Last week, we talked about Get Ready to Profit With HK IPO, Coming Soon on M+ Global. Today, we want to dive a little deeper into this topic and explore what's been happening in the world of Hong Kong IPOs. So, buckle up, and let's get started!

The Hong Kong stock market is relatively new to Malaysian investors. But as one of the largest IPO markets in the world, the Hong Kong stock market has attracted the attention of many companies and investors - both locally and globally.

Here are some of the advantages of HK IPOs:

1. Higher allotment rate

Many investors subscribe to IPOs for higher potential returns but are also worried they may not get an allotment. However, the distribution of HK IPO subscriptions is based on the policy of guaranteeing one subscriber to one board lot. In other words, each subscriber will get at least one board lot with the remaining shares then distributed on a diminishing basis. According to Wind data, in 2022, the average allotment rate of HK IPO was as high as 44.60%, three times that in 2021.

2. Low barriers to entry

HK IPO subscription is open to all investors as there is no minimum investment requirement. Additionally, most IPOs issue lower subscription prices due to the cheaper original pricing of IPOs and lower issue price of HK IPOs compared to the company's issue prices in other markets. For example:

• Xiaomi Corp (1810. HK) - Xiaomi was listed in HK in 2018 with an issue price of HKD17 (RM10) per share.
• Meituan (3690. HK) - Meituan was listed in HK in 2018 with an issue price of HKD69 (less than USD9/RM40) per share. It was listed on Nasdaq in the US the following year with an issue price of USD25 (RM115).
• Ping An Insurance (Group) Company of China (2318. HK, 601318. SH) - The issue price of Ping An Insurance (Group) Company of China in the A-share market is RMB33.8 (RM22) per share, while the issue price in the HK stock market is only HKD10.33 (RM6).

3. Comparatively huge number of IPOs

Global Top 5 stock exchanges

Hong Kong IPO sector distribution:

4. Margin financing with M+ Global

Margin financing refers to the use of financing funds provided by securities companies and banks to subscribe to IPOs, which means subscription with leverage. Different securities companies provide different leverages for IPOs. In the HK market, banks and securities companies provide financing services to investors.

Investors who have opened a margin account can subscribe to margin financing in stock trading, with a higher opportunity to increase profits. The financing leverage and amount supported by each new stock are different, investors can refer to the tips on the subscription page.

For example, the IPO price for Angelalign Tech (6699. HK) is HKD35,000, but you only have HKD3,500 in your account. Now, you can apply for 10 times leverage and get HKD35,000 (HKD3,500 x 10 = HKD35,000) to subscribe to this IPO.

Note that in this example, if an investor applies for 10 times leverage (90% financing), HKD3,500 is the investor's own money, and HKD31,500 (HKD35,000-HKD3500=HKD31,500) of the financing comes from the bank. But remember, this excludes financing interest and fees.

Under normal circumstances, securities companies or banks will charge a certain amount of interest for providing such services to investors. You can invest in stocks with a small amount of money.

Let’s take a look at the differences between HK and Malaysia IPOs, and the former’s unique advantages:

Factors	HK IPOs	Malaysia IPOs
Subscription method	Fast and easy application via the M+ Global app	1. Offline application: send the application form to MIH or submit an Electronic Stock Application (ESA) via an ATM 2. Online bank application
Market size	Large market size and a high number of listed IPOs (90 IPOs in 2022, raising approximately HKD 104.57 billion)	Smaller market size and fewer listed IPOs (35 IPOs in 2022, raising approximately MYR 3.5 billion)
Allotment rate	A larger number of issuances and a higher allotment rate	A smaller number of issuances and a lower allotment rate
Liquidity	Good liquidity	Limited liquidity

Finally, stay tuned for future articles where we'll be sharing more important information on this topic.

Exploring Hong Kong IPO Subscription through M+ Global, Read More:

1. Get Ready to Profit With HK IPO, Coming Soon on M+ Global

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