but noted that it is very difficult to get allocated shares. Additionally, Wu Lixian, a securities strategist at Everbright Securities International, mentioned that the resurgence of the US-Iran war has no direct impact on the new stock market, and he expects market funds to continue to be enthusiastic.

Xizhi: Introducing GIC and Temasek as cornerstone investors

Focusing on the optical hybrid computing power sector, Xizhi Technology plans to issue 13.795 million H shares, with 5% available for public offering in Hong Kong. The offering price ranges from HKD 166.6 to HKD 183.2, aiming to raise up to HKD 2.53 billion. Each lot consists of 15 shares, with an entry fee of HKD 2,775.7. It is worth noting that although the initial allocation is 5% of the offered shares, according to the 18C special technology company clawback mechanism, if the public offering is oversubscribed by 50 times or more, the number of shares can be increased to 20%.

The prospectus shows that Xizhi Technology is building a product and solution portfolio centered on optical interconnect and optical computing, supported by its self-developed optical hybrid chip technology, providing scalable and cost-effective solutions. Of the net proceeds, 70% will be used for research and development, including the continued development of optical interconnect and optical computing businesses; 20% for commercialization efforts; and 10% for working capital and general corporate purposes.

In addition, Xizhi Technology has already secured investments from Tencent (700) and several "national team" funds before its listing. The cornerstone investors include Alibaba, the Government of Singapore Investment Corporation (GIC), Baillie Gifford, BlackRock, Fidelity International, Schroder, Temasek, Shanghai Zhongyi Fund, Hillhouse's HHLRA FUNDS, UBS AM, 3W Fund, Aspex, CPE Fir, Jinglin, GF Fund, Lenovo (992), Future Asset Securities (Hong Kong), ZTE Corporation (763), ICBC Wealth Management, and Ping An Asset Management, with total investments reaching USD 210 million.

Mabwell: Offering price at nearly a 30% discount to A shares

On the other hand, Mabwell, which focuses on the research and development of drugs for tumors and age-related diseases, plans to issue 47.13 million H shares, with 10% available for public offering in Hong Kong. The offering price ranges from HKD 27.64 to HKD 30.71, aiming to raise up to HKD 1.45 billion. Each lot consists of 200 shares, with an entry fee of HKD 6,204. CITIC Securities and Haitong International are the joint sponsors.

It is noteworthy that Mabwell's A shares (688062) closed at RMB 37.88 on April 20, equivalent to HKD 43.52, indicating that the H shares are at a discount of approximately 29% to 36% compared to the A shares The prospectus shows that Mabwell focuses on the research and development of drugs for tumors and age-related diseases, covering oncology, immunology, ophthalmology, and orthopedics. The company currently has 4 listed products and 10 new drugs under research, including 1 drug in the NDA stage, 8 drugs in clinical stages, and 1 drug in the preclinical stage. Of the net proceeds, 56.8% will be used for clinical development trials of the core product 9MW2821 for various indications at different stages; 17.7% will be used for the research and development of other pipeline products targeting tumors and age-related diseases with significant clinical demand; 15.5% will be used for commercialization purposes; and 10% will be used for working capital and other general corporate purposes.

The stock has introduced 6 cornerstone investors, including Junshi Biosciences (1877) under Junshi Hong Kong, Sanjin International, Guohui Hong Kong, Changrong International, WuXi Biologics (2269) under WuXi Biologics Venture, and Zhonghe Capital, with a subscription amount of $53 million.

Wu Lixian: Not worried about the impact of the Middle East situation

When asked about the recent resurgence of tensions in the Middle East and whether the market would be concerned about dragging down the performance of new stocks, Wu Lixian believes that the new stock market is mainly driven by the strong performance of recently listed shares, and the enthusiasm for capital will continue for these two new stocks. Since both stocks have relatively small fundraising amounts, around 1 billion and 2 billion respectively, the final oversubscription multiples will be relatively high under a low base.

Regarding the difficulty of winning allocations, which is of great concern to retail investors, Liang Jiewen frankly stated that it is very difficult to win, as the shares allocated to retail investors are extremely limited. In terms of subscription strategy, Liang Jiewen suggested that if funds are sufficient, it might be worthwhile to adopt a margin strategy to obtain more shares, as the final oversubscription is expected to be nearly a thousand times, with limited financing risks. In contrast, Wu Lixian took a conservative attitude, suggesting that retail investors observe the subscription response in the first two days and tend to rely mainly on cash subscriptions.

Liang Jiewen: Opening day increase expected to exceed 50%

Regarding the potential increase on the first day of listing, Liang Jiewen is extremely optimistic, believing that many recent new stocks have recorded considerable increases, and he believes these two will be no exception, expecting an increase of over 50% on opening day. He is particularly optimistic about Xizhi Technology, believing its concept is unique and related to the recently popular AI concept, and that the strength of cornerstone investors and shareholders is robust, making it absolutely worth looking forward to in the medium to long term.

Wu Lixian also stated that from Xizhi Technology's performance over the past few years, its growth rate is relatively fast, but the downside is that the company is relatively small in scale. He believes that looking back at recently listed companies related to computing power, this sector has received relatively high market attention.

Regarding dark market strategies, Wu Lixian reminded that both companies are currently still in a loss-making state, making it difficult to calculate valuations based on past profits, and the listing performance is highly dependent on the final pricing and market atmosphere. He advised that the price trend of new stocks is always difficult to predict, and if the dark market price shows a significant increase, such as over 30%, in a profitable situation, investors might consider "locking in profits" first.

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