MARKETS & INVESTING | Staff Reporter, Hong Kong

Hong Kong's hottest IPOs lose steam as returns fall short

The 10 most popular stocks by retail subscription ratio fell 36% on average.

Bloomberg reports that the blockbuster IPOs Hong Kong has banked on to propel itself to the top of the IPO leaderboard this year has actually produced worst returns for investors than the least popular deals who have been quietly eking out gains. 

The ten most popular stocks by retail subscription ratio - from 36 offerings above US$100m - have crashed 36% on average, Bloomberg data show, whilst the ten deals with the lowest subscription average only dropped by an average of 4.8%.

Also read: Thriving IPO scene shows signs of pressure as stock markets slump

In fact, the widely anticipated debut of Ping An Healthcare and Technology Co., which has been 654 times oversubscribed, tumbled 37% since it started trading in May. Biotech firm Ascletis Pharma Inc, who was one of the first to cash in on the biotech hype, is also down 44% from its IPO price. Meituan Dianping is also not exempt from the downturn with an average 24% drop.

Also read: Ping An's debut fails to live up to hype

On the other hand, Redsun Properties Group Ltd., Zhenro Properties Group Ltd. and DaFa Properties Group Ltd. received individual orders filling just 0.8 times their retail books, on average but rose by an average of 18% from their IPO prices, putting them among the top five performers from deals above US$100m.

Innovent Biologics Inc. is the best performer after surging 35% despite the fact that its retail subscription ratio was only 1.1 times.

It has been a challenging market environment for equities on the back of souring investor sentiment brought about by the escalating US-China trade dispute and an ongoing slowdown in the world's second largest economy. Roughly 75% of Hong Kong IPOs in 2018 are trading below their offer prices.

Here's more from Bloomberg:

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