Sipni (02583): Is there “entry” system arbitrage or value discovery behind the 5-fold increase?

In the recent Hong Kong stock IPO feast, Sipni (02583) can attract a lot of attention. Since it landed on the Hong Kong Stock Exchange at the end of September, this brand, which focuses on gold watches, has quickly become the focus of the market: it soared 258% on the first day of listing and 71% the next day. The cumulative increase is close to 480%, and the market capitalization has surpassed HK$10 billion in one fell swoop. It can be called the brightest “star new stock” in the Hong Kong stock IPO market in 2025.

Some analysts pointed out that this round of Sipney's rise was not mainly driven by changes in fundamentals, but was highly related to expectations included in the Hong Kong Stock Connect. Its IPO structure, liquidity characteristics, and market capitalization trends are similar to the path of some small-cap stocks seeking rapid integration into the interconnection mechanism in the early stages of listing in recent years.

The circulation market is concentrated, and the turnover rate continues to be low

The market performance of Sipni after listing is greatly related to its distribution structure.

According to its prospectus, the total number of shares offered by the company worldwide is only 10.6 million shares, of which the portion reserved for retail public subscription (Hong Kong offering) accounts for only 10%, or 1.06 million shares. This means that at the moment of listing, more than 90% of the chips were locked in the hands of “main players” such as cornerstone investors and major international distributors. Faced with 2505.9 times oversubscribed by retail investors, 1.06 million shares in this area were instantly overwhelmed. It can be said that there were very few chips that could be circulated on the first day of listing.

This extreme “supply return to the edge” structure has created a perfect trading environment for the main players. Instead of taking money for a long time like in traditional stocks, they can use a relatively small amount of capital on the first day of listing to easily leverage prices and achieve a “violent increase.” As a result, its stock price skyrocketed during the first two trading days, but the volume plummeted from 2.82 million shares on the first day to 620,000 shares on the third day, showing a classic “volume-price divergence.”

The Zhitong Finance App is also concerned that the company's current turnover rate is hovering around 0.1%. It is more certain that the “crazy” at the beginning of the listing was not a rise driven by market consensus, but rather a “frictionless increase” under the height of the chips. Through a small amount of funds, it can create the illusion of a strong rise in stock prices, thereby attracting the market to follow suit.

Market capitalization management points to the Hong Kong Stock Connect review window

The reason why Sipney's market performance has received special attention is inseparable from the market's expectations that it may enter the Hong Kong Stock Connect list.

According to the Zhitong Finance App, Hong Kong Stock Connect adjustments are divided into regular adjustments and temporary adjustments. The regular adjustments follow the Hang Seng Composite Index. They are carried out every six months, at the end of June and the end of December each year, and take effect in September and March of each year. The temporary adjustments are irregular adjustments, and targets that do not meet the conditions are transferred in and out. IPOs need to enter the Hong Kong Stock Connect. Generally, they are included in the Hong Kong Stock Connect through regular annual adjustments. Entering the Hong Kong Stock Connect can receive mainland capital attention, greatly increasing the trading volume. According to the rules, if a company is to be included in the Hong Kong Stock Connect, its average daily market value of Hong Kong stocks during a certain review period must cross the threshold of about HK$9.4 billion.

According to Wind calculations, the average daily market value of Sipni as of December 15 was HK$9.848 billion, which is just above the current “entry threshold”, and the monthly stock liquidity is also fully up to standard.

Interestingly, on December 16, its market capitalization fell below HK$9.3 billion, then the stock price rebounded and continued to hover around 9.4 billion yuan — showing a clear intention to “stabilize market value”.

The Zhitong Finance App noticed that the main net buying brokers of the day were Yingli Securities and ABD Securities, which recorded net purchases of about 0.19 million and 0.18 million shares, respectively. These two brokerage firms are smaller and their trading behavior is more flexible. Meanwhile, net sellers include market-renowned institutions such as Goldman Sachs and Huasheng.

