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PostsCR Beverage's safety cushion has increased, Horizon Robotics IPO analysis!
Both A-shares and Hong Kong stocks surged on Friday.
On the news front, multiple policies resonated: first, major banks began to cut deposit rates; second, the previously announced stock purchase relending officially took effect today; third, the saying "How many chances does one have to gamble in life?"
Nongfu Spring$NONGFU SPRING(09633.HK) rose sharply along with the broader Hong Kong market, closing up 5.3%.
This has raised the safety cushion for the hot IPO China Resources Beverage$CR BEVERAGE(02460.HK), improving its odds slightly.
However, China Resources still can't be considered a sure bet because:
First, rumors suggest the lottery rate for one lot is now 100%, and even Group B can get tens of thousands of shares, meaning retail investors hold too many chips. The gray market will become a race to sell first.
Second, although Nongfu surged today, unless it maintains or continues to rise next Monday and Tuesday, China Resources still isn't safe.
Brother Cai didn't subscribe to China Resources, as its certainty is far lower than Nongfu Spring.
If you're bullish on China Resources, you might as well have gone all-in on Nongfu Spring two days ago—your returns would be impressive by now!
Next, let's talk about the final IPO, Horizon Robotics$HORIZONROBOT-W(09660.HK).
.........
I. Qualitative Analysis of Horizon
In Brother Cai's IPO system, new listings are categorized into three types:
High-certainty IPOs, gambling IPOs (bets), and arbitrage IPOs. The subscription strategies differ for each.
High-certainty IPOs must be heavily subscribed or even all-in, like Carote.
Most gambling IPOs (bets) should be skipped, with only a small portion lightly subscribed.
Arbitrage IPOs depend on valuation discounts—examples include Midea Group and China Resources Beverage.
So, which type is Horizon Robotics?
Brother Cai classifies Horizon as a gambling IPO.
Reasons:
① Years of consecutive losses with minimal improvement
As shown, adjusted profits remain in the red. The latest H1 2024 saw only a 22% reduction in losses—don’t expect profitability before 2026.
② Sky-high valuation
As a loss-making stock, only PS valuation applies.
Horizon’s 2023 revenue was HKD 1.71 billion. At the median offer price, its static PS is 29.4x—far pricier than this year’s gambling IPOs.
Using 2024 revenue (assuming 150% growth from H1), the dynamic PS is 19.6x, still absurdly expensive!!!
II. Subscription Plan
Since Horizon is a bet, the strategy is: mostly skip, lightly subscribe if at all.
Should you subscribe?
Brother Cai believes cold bets are preferable—hot bets are doomed (see Qiniu Intelligence, Taimei Medical, and Rongli Construction’s opening crashes).
Currently, Horizon isn’t overly hot, with 5.5x oversubscription at writing.
However, Horizon has another red flag: its massive float.
Its IPO size is HKD 50 billion—even larger than China Resources Beverage. Current liquidity can’t support such a huge float.
Thus, Brother Cai will skip it again!
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