Core Insights - Four new Hong Kong stocks listed on October 28, all closing with gains, including Dipu Technology up 150.56% and Bama Tea up 86.7% [1] - The new IPO rules effective from August introduced a "choose one" mechanism for public subscription, with Mechanism A increasing the maximum allocation from 20% to 35%, while Mechanism B allows issuers to set a fixed public offering percentage between 10% and 60% without a reallocation mechanism [1][2] - Mechanism B has become the preferred choice for most new listings, typically setting the public offering at 10%, which gives institutional investors more influence during the pricing phase [2] Mechanism Analysis - Mechanism B's fixed allocation leads to scarcity for retail investors, often resulting in oversubscription and strong buying momentum on the first trading day, driving stock prices up [2] - Among 22 new stocks using Mechanism B, 21 saw price increases on their first trading day, with the only exception being Guanghetong, which fell 11.72% on its debut [2] - Guanghetong's pricing was perceived as insufficiently attractive due to its pressured short-term performance, despite securing significant backing from cornerstone investors [3] Market Dynamics - The volatility of newly listed stocks indicates that relying solely on supply-demand imbalances to boost prices is not sustainable [3] - For instance, Jinye International Group surged 330% on its first day but subsequently dropped 74.88% over the following weeks, highlighting the risks associated with low public offering percentages amid high demand [3] - The shift in the Hong Kong IPO market is moving from "blind arbitrage" to a focus on fundamental value and market sentiment [3] Regulatory Perspective - The Hong Kong Stock Exchange's new IPO rules aim to enhance the robustness of pricing and allocation mechanisms while balancing the needs of various investors [4] - A healthy and mature new stock market is envisioned as a cycle of reasonable pricing by issuers, rational decision-making by investors, and responsible underwriting by underwriters [4]