Summary of Key Points
After the initial public offering (IPO) of Yushu Technology, both public and private funds made substantial profits through the offline placement process (a dedicated channel for institutional new share subscriptions): The total unrealized profit amounted to 10.146 billion yuan, with public funds accounting for the majority (8.378 billion yuan), and private funds earning 1.768 billion yuan as well. Leading institutions such as E Fund and Century Frontier Private Equity emerged as the biggest winners due to their large number of products and larger allocation shares.
I. How much did public and private funds earn from new share subscriptions? – Over ten billion in total, with public funds accounting for 80%
The stock price on Yushu Technology's first day of trading performed exceptionally well, enabling the institutions participating in the offline placement to profit effortlessly:
- Total unrealized profit: 10.146 billion yuan (unrealized profit refers to the potential gain on paper; the profits have not been realized yet, but based on the opening day price, these amounts have already been earned).
- Public funds: 5,117 products from 95 institutions participated, with an allocation amount of 1.82 billion yuan and an unrealized profit of 8.378 billion yuan (82% of the total profit).
- Private funds: 2,833 products from 134 institutions participated, with an allocation amount of 0.384 billion yuan and an unrealized profit of 1.768 billion yuan.
Why did public funds earn more? Because they had a larger number of products (5,117 vs 2,833) and thus were allocated a greater number of shares (12.06 million vs 2.54 million), essentially meaning they had a bigger “pie” to share from the profits.
II. Private fund winners: Quantitative institutions lead the way, with some earning over 100 million yuan
The four private funds that earned the most were Century Frontier (156 million yuan), JiuKun Investment (146 million yuan), Ningbo HuanFang (135 million yuan), and YanFu Investment (133 million yuan).
Why are quantitative institutions more successful? They use computer models to participate in new share subscriptions on a large scale; they may have hundreds of products participating simultaneously, allowing them to secure larger allocation shares. For example, HuanFang Quantitative has many products, and although the allocation per product is small, the total amount adds up significantly.
Additionally, 28 other private funds achieved unrealized profits of over ten million yuan: 18 funds earned between 10 million and 49.99 million yuan, 6 funds earned between 50 million and 99.99 million yuan, and 4 funds earned over 100 million yuan – which is equivalent to the annual net profit of many small and medium-sized enterprises.
III. Public fund winners: Leading fund companies dominate, with E Fund earning 1.1 billion yuan
The top-performing public fund was E Fund (1.188 billion yuan), followed by Southern Fund (999 million yuan), ICBC Credit Suisse (874 million yuan), and Huaxia Fund (504 million yuan). These are industry giants with a large number of products and substantial assets, enabling them to secure larger shares of the new issuance.
For instance, E Fund had thousands of its products participating in the subscription process. Even if each product received only a small portion of the shares allocated, the total profit still amounted to 1.1 billion yuan – this is more than the annual management fees of many smaller fund companies. Another 58 public funds also achieved unrealized profits of over ten million yuan, indicating that most participating institutions benefited.
IV. Can ordinary investors get a share of the action? – Indirect participation is more feasible
Offline new share subscriptions are an exclusive benefit for institutions (with high entry barriers; for example, private funds require a certain asset size, and public funds themselves are typically institutional entities). Ordinary retail investors cannot participate directly. However, there are two ways to indirectly benefit from new share subscription profits:
1. Invest in public funds: The profits from new share subscriptions by public funds are included in the fund’s net value. By purchasing these funds, investors can share in the gains (many of E Fund’s products participated in this subscription, and holders of these funds will benefit accordingly).
2. Online new share subscriptions: Retail investors can subscribe for new shares through their stock accounts, but the odds of winning a subscription are very low (e.g., one in ten thousand). Only with good luck can they successfully subscribe.
In summary, for ordinary investors looking to profit from new share offerings, investing in public funds is a more reliable approach.
V. Why can offline new share subscriptions be so profitable? – The “must-rise” logic of initial public offerings
New stocks usually increase in price on their first day of trading (for example, Yushu Technology’s stock price may have increased several times). Institutions can purchase shares at the lower issue price through the offline placement process and then sell them at a higher market price, resulting in a large profit margin. It’s like buying goods at a wholesale price and selling them at a retail price.
It’s important to note that not all new stocks will generate such high profits; if the stock price falls below the issue price after the IPO, institutions could lose money. However, in this case, Yushu Technology was clearly a “lucrative opportunity,” resulting in substantial gains for all participating institutions.
In conclusion, Yushu Technology’s new share subscription process was a collective boon for institutions, with leading firms benefiting significantly due to their scale. Ordinary investors can also participate indirectly through public funds. However, new share subscriptions are not always a surefire profit-making strategy, and it’s essential to approach them with a rational perspective.