XIAOMI announced the results of the placement on the Hong Kong Stock Exchange today, announcing that the price per share was set at HK $17.00. The final number of shares in the Hong Kong public offering was 108980000, accounting for about 5 per cent of the total number of shares available for initial subscription in the global offering, which received applications for 1034986800 shares, equivalent to 9.5 times oversubscribed. The offer shares initially offered by the International offer were slightly oversubscribed, and the final number of shares allocated to the International offering Placees was 2397542000, equivalent to 110 per cent of the total number of shares initially available for subscription in the global offering.
According to the dark market trading platform, XIAOMI closed at HK $16.10, down 5.9% from its share price and better than market expectations. However, in terms of turnover, less than $10 million is not high, and it is of little significance to guide the actual direction of the market.
Source: Futu Securities
Prior to this, media statistics show that the total share capital of XIAOMI's diluted green shoes this time may exceed 25 billion shares, with a total market capitalization of about HK $426.5 billion, or about US $54.3 billion, calculated at the issue price of HK $17.
Note: the exchange rate of the Hong Kong dollar refers to the lowest level of 7.85.
Recently, the performance of the Hong Kong stock market is cold and weak, and the A-share market is even more gloomy. The negative news brought by market sentiment naturally fills the market. For XIAOMI, who is standing on the stage under the spotlight, it is easier to be further magnified. It seems that more than one place has received XIAOMI's dark trading results announced by the major brokerages offering margin subscription, showing that XIAOMI has "broken" in the dark market. This only added variables to XIAOMI's performance on the first day of listing on July 9. the divergent points of short-term speculators focused on XIAOMI's "broken" and "unbroken" on the first day, while long-term investors cared more about "value" and "not worth". Or fall "copy" and "do not copy".
However, although the market is in the doldrums, we should still have confidence in the connotative value of XIAOMI. There are some updated details in the market.The stability of XIAOMI's share price tends to be enhanced and supported, while the instability is being digested by the market.
一、XIAOMI can carry out risk management on the first day of listing.
On the evening of July 4, the HKEx announced that XIAOMI Group (01810.HK) will be listed in Hong Kong Exchanges and Clearing on July 9, XIAOMI shares will be included in the list of approved short selling designated securities, and XIAOMI futures and options will also be launched on July 9.
It is worth noting that futures and options are introduced on the first day of listing, which is not common in the Hong Kong stock market. China Literature, Zhongan Online, Yixin Group and Ping An Healthcare And Technology, previously known as the four major unicorns of Hong Kong stocks, did not launch option futures on the first day of their listing.
Moreover, in terms of the number of participants and the amount of frozen funds, XIAOMI is actually the most "low-key". Then why does the HKEx want XIAOMI to open all professional asset management tools (including individual stock options, futures, derivatives and short selling) to hedge risks on the first day of listing?
(1) on the one hand, the author believes that the HKEx attaches great importance to the first listed company with "different rights of the same share". By improving the trading hedging mechanism and reducing volatility, the HKEx attracts more professional investors to participate in XIAOMI's trading, which is conducive to the stability of XIAOMI's stock price.
（二）On the other hand, we can analyze the subscription results. In fact, among the investors who successfully applied for XIAOMI this time, the proportion of large investors such as long-term investors, cornerstone investors, institutional investors and international investors is actually far more than that of retail investors. The professional level of the former and the evaluation of XIAOMI's true value are estimated to be obviously better than the latter. If they can control the risk of market volatility without selling stocks, it can increase the probability of their holding time and confidence. The HKEx aims at XIAOMI to launch these businesses to reflect the needs of customers. We can see that relevant consultation and research have been conducted beforehand, so we understand that the willingness not to sell is far greater than the willingness to sell.
According to industry insiders, XIAOMI may be included in the Hang Seng Composite Index 10 trading days after listing, setting a record for Hong Kong stocks to be included in history. Judging from these clues, the HKEx is "loving and loving" to XIAOMI. If investors believe that the HKEx has a clear idea, they have to calm down.
Second, activate the green shoe mechanism to enhance stability.
This time, XIAOMI IPO launched the "green shoes mechanism", the over-allotment option mechanism, and issued about 200m new shares through green shoes, much more than the 108 million shares sold in Hong Kong.
Under the green shoe mechanism, when oversubscription is allowed, the issuer will issue no more than 15% more shares. In case of a break after the stock listing, the listed company can entrust the underwriter to use the funds raised by the multi-issued shares to buy back the same amount of shares below the issue price for write-off, so as to achieve the purpose of stabilizing the issue price.
In addition to the measures introduced by the Hong Kong Stock Exchange to stabilize XIAOMI's share price, XIAOMI used the green shoe mechanism to enhance its own certainty of stability. Therefore, the current situation is that stability trumps everything, which is the general direction of correct interpretation. Investors must not stand on the wrong side and be defeated by emotion over reason.
Retail market, VS institutional market?
A few days ago, Hong Kong media reported that the number of subscribers for XIAOMI was 110000, and the overall success rate was 100%. In terms of the distribution structure, more than 25000 people were assigned one hand, 15000 people were assigned two hands, and the largest family in the large group applied for 10 million shares, and finally received 972000 shares, that is, 4860 shares, with a success rate of 9.72%. Analysis of these figures shows that the goods are almost in large investors, and the concentration of chips is higher than that of Zhongan Online, Ping An Healthcare And Technology and Yixin Group in the past.
If it is assumed that retail investors make investment decisions on the first day of listing by looking at the results of dark market trading, and large investors can participate in the risk management tool opened by the Hong Kong Stock Exchange for XIAOMI to hedge risks, the impact and selling pressure can be predicted in the end. it's not as big as you think.
In addition, from the analysis of oversubscription data and margin, the highly leveraged participants in this subscription are not expected to be many, and the "break" pressure on the overall margin covering position will not be too great, and the possibility of being forced to cut positions is low.
The author noticed thatMarket rumors XIAOMI's dark market has recorded hundreds of millions of transactions, in the dark period of time before the official opening of the panic market early release, fully change hands. In addition, do we still need to think calmly about it? if we are not optimistic about who will take over with a large amount of money, those who are not firm will all leave the market, and leveraged futures and options and other tools will be provided. instead, what we have to think about is, whether the short side should guard against the risk of being forced into a position because of the concentration of chips.？