School of Business and Management Department of Finance 206 Hong Kong IPO Market Supervisor: ZHANG Chu / FINA Student: LUANG Sin Kei / FINA Course: UROP1100, Fall Whether Hong Kong initial public offering firms (IPOs) outperform their peers remains a puzzle. In general, the 605 Hong Kong IPOs listed during 2014-2019 slightly outperform their matching firms in the 1-3 year holding period from the closing price on their IPO date to their 1 year, 2 year, and 3 year anniversaries. There is almost no bias with ±0.01 towards IPO return for the one year holding period. This bias increases over time and there is a large increase in (mean) return between holding for 1-year and 2-year, then a moderate increase between 2-year and 3-year. The null hypothesis of the paper is that firms with higher EPS have greater long term holding period return (2-3 years). Hong Kong IPO Market Supervisor: ZHANG Chu / FINA Student: MU Di / ECOF Course: UROP1100, Fall As used in many asset pricing models, firm size is considered as a determinant of expected stock return. However, there isn’t much preliminary research done using the data of the Hong Kong Stock Exchange. We collected data of 247 firms that had their initial public offering issued from 2014-2016. Then we computed their return in 1-month, 3-month, 3-year respectively and took the difference between those and the corresponding market/industry return. We found evidence of the size effect of larger companies are associated with smaller returns using both benchmark portfolios. The results are consistent in all three time periods. Hong Kong IPO Market Supervisor: ZHANG Chu / FINA Student: SHEN Yue / IS Course: UROP1100, Fall The research focuses on the Hong Kong initial public offerings listed between 2016 to 2019. Through the statics analysis of the excess return of the Hong Kong IPO, it shows that the underpricing phenomenon is common in the short term. Through the utilization of the ordinary least square model, the EPS is positively correlated with the excess return of the Hong Kong IPO.
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