[HK IPO] Merdeka Gold, Indonesia's largest primary gold mine, is it worth applying for?
Hello, I'm Lu Xian. I research the investment field and share overseas information.
Last time I shared about [HK IPO] McAuto, a kidney disease innovative drug entering Phase III, is it worth subscribing? Today, let's look at a new gold-themed stock — Merdeka Gold. The company is already listed in Indonesia and is now coming to Hong Kong for a secondary listing. It owns Indonesia's largest primary gold mine, which has just started producing gold. Let's break it down simply and also talk about my trading strategy.
1. New Stock Issuance Overview
Company Name: PT Merdeka Gold Resources Tbk (06228.HK)
Global Offering Size: 89.6686 million Depositary Receipts
Hong Kong Public Offering Size: 8.9669 million
International Offering Size: 80.7017 million
Issue Price: HKD 26.60
Board Lot Size: 100
Minimum Subscription Fee (per board lot): HKD 2,686.82
Cornerstone Investors: Subscribed to approximately 44.7798 million shares in total, accounting for about 49.94% of the global offering
Greenshoe: Yes
Sponsors: UBS, CITIC Securities
Reallocation Mechanism: Mechanism B
Subscription Period: June 17 — June 23
Allotment Results Announcement: June 24
Grey Market Trading Time: June 25, 16:15—18:30
Listing Date: June 26
Market Cap: HKD 39.185 billion
Group A Tail: 1,000 lots
Group B Head: 2,000 lots
Top Hammer: 44,834 lots
2. Company Fundamental Analysis
Merdeka Gold is an Indonesian gold mining company, already listed on the Indonesia Stock Exchange, and is now conducting a secondary listing in Hong Kong through depositary receipts.
The company's core asset is the Pani Gold Mine. In terms of resource volume, this is Indonesia's largest primary gold mine, with approximately 7 million ounces of gold resources and 5.2 million ounces of ore reserves, with an estimated mine life of about 15 years.
The Pani Gold Mine produced its first gold in February 2026 and completed its first sale in March, marking its entry into the commercial stage. It is expected to produce about 108,000 ounces in 2026, increase to 505,000 ounces by 2030, and potentially reach a peak of 545,000 ounces in 2031.
The biggest advantage of this mine is open-pit mining, with an average stripping ratio of only 0.7:1. Simply put, less waste rock needs to be removed, giving it a relative cost advantage in mining. The company estimates the all-in sustaining cost excluding royalties to be about USD 794 per ounce, which is at a globally low level.
However, the company has mainly been in the mine construction phase and has not yet established stable gold sales and profits. Future performance heavily depends on whether the Pani Gold Mine can ramp up production as planned and whether gold prices can remain high.
Another important point to note: this offering consists entirely of secondary shares sold by existing shareholders, and the company will not receive any proceeds from the listing.
In other words, this is not a fundraising for expansion by the company, but rather a cash-out by existing shareholders. While it doesn't dilute current shareholders, it's generally not a positive factor for IPO sentiment.
Cornerstone subscription is close to half, the greenshoe ratio is 15%, with UBS and CITIC as joint sponsors, the offering structure is acceptable.
3. IPO Subscription Analysis and My Strategy
Regarding the nine new stocks clashing this time, how to allocate funds? My thoughts are on Planet. Merdeka Gold's biggest highlight is the gold theme. Pani is Indonesia's largest primary gold mine, with large reserves, low mining costs, and it has already started producing gold. If production ramps up as planned, profit elasticity could be significant in a high gold price environment.
The company is already listed in Indonesia, providing an existing price anchor, so it's not a completely valuation-blind IPO. The downside is the mine has just started production, and future production and costs are still projections. If construction progress, recovery rates, or gold prices fall short of expectations, valuation will be affected. A bigger flaw is that this offering is entirely a secondary share sale, and the company gets zero fundraising. The nearly 50% cornerstone subscription, while reducing short-term float, cannot hide the nature of shareholder cash-out.
This company's biggest highlight comes from the cornerstone investors. In this offering, cornerstone investors subscribed to nearly 50%, indicating high institutional recognition. If it were a standalone offering, the market might give it more attention. However, with 9 IPOs simultaneously fundraising, capital is significantly diverted, reducing its appeal.
Overall, the gold sector and mine quality are good, but the all-secondary share sale makes me hesitant.
My strategy: I will not subscribe.
$MERDEKAGOLD-DRS(06228.HK)
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