[HK IPO] Listed on the same day, Jinghe +9% Binhua -23% — Regarding the AH discount, we still need to pay attention to the A-share market trend.
Yongkang's listing is delayed, and there should be no new IPOs this week. Before getting to the main topic, let me quickly kneel in apology. It's a case of one oversight after many precautions, as the saying goes, you can't walk by the river without getting your shoes wet. So, friends, you'll forgive me, right? At the time, I thought "the profit wouldn't be huge, but it shouldn't break the issue price." Unexpectedly, Binhua still broke the issue price. Fortunately, I only lost a few hundred bucks (fidgeting).
Alright, back to the topic, let's talk about today's grey market:
JCET Group (02249.HK): The grey market showed a steady trend, reaching a high of HKD 38.1 during the session, and is currently quoted at HKD 35.34.
Binhua Co., Ltd. (06745.HK): The grey market plunged significantly, with a drop of up to 22.70%.
Both stocks were part of the same IPO batch, with AH share discounts around 52%, yet their grey market returns differed by over 30 percentage points. The underlying logic is actually quite simple: the intraday performance of A-shares today is the core variable determining the strength of tonight's AH new share grey market.
01 Why such a big difference? Look at the A-share side first.
Today, the A-share semiconductor sector saw a broad and strong rebound. JCET Group's A-share surged 11.45% in a single day, closing at CNY 65.21, a very strong recovery. Yesterday, the stock's AH discount was about 54%. As the A-share price rose sharply, the logic for H-share discount recovery was directly realized, with southbound capital and arbitrage funds flowing in simultaneously, driving the grey market to close up 9.41% at the time of writing.
In contrast, Binhua Co., Ltd.'s A-share price remained unchanged today, closing at CNY 5.74, with 0% change. The chemical sector had no positive catalysts throughout the day, and the hydrofluoric acid theme saw no capital follow-up. The H-share received no support from the A-share market. The stock's issue price was HKD 3.48. It opened directly down to HKD 3.00 in the grey market, a 13.8% drop, continued to weaken, hitting a low of HKD 2.48, and closed at HKD 2.69 at the time of writing, a sharp 22.7% decline.
Comparing the two stocks side by side directly reveals the core logic of AH share IPO subscriptions: the discount is just a static number on paper. Whether the recovery can be realized largely depends on the A-share trend.
02 JCET Group (02249)
What we said initially was better quality, stronger cornerstone investors, extremely low risk of breaking issue price, but limited upside. Treat it as a stable play, don't expect a big rally. The judgment can be said to be completely correct, a small gain of +9.41%. With A-share semiconductors being so strong today, it's normal for H-shares to follow. However, the context of yesterday's batch of AH stocks collectively breaking issue price lowered everyone's expectations for today.
Going forward, if A-share semiconductors can maintain their strength, JCET's discount recovery logic will truly kick in. Having a greenshoe means inclusion in Stock Connect requires waiting 30 days. During this period, changes in the AH price gap are the main observation indicator.
03 Binhua Co., Ltd. (06745)
We initially said the discount logic held, it could be participated in, with managed low expectations, while also pointing out the core risks: net profit stagnating for three years, hydrofluoric acid accounting for only 0.4% and with negative gross margin, and a strong conceptual element. Today's result is that all risks materialized—the hydrofluoric acid concept found no takers on the Hong Kong side, and the chemical AH discount simply couldn't recover without a catalyst in A-shares.
Today's low of HKD 2.48 is 28.7% lower than the issue price. If anyone used margin to subscribe to this stock, don't blame me (plz). I was right in saying the discount logic held but expectations should be managed low, and I didn't strongly recommend it. However, saying it could be participated in was indeed too optimistic based on today's result. This counts as me taking a fall (but not completely, because it was too influenced by A-shares, so dddd).
My Closing Remarks
This round of 16 new IPOs has concluded. Only one manipulated stock showed a bright performance throughout, while the rest were more or less dragged down by the recent market, with AH shares performing weakly overall.
Market ups and downs are the norm; don't let short-term pullbacks erode your confidence. The market will recover after corrections. Don't forget the joy of pocketing big gains from previous IPOs. Stay calm and wait for the next opportunity.
SK Hynix ADR is pricing tonight. I wonder how many friends are paying attention?
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