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  • 1 Post By Fatelvis
  • 1 Post By PDLM
  • 1 Post By vinyljunky

How do IPOs such as Prada work for me as investor (in HK)?

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  1. #1

    Join Date
    Apr 2008
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    2,879

    How do IPOs such as Prada work for me as investor (in HK)?

    I've been buying and selling stocks here and there and received a couple of dividends, but I've got no idea how I'd get hold of ie. Prada stocks before they are traded on the market. What are the standard procedures with new listings?

    Do I need to speak to my banker to place an order?
    Where to get official info? The HKEX website doesn't return anything with