This brokerage transaction structure reflects the characteristics of “stable” operations to a certain extent: large investment banks with high market reputation and diverse businesses pay more attention to their global position strategies and market reputation, and are relatively restrained in operation; while smaller brokerage firms or traders are more likely to become channels for executing specific short-term transactions.

More importantly, the Hong Kong Stock Connect rules do not limit the length of listing for IPOs. As long as the market capitalization and liquidity thresholds are met during the review period, “listing in this quarter and entering next quarter” can be achieved. This has also led to the “quick access” path being repeated in many IPOs in recent years, showing highly similar characteristics. On the one hand, the company has yet to pass the full quarterly performance verification, and lacks coverage of institutional holdings and seller research reports. Market capitalization and liquidity do not stem from long-term business accumulation, but are driven by short-term capital; on the other hand, the stock prices of relevant individual stocks are often seriously deviated from fundamentals.

In this context, once some individual stocks were successfully introduced, the speculative funds that had been ambush in the early stages quickly paid off and left the market. Coupled with subsequent performance falling short of expectations or the release of negative information, stock prices generally experienced a cliff-style drop of 30% to 90%. In the end, retail investors and southbound capital that took over became the main losers, revealing obvious flaws in the current Hong Kong Stock Connect integration mechanism in terms of prudence and risk prevention.

Business size is growing, but customer concentration is high

Looking at the company's business level, Sipney is one of the major domestic gold watch brands. The company mainly earns revenue through the sale of precious metal watches designed and manufactured under its flagship brand “HIPINE (HIPINE)”. According to Insight Consulting data, in 2024, based on GMV (total commodity transaction value), Sipney is the largest gold watch brand in China, with a market share of 27.08%.

In fact, Sipney's capital path has not been easy. Since 2016, Sipney has experienced two listings and two delistings on the New Third Board, then switched its target to the Hong Kong Stock Exchange. Only then did it successfully list on the Hong Kong Stock Exchange twice before finally being successfully listed on the Hong Kong Stock Exchange on September 30 this year.

Sipney's performance continues to fluctuate, although it has taken a “leading position” on the domestic precious metal watch circuit.

According to the prospectus data, from 2022 to 2024, the company achieved revenue of 324 million yuan, 445 million yuan and 457 million yuan respectively, increasing year by year, but the revenue growth rate slowed significantly in 2024. In the same period, the company achieved net profit of 245.41 million yuan, 52.099 million yuan, and 493.48 million yuan respectively. The performance also showed fluctuating trends.

Thankfully, however, this trend has changed since 2025. In the first five months of 2025, the company's revenue increased 21.6% year on year to 231 million yuan, and its net profit also reached 42.8 million yuan, which has recovered to 86.7% for the full year of 2024. Even so, it still lacks solid support for the current market value of over HK$10 billion.

At the same time, the company's development level is also facing some real challenges.

First, competition in the industry is under pressure from within and outside. Although the company ranks first in the domestic gold watch market with a sales share of 24.98%, in the concentrated market where the top five brands together account for 37.48% of the market, it still needs to catch up with the brands behind it. At the same time, the company needs to compete with international luxury brands in the high-end market and compete with traditional domestic brands and smartwatch giants such as Huawei and Xiaomi for share in the mainstream market.

Second, the concentration of customers is too high, and there is a significant “addiction”. From 2022 to 2024, the company's sales revenue to the top five customers continued to account for more than 87%, with the highest revenue from a single major customer accounting for more than 35%. This structure weakens the company's bargaining power, makes its performance highly dependent on the operating conditions of a small number of customers, and amplifies the risk of operating volatility.

In summary, Sipney's case reflects market capital's concern for IPOs, especially those with specific themes and institutional opportunities. Its market performance is the result of a combination of factors, including but not limited to industry attention, the company's own business positioning, equity liquidity in the early stages of listing, and potential financial expectations brought about by the interconnection mechanism.

For investors, in the face of such targets, which have both high attention and high volatility, decisions need to be more careful. While focusing on market hot spots and institutional opportunities, it is important to thoroughly analyze the company's long-term competitiveness, financial sustainability, and core business risks.