Innovative Industry (02788) surged more than 30% in the dark market, top institutions flocked to subscribe, Hong Kong stock IPO was highly sought after.

On November 21, Innovation Industrial (02788) saw a significant increase in the afternoon dark pool trading on both the Bright Smart and Futu exchanges, with Bright Smart rising by 30.57% to close at HK$14.35 and Futu rising by 26.02% to close at HK$13.85. The total trading volume was HK$650 million, equivalent to approximately US$83 million, with very active trading. As a leader in the outbound expansion of the Chinese electrolytic aluminum industry, the company's IPO not only ignited market enthusiasm with a lineup of luxurious cornerstone investors and strong oversubscription, but also became a star new stock in the Hong Kong stock market this year due to its clear global strategy, ample cash flow, and significant valuation advantages. It is reported that Innovation Industrial received enthusiastic pursuit of funds during the public offering stage. According to brokerage data, the international allocation of the IPO was oversubscribed by more than 40 times, attracting over 300 top global institutions to place orders, including sovereign wealth funds, top international long-term investors, and many other influential institutions. At the same time, a large number of retail investors rushed in, with the Hong Kong public offering being oversubscribed by nearly 450 times, making it a rare high-demand new stock this year with a hot market participation. Based on the current fundraising size, the amount raised by Innovation Industrial in this offering is expected to rank in the top ten for the year and could enter the top three for IPO fundraising amount. At the same time, Innovation Industrial also received strong support from 17 heavyweight cornerstone investors in this IPO, with investments totaling $351 million from investors including Hillhouse Capital, CHINAHONGQIAO, and Taikang Life Insurance. This luxurious lineup and strong financial strength further confirm the company's core position and investment value in the industry. The dual empowerment of the industry's cyclical prosperity and internationalization strategy further enhances the investment value of Innovation Industrial. The electrolytic aluminum industry is benefiting from the global manufacturing recovery and the development of the new energy industry, leading to strong market demand. Leveraging its first-mover advantage and precise understanding of the industry's cyclical prosperity, the company has become a leader in the internationalization trend of the industry. Saudi Arabia, as the core location for the company's overseas expansion, is a strategic move. The stable and low-cost energy supply in the area perfectly complements the energy-intensive nature of aluminum production, while the massive manufacturing expansion in the Middle East provides a broad local market for the company. This forward-looking layout not only allows Innovation Industrial to successfully seize the growth dividend of the Middle East's electrolytic aluminum industry chain but also lays a solid foundation for continuous capacity expansion and industry upgrades in the future. Financially, Innovation Industrial's performance is also remarkable. According to the prospectus, revenue is expected to increase from RMB 13.49 billion in 2022 to RMB 15.163 billion in 2024, with annual profits rising from RMB 913 million to RMB 2.63 billion. According to the report by the commodity research firm CRU, the company's ability to manage the cash costs per ton of aluminum places it in the top 5% of all electrolytic aluminum refining companies in China, providing strong support for its ongoing capacity expansion and industry upgrading through ample cash flow and efficient operational management. Furthermore, Innovation Industrial's valuation advantage is worth noting. The company's IPO corresponds to a 2025 P/E ratio of only 7.9 times, representing a 30% discount compared to comparable companies in the Hong Kong stock market. In the current volatile market environment, this undervaluation not only leaves ample room for future growth but also forms a rare "golden opportunity for entry." Institutions generally believe that with the continued improvement in the electrolytic aluminum industry's prosperity and the release of capacity in Saudi Arabia, the company's valuation recovery momentum is strong, and it is expected to achieve a "Davis double-click" in the future.