[HK IPO] Review of Q1 2026 Hong Kong Stock IPO Application Performance

As the first quarter of 2026 gradually draws to a close, the 2025 annual reports of various listed companies are also being released one after another (although each release seems to be followed by a drop).

I won't write about the annual reports, as reviewing over 100 new stocks from 2025 would be far too lengthy. However, since there are no new stocks today, we can review the performance of the first quarter of 2026.

Without further ado, let's look at the chart first.

So far this year, a total of 32 stocks have been listed (excluding the batch that hasn't opened for grey market trading yet). Overall, the performance of new stocks has been quite good, with only 3 breaking their issue price in the grey market, and only 1 breaking its issue price on the first trading day.

According to statistics, we have 2 stocks with a five-star rating, with an average grey market gain of 61.1%; 10 stocks with a four-star rating, with an average gain of 28.15%; 17 stocks with a three-star rating, with an average gain of 58.6%; and 3 stocks with a two-star rating, with an average gain of 30.92%.

It seems that for two-star, three-star, and four-star rated stocks, a higher rating doesn't necessarily mean better returns? But actually, there are three outliers here: four-star Youlesai Sharing, three-star BBSB, and two-star Lexin Outdoor. Let's look at them one by one.

First is Youlesai, the only stock this year that broke its issue price in both the grey market and on the first trading day. The company basically has no fundamentals. So why did I give it four stars? Take a look at the previous strategy:

Youlesai is that standard type of stock that can play the public placement but can't get the institutional placement, just like Dahongpao. Looking at the issuance structure, the 4,000-lot supply will push retail investors' reluctance to sell to the extreme, so it's highly likely you can exit at the opening and make a decent profit. In comparison, Zhaowei Electromechanical's discount rate wasn't enough, and the other two were already pumped, so by comparison, I gave it 4 stars, the highest priority in that batch.

Subsequently, I also told everyone in the group to sell immediately at the opening.

If you sold immediately at the opening, what kind of return could you get? The answer is around 145%, instantly promoting it from the worst performer to a top-tier one.

Then there's BBSB. There's not much to say about this one. It's a GEM board stock with 3,000 lots, and it clashed with the 'Four Guardians': Tianshu, Zhipu, Jingfeng, and Minimax. From a capital priority perspective, if I had told everyone to focus on this, I would have been quite unprofessional.

Finally, Lexin Outdoor. I really don't know if this stock has any major players, but its fundamentals are indeed abstract. From a risk perspective, I didn't participate. However, judging from the performance of the other two two-star stocks in the grey market (-8.2% and 0.14%), the two-star rating still has some merit.

If we remove BBSB and replace Youlesai's grey market return with 145%, the corresponding returns for each rating tier are as follows:

What do you think? Still pretty good, right? (Lexin Outdoor was not removed; if removed, the data would look even better.)

Furthermore, from this review data, we can draw two more useful conclusions:

1. 56% of new stocks had a better grey market price than their first-day price, with an average premium of 22.5%. For the other half where the first-day price was better, the average premium over the grey market price was only 16.9%. Therefore, if you sell in the grey market, there's a higher probability of getting a better price (if you have many allocations, you can consider selling in batches).

2. There is a certain positive correlation between margin financing multiples and grey market performance, which can serve as a reference. However, the correlation with first-day performance is relatively lower.

Also, HBG posted a chart a couple of days ago, summarizing the gains and losses of these 2026 new stocks as of March 24th. I think it's very representative.

Among the 17 stocks that rose, 10 were rated 4-star or 5-star, accounting for 58.8%.

Among the 18 stocks that fell, only 2 were rated 4-star or 5-star (Wolao Nuclear Material and Youlesai Sharing). All the others were 2-star or 3-star rated.

What do you think? The credibility just shot up, didn't it?

Additionally, the star ratings for some stocks place more emphasis on fundamentals. For example, Kailesi, although its fundamentals are quite average and it's expensive (three-star), since it can make money, it doesn't really matter.

It turns out the main force that first smashed and then pulled was actually the neighboring Zejing, while Kailesi was relatively stable. LMAO~