Core Viewpoint - The Hong Kong IPO market is experiencing a significant disparity between retail and institutional investors, with a trend towards "institutionalization" that poses potential risks [1][3] Group 1: Market Performance - The Hong Kong IPO market has shown a stark contrast, with some stocks like Lao Pu Gold achieving a cumulative return of 2163%, and 61% of the 77 newly listed stocks in the past year generating positive returns [1] - The first-day price increase ratio for new stocks reached 60%, attracting a large influx of investors [1] Group 2: Retail Investor Challenges - Retail investors are facing unprecedented challenges, with the subscription rate for popular new stocks generally falling below 10%, and in some cases, even below 5% [1] - The number of applicants for new stocks has surged, leading to intense competition; for instance, 24 stocks in 2025 had over 10,000 applicants, with NIO reaching an astonishing 310,800 applicants [2] Group 3: Institutional Shift - The ongoing institutional reforms in the Hong Kong market are shifting the allocation of new shares towards institutional investors, reducing the proportion available to retail investors [2] - Companies like NIO and Hengrui Medicine are applying for exemptions from the clawback mechanism to ensure a lower fixed allocation for retail investors, favoring institutional investors [2] Group 4: Market Dynamics - The concentration of shares among large investors may lead to unfairness for retail investors and could increase stock price volatility [3] - A market dominated solely by institutions is incomplete, and the ultimate goal of financial markets should be to allow investors of all sizes to share in economic growth [3] Group 5: Recommendations for Improvement - Suggestions for improving the IPO process include implementing a "universal" allocation mechanism similar to the U.S. model, which favors broader participation among retail investors [3] - Introducing a "retail investor intention solicitation" system could allow retail investors to submit non-binding bids before IPOs, enhancing price discovery [4]