The first suspension broke and fell by nearly 27%, causing NEW GONOW RV (00805) to become a "wealthy stock" with 9.17 million Hong Kong dollars?

On January 13th, "China's leading RV company" NEW GONOW RV (00805) successfully listed on the Hong Kong Stock Exchange, with an issue price of 1.27 Hong Kong dollars per share and 2000 shares per lot. The net proceeds were approximately 253 million Hong Kong dollars, with a market capitalization of 305 million Hong Kong dollars. Huatai International acted as the exclusive sponsor, overall coordinator, joint global coordinator, joint bookrunner, and joint lead manager. However, the stock opened lower. Specifically, NEW GONOW RV opened at 0.98 Hong Kong dollars, a 22.83% drop from the issue price. The stock continued to decline, falling by over 26.77% at one point. At around 9:58 am, the stock rebounded to -3.94%, but the momentum was insufficient, leading to further declines. The stock closed at 0.98 Hong Kong dollars, a 22.83% decrease. NEW GONOW RV's first day trading volume was 8.738 million shares, with a turnover of 9.1765 million Hong Kong dollars and a total market value of 960 million Hong Kong dollars. Calculated per lot of 2000 shares, without considering transaction fees, there was a loss of 580 Hong Kong dollars per lot. There were two significant attempts to raise the stock price during the trading day that were unsuccessful. Despite the poor performance of NEW GONOW RV at the end of the listing day, there were still funds actively trying to increase the price, with two notable attempts. The first attempt occurred from 9:53 am to 9:58 am, with the largest increase from a 21.26% loss to 3.94%. The trading volume was 276,000 shares at 9:58 am, with a turnover of 325,500 Hong Kong dollars. The second attempt to raise the price happened at 2:15 pm in the afternoon, reducing the loss to 14.96%, with a trading volume of 166,000 shares and a turnover of 177,400 Hong Kong dollars. Looking at the flow of funds, there was a significant outflow of funds from institutional investors starting from 11 am, with 338,800 shares, 117,000 shares, and 91,000 shares flowing out accordingly. Throughout the day, the total inflow of funds for the stock was 2.618 million Hong Kong dollars, with 245,200 Hong Kong dollars from middle-sized investors and 2.3729 million from small investors; while there was an outflow of 3.5659 million, with 338,800 from institutional investors, 235,300 from large investors, and 342,700 and 2.6491 million from small and medium investors. In short, the majority of the fund flow for the stock came from small investors, but the outflow from institutional and large investors led to a downturn in the company's stock price. In fact, the performance of NEW GONOW RV on its first day of trading seems to hint at the reasons behind the sharp decline. Firstly, public information shows that the subscription for the company was relatively low. In this IPO, NEW GONOW RV offered 24 million shares for public sale in Hong Kong, representing 10% of the total offering, with an oversubscription of 2.52 times, but without activating the clawback mechanism. There were 2,044 applicants, and the chance of winning in the public allotment was 80.04%. Additionally, the international offering had 21,600 shares, accounting for 90% of the total shares, with an oversubscription of only 1.01 times. An additional 15% was reserved for over-allotment. Without cornerstone investors, the free float for NEW GONOW RV, with its small market cap, seems quite large. Secondly, the grey market performance of NEW GONOW RV was poor. By the closing, the Livmore Securities grey market trading showed a price of 0.99 Hong Kong dollars, a 22.05% decrease from the offer price of 1.27 Hong Kong dollars. Each lot increased by 2000 shares, without transaction fees, resulting in a loss of 560 Hong Kong dollars. After the sharp fall on the first day of listing, who stepped in to pick up the stock? Public information shows that HSBC Securities (Asia), Guangda, Futu, CCB International, CICC, and Zhongyin International appeared on the buying side, purchasing 380,000 shares, 296,000 shares, 268,000 shares, 244,000 shares, 216,000 shares, and 128,000 shares respectively. The largest seller was HUILI, selling 676,000 shares. Pressure from overseas markets is still present Looking at the fundamentals, there are still positive aspects to NEW GONOW RV. According to the prospectus, NEW GONOW RV is a RV company with a wide business network in Australia and New Zealand, designing, developing, manufacturing, and selling customized mobile homes. According to Frost & Sullivan, by revenue and sales volume in 2023, New Geo ranks second in the RV industry in Australia and New Zealand. In the six-month period ending June 30, 2021, New Geo delivered a total of 1,330, 2,127, 2,694, and 1,427 RV units to customers, with growth of 59.9% and 26.7% from 2021 to 2022 and 2022 to 2023, respectively. In terms of financial performance, New Geo achieved revenues of approximately 300 million yuan, 499 million yuan, 720 million yuan, and 422 million yuan respectively during the reporting period, with profits of around 25.08 million yuan, 32.956 million yuan, 78.768 million yuan, and 40.43 million yuan during the same period. Over the past three and a half years, New Geo's profits have totaled 177 million yuan. According to the prospectus, the company's revenue mainly comes from RV sales, sales of used RVs, and other (revenue generated from the sale of RV parts during after-sales service), with RV sales being the main source of revenue, accounting for 99.6%, 99.9%, 98.7%, and 94.1% from 2021 to 2023 up to the first half of this year. In terms of market focus, New Geo's battleground is not in China, but mainly in Australasia, which includes Australia and New Zealand. The revenue from Australia during the reporting period was 280 million yuan, 471 million yuan, 676 million yuan, and 400 million yuan, accounting for 93.5%, 94.4%, 93.8%, and 94.9% of total revenue during the relevant period; while revenue from New Zealand was 19.30 million yuan, 27.70 million yuan, 44.30 million yuan, and 21.60 million yuan, accounting for 6.5%, 5.6%, 6.2%, and 5.1% of total revenue during the relevant period. According to Frost & Sullivan data, the RV markets in Australia and New Zealand have a relatively concentrated structure. According to the sales data for 2023, the top five participants in the RV markets in Australia and New Zealand collectively hold about 55.4% market share, with NEW GONOW RV accounting for approximately 6.8%.% market share. In addition, based on revenue projections for 2023, the top five players in the Australian and New Zealand RV market collectively hold approximately 52.0% market share, with NEW GONOW RV holding around 7.8% of the market share.However, it was discovered that although on the surface New Age has a strong position in the Australian market, in reality its situation is quite awkward. This is because the sales gap between New Age and the top seller, Jayco, is very large, and there is not a significant distance between New Age and its competitors behind. In 2023, Jayco sold approximately 12,600 RVs in Australia and New Zealand, with a market share of 31.5%, while the sales gap between New Age and the third, fourth, and fifth place competitors is only a few hundred units, with market shares around 6%. In other words, the RV market in Australasia is still in a situation where one dominates and many compete. New Age not only needs to play the role of a follower in the near future, but also must be an excellent defender.