HK IPO Subscription | Impression Dahongpao: Small Cap & Fujian-based, Believe It or Not!

This is the third article about the six-stock collision this round, still providing an additional option to give Fujian-based fans an explanation.

The last Fujian-based IPO was Lemo Technology, and everyone should have made some money. This time, the biggest highlight is still it. Fujian-based + niche + small-cap stock—will it create another miracle?

The sector is decent, and tourism has been recovering in recent years. Friends with some spare cash will go out and explore.

But its performance was okay in previous years, but this year it's a bit sluggish. In 2022, it was 63 million, and in 2024, it was 137 million, growing rapidly. However, in the first half of 2025, it was 55.88 million, only an 8% increase compared to 51.51 million in the same period last year. In terms of profit, it was only 6.77 million in the first half of 2025, a 46.6% drop compared to 12.68 million in the same period last year. Revenue grew slightly, while profits fell, mainly due to the impact of the newly launched "Moon Over Wuyi" in May this year, as there were significant capital expenditures and investments upfront. Most of its revenue and profits come from the summer vacation and Golden Week in the second half of the year, so the first-half figures aren’t very meaningful.

Revenue and profits mainly come from the performance "Impression·Da Hong Pao," which holds an absolute monopoly in the Wuyi Mountain area but cannot be replicated elsewhere. Comparable to Songcheng Performance, but Songcheng can expand to multiple locations, while this one can’t—it’s still lacking.

The IPO market cap is HKD 500 million to 591 million, roughly RMB 537 million at the upper limit. Rolling net profit is 36.9 million, with a PE of about 14.55. Rolling revenue is 141 million, with a PS of about 3.8.

Songcheng Performance’s a market cap of 20.919 billion, a rolling PE of 26.33, and a rolling PS of 9.35. A blind premium of 30% for the leader and 40% for A-shares—by this measure, Impression Da Hong Pao’s valuation is reasonable.

It was previously listed on the New Third Board with almost no trading volume. The current market cap is RMB 325 million. Calculating an H-share IPO premium of 65% isn’t a big issue, as the New Third Board’s market cap isn’t very meaningful—there are precedents for 100% premiums.

The sponsors are Xingzheng International (Industrial Securities Group) and Kaisheng Capital, neither of which have any track record post-policy change. Kaisheng Capital usually sponsors small-cap stocks, and Xingzheng International typically sponsors niche Fujian-based small-cap stocks. This time, Xingzheng International sponsoring Impression Da Hong Pao aligns with their usual behavior. Based on Xingzheng International’s historical sponsorship records, this is likely another meme stock, so Impression Da Hong Pao might be a dark horse. But most of their historically sponsored stocks turned into penny stocks, so even if you win, you’d better exit early—no room for holding.

No cornerstone investors but with a greenshoe, but meme stocks shouldn’t count on the greenshoe. Usually, stocks betting on greenshoe discounts don’t pick small-caps like this.

Public offering is 3,610 lots—not much supply, likely a lottery for everyone. The frozen capital should ultimately rank just below pharmaceuticals and mining, higher than 18c. Expect many Fujian-based fans to subscribe—estimate HKD 50 billion first. About 3,400x oversubscribed, with an estimated 30% allocation for Group A tail and 50% for Group B head—Group B is likely better. The reason is that in a collision scenario, the squeezed-out funds are mostly leveraged, while Group A’s retail investors won’t decrease much—Group A is bound to be packed. If you want to gamble, go for Group B.

This time, there’s also fragmented institutional placement, but not on Futu—slightly better. If the fragmented placement were on Futu, I’d probably pass.

Can’t estimate the potential gain—how much it rises depends entirely on the whims of Fujian-based big players. But it’s likely similar to Bama Tea, around 50%, which would be a satisfactory gain for me.

Fujian-based players are also the best at manipulating meme stocks. If you want to bet on a dark horse, this is a decent gamble.

Whether it’s worth subscribing depends on the allocation rate. If the oversubscription doesn’t exceed 4,000x, it’s still playable. But it can’t be too low—below 2,000x, just pass.

In a collision scenario, after passing on the ones you don’t want, you’ll have to consider the allocation rate. Now, allocations are arbitrary—scared of becoming the next Guoxia Technology, where Group A tail subscribers were just cannon fodder.

There’s intel that new stocks will launch next Monday. This collision scenario just got more complicated. The mining stock I originally planned to subscribe to might attract more capital, leading to a sharp drop in allocation rates. Because mining and Monday’s new stocks don’t conflict.

Also, moomoo’s U.S. stocks collide with these. The U.S. stocks close on the 16th afternoon and release on the 17th night—suggest subscribing on Monday to prevent early closure.

The above conclusions are based on my analysis of public information and do not constitute professional investment advice. Please think twice before acting.

$IMPRESSION DHP(02695.HK)