Within one year, the valuation has doubled and the P/S ratio is over 400 times. HJ SCIENCE-B(06132) holds rare varieties, but the first day's decline of more than 50% could not be stopped.

In the first half of this year, the Hong Kong IPO market has hit a new high. As of June 25th, more than 84 new stocks have been listed on the Hong Kong Stock Exchange, raising a total of 209.8 billion Hong Kong dollars, an increase of 100% compared to the same period last year. The amount raised has exceeded the total amount raised in the Hong Kong IPO market for the same period between 2022 and 2025. In terms of oversubscription, the average oversubscription ratio for new stocks in the first half of this year reached 2628 times, which is 3.8 times higher than the same period last year. The average first-day return for new stocks reached 61%, with the first-day break rate dropping to 12%, reaching a five-year low. In reality, the main reason for the decrease in the first-day break rate of Hong Kong stocks is that in the first half of this year, "hard technology" companies have become the main drivers of the IPO market. These companies naturally have stronger market appeal and valuation tolerance, which has boosted the average first-day return rate for the entire market. However, the market does not have enough tolerance for all targets, as seen in the performance of HJ SCIENCE-B (06132) after its listing. More than 50% first-day break On June 23, Hua Jian Future officially listed on the Stock Exchange. It was observed that on the first day of listing, Hua Jian Future's stock price opened significantly lower than the issue price in the morning, with the price falling by a maximum of 40.10% within the first 20 minutes of trading, reaching a low of 49 Hong Kong dollars. Although the company's stock price rebounded slightly to above 50 Hong Kong dollars, it fluctuated again in the morning, ending with a decrease of 46.55%; after the afternoon opening, Hua Jian Future's stock price continued to decline in the morning and accelerated in the late trading, closing at the lowest point of 35.26 Hong Kong dollars, a decrease of 56.89%. Hua Jian Future's stock price performance on the first day of listing was related to the recent continuous decline of the Hang Seng Index. Since June, the Hang Seng Index has experienced a continuous downward trend. From June 3rd to June 11th, the Hang Seng Index experienced a continuous decline, falling from the BOLL line midline to the lower line on the chart. Although there was a rebound on June 12th and 15th, the index failed to touch the BOLL line midline, and subsequently, the index entered a "nine consecutive declines" trend. Hua Jian Future listed in a low market sentiment. When funds prefer high-growth innovative technology companies such as AI and semiconductors and concentrate on large-cap stocks, market sentiment will be reflected in new stocks. Observations show that, on the same day as Hua Jian Future's listing on June 23, Shenzhen Senior Technology Material (06067), which focuses on lithium battery separators, rose against the market by 22.49%. In addition to the recent environment of the Hang Seng Index, Hua Jian Future's stock price performance may also be related to its issuance strategy. According to the IPO plan, Hua Jian Future globally offered 13.6 million H-shares, with 90% for international offering, 10% for public offering, and an additional 15% for excess rights issue. The issue price was set at a fixed price of 81.80 Hong Kong dollars per share, raising a maximum of 1.112 billion Hong Kong dollars, with 100 shares per lot. The number of shares offered for public sale was only 13,600, and the subscription fee reached 8,262.49 Hong Kong dollars, higher than the average entry threshold for new Hong Kong stocks this year. Stocks with high entry fees often require leverage to increase the chances of winning. Therefore, during Hua Jian Future's IPO, investors saw a frenzy of leveraged subscriptions totaling 129.8 billion Hong Kong dollars, and the final data showed that the Hong Kong public offering portion was oversubscribed by about 2007.6 times. In the face of high leverage and market heat, Hua Jian Future experienced a lackluster performance in the grey market. For example, on June 22, Hua Jian Future opened at 81.80 Hong Kong dollars and jumped to 100.80 Hong Kong dollars, a increase of over 20%, and continued to rise, reaching a high of 159.60 Hong Kong dollars during trading, a gain of 95.1% from the issue price, almost doubling in value. However, the stock price then fell significantly after reaching its peak, touching a low of 73.85 Hong Kong dollars, a decrease of 9.7% below the issue price, before closing at 79.10 Hong Kong dollars, a drop of 3.30%. The trading volume for Hua Jian Future on that day reached 104.83%, with a turnover of 132 million Hong Kong dollars and an average trading price of 104.81 Hong Kong dollars. In terms of the issuance strategy, Hua Jian Future used "Mechanism B" for the IPO and established an issuance structure dominated by institutions, cornerstone investors, and anchoring investors. Like Shenzhen Senior Technology Material mentioned earlier, both companies had cornerstone subscriptions of around 45% and set a lock-up period of 6 months. However, besides the cornerstone lock-up, Shenzhen Senior Technology Material had 104 international underwriters and an oversubscription ratio of 14.34 times, with most chips being held by long-term institutions; while HJ SCIENCE-B's international offering had an oversubscription ratio of only about 7 times, with a relatively higher proportion of short-term "trading-oriented anchoring." Furthermore, as Hua Jian Future's IPO only had a single sponsor without the stable support of a joint underwriting team, in a turbulent market environment, if short-term "trading-oriented anchoring" chose to sell off at high levels, it would have a negative impact on the company's performance on the first day of listing, which may have contributed to the sharp drop in the stock price. Valuation has increased by nearly 100% in one year As a clinical-stage biotechnology company founded in 2017 with no approved commercial products, Hua Jian Future's three core products are positioned in the hot areas of its own immunity, metabolism, and tumor domains. The market prospects are vast, but competition is fierce. According to the prospectus, Hua Jian Future has developed a strategically designed differentiated product pipeline, including three core products HJ787, HJ178, and HJ891, all of which are independently developed small-molecule Class 1 innovative drugs approved by the National Medical Products Administration (NMPA). In addition, the company also has a clinical-stage candidate drug HJ197 (FGFR4 inhibitor, for hepatocellular carcinoma) and five pre-clinical candidate drugs that are all independently developed small-molecule Class 1 innovative therapies by the NMPA: HJ356 (Lp(a) inhibitor), HJ093 (new SMDC), HJ199 (ON-state RAS inhibitor), HJ198 (KRAS G12V molecular gel), and HJ086 (ITK inhibitor). Currently, the core valuation anchor of Hua Jian Future lies in HJ787. This drug is the company's most recognizable asset at present and is the only topical selective TYK2 inhibitor in clinical stage in the country. The uniqueness of this drug lies in its safety advantage as a topical medication. Phase II clinical trials showed that in the treatment of mild to moderate atopic dermatitis in week 8, the highest dose group (3%, twice daily) had a response rate of 62.5% according to EASI-75 (skin lesion improvement by 75%), and the treatment-related adverse events were mild, without the common systemic side effects of JAK inhibitors, demonstrating a clear safety advantage. Due to the lack of approved topical TYK2 inhibitors in China, and current therapies such as topical steroids, PDE4 inhibitors, and oral JAK inhibitors have drawbacks such as significant side effects and limited long-term use, HJ787 is expected to fill the treatment gap in the existing market. In terms of market space, the market size of drugs for atopic dermatitis in China is expected to reach 12.1 billion yuan in 2024, with a projected increase to 22.1 billion yuan by 2028, with an annual compound growth rate of 16.2%. However, the current drawback of this drug is also apparent, as it is still in the research and development stage, and commercialization is slow. The prospectus shows that the Phase II clinical trial of the topical atopic dermatitis drug is expected to be completed by September 2026, with Phase III clinical trials starting in 2027, and it may not be approved for market until 2029 at the earliest. The mismatch between the commercialization timetable for core varieties and the overly rapid growth in valuation may be one of the main reasons for the significant fluctuations in Hua Jian Future's stock price based on its fundamentals. According to the prospectus, in July 2025, Hua Jian Future's post-Series C2 financing valuation was approximately 2.7 billion yuan, and its Hong Kong IPO was priced at 81.8 Hong Kong dollars, giving it a total market value of around 6.02 billion Hong Kong dollars after issuance, equivalent to about 5.39 billion yuan. In other words, the valuation of Hua Jian Future has increased by nearly 100% in less than a year. In addition, based on Hua Jian Future's revenue of 12.982 million yuan in 2025, the company's pre-IPO PS valuation has already exceeded 400 times, for a company that relies on a single II/III clinical heavyweight drug and has not yet realized commercialization and cash flow for an 18A company. The fundamentals alone may not be enough to support such a high valuation in the short term, and the price collapse caused by the temporary decline in valuation may be seen as a result of the market "voting with its feet."