IPO subscription in Hong Kong stocks: Covered some shorts on ZHUCHA and sold half, initial subscription plan for Hengrui Medicine and MIRXES-B!
1. Green Tea Group $GREEN TEA GROUP(06831.HK) opened high and closed low in the dark pool. Since all the institutional placements were cornerstone investors, meaning 50% of the shares cannot be traded, the downward pressure in the dark pool was entirely due to retail investors cutting losses.
Brother Cai quietly picked up some panic-stricken chips at 6.3X yuan in the dark pool.
On the first day, China Merchants Bank supported the price in the auction, stabilizing it above the issue price. Brother Cai sold half at 7.19 yuan, making a profit of over 10 points.
On the first day, it opened flat, and Brother Cai sold half, securing a safety cushion. He is in no hurry to sell the remaining half and will consider it later.
After all, Green Tea Group's institutional placement was 7.2 times oversubscribed, which is quite high. Meanwhile, Little Garden has dropped 6 points in three days. Green Tea Group seems to be a stock that retail investors are bearish on, but institutions feel it's not bad.
2. Hengrui Medicine $HENGRUI PHARMA(01276.HK), the leader in A-share innovative drugs, is well-known for its solid fundamentals.
Despite the downturn in A-share innovative drugs for several years, Hengrui's A-shares have stood out like a crane among chickens.
However, when it comes to IPO subscriptions for A+H shares, fundamentals are just one factor. Others include the size of the new share issuance, the underwriters, cornerstone investors, and the H-share discount rate.
① Discount rate
Based on Hengrui's A-share closing price of 53.69 yuan yesterday, the H-share discount rate is approximately 23%-28.7%.
What are the comparable peers for Hengrui Medicine H-shares?
Hengrui Medicine focuses on innovative drugs, so only companies with over half their revenue from innovative drugs are comparable.
Currently, A+H companies with innovative drugs as their main business include BeiGene, InnoCare Pharma, and RemeGen.
As of writing, BeiGene's H-share discount rate is 44.5%, InnoCare Pharma's is 56%, and RemeGen's is 23.44%.
In terms of discount rates, Hengrui is clearly aligned with RemeGen, with reasonable pricing and little room for arbitrage.
② Cornerstone investors
Hengrui's cornerstone investor lineup is exceptionally strong, including GIC, Hillhouse Capital, and Invesco Capital, on par with CATL's.
③ Underwriting team
However, Hengrui's underwriting team is far inferior to CATL's.
Apart from Morgan Stanley, which is decent, Huatai and Citigroup have notorious reputations.
In summary, Hengrui Medicine is reasonably priced, with a cornerstone investor lineup on par with CATL, but its underwriting team is lacking, making it less certain than CATL.
Brother Cai might skip the subscription or use cash. He'll decide next week!
3. MIRXES-B$MIRXES-B(02629.HK)
A Singaporean biotech B-share.
Its performance is terrible; MIRXES-B is a speculative stock.
However, MIRXES-B has decent gambling potential.
First, no B-share IPO has broken on the first day in two years. Additionally, lead underwriter CICC has a seven-win streak, and CCB International has a six-win streak.
The only risk for MIRXES-B is the margin financing multiple. If it gets too hot, it's dangerous.
Thus, the subscription plan for MIRXES-B can only be finalized the night before the IPO closes, mainly by monitoring the margin financing multiple. Hopefully, it won't get too hot!
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