An initial public offering (IPO) is a company's first sale of stocks, bonds or certificates of deposit to the public in order to raise funds for company development and future expansion. Before subscribing to an IPO, you should peruse the prospectus and compare the P/E ratios of peers in the same industry to evaluate the IPO shares.
Newly formed companies usually offer their shares for subscription at par values, whereas existing companies offer a discounted market price of their existing shares. You will get a chance to buy the shares at a relatively low price via IPO subscription.
If investors believe it has long-term potential, investing with the company right from the beginning will boost your net-worth substantially.
Hot IPOs always appeal to investors who anticipate that the demand for shares will outstrip the number of shares offered, leading to a sharp rise in the stock price on the listing day. Investors might expect quick returns with the huge demand, or take it a long-term opportunity in holding the equity.
IPOs are available on UTRADE Web for quick, easy and secure subscription anytime at your convenience.
You could trade the allotted shares via UTRADE Web or UTRADE HK Mobile App on the listing day with greater flexibility.
We offer cash or margin application. For margin application, you can customise loan ratio and amount on UTRADE Web to increase your investment capabilities. Unsuccessful or excess funds will be directly credited into your trading accounts.
You could receive new IPO notifications after installing our UTRADE HK Mobile App.
Clients can access detailed IPO information on UTRADE Web including prospectus, average performance on the first listing day, over-subscription ratio and IPO fact sheet with our exclusive analysis on company background, business strategy and future plans, competitive strengths and key risks.
New-to-market securities do not have historical performance/ data or other important details that publicly traded securities are required to offer. Investors should determine if investing in an IPO is within your tolerance for risk and appropriate for your investment goals. Before investing in an IPO, you should research the company to develop an understanding of its business model, fundamentals and management team, read the prospectus carefully and check out the growth and earnings potential of the company.
Much-anticipated IPOs often attract so much interest from the general public that the shares get driven to unreasonably high levels. Investors should prevent buying in at the height of the mania which leads to a disappointment with negative returns.
Investors shall not assume that the share price will necessarily rise above the offer price on the first day of trading. Performance of new shares will also be affected by the overall market sentiment and it is possible for the share price to drop below the offer price on the first day of listing.