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2019 Hong Kong IPO Analytics - How did insti and retail coverage impact deal performance

Since the inception of our IPO research in 2015, the Aequitas Research team has covered over 452 IPOs, which raised over US$100m each, across the Asia Pacific (excluding Korea and China A-shares) and the US (Asia linked listings).

For this insight, we used data from the prospectus, company filings and market data to analyse 52 IPOs in Hong Kong that took place in 2019 and raised at least USD 100 m. We looked at IPO performance for deals under various brackets in the category of the book color for both retail tranche and the institutional tranche. Some of our findings include:
- Institutional book coverage was a good indicator of post-listing performance but the classification is vague. Deals that were significantly oversubscribed returned 18.3% on average, more than deals that were barely covered. There were exceptions, i.e. hot deals that didn’t do well on the first day. - Top five performers that were significantly subscribed were all Health Care deals.
- We studied the correlation between post trade performance and the coverage of institutional and retail investors. Our statistics show that there had been fair opportunities to trade hot deals post listing.
- Combining institutional book color and retail book color improved the chance of being profitable in the post listing trade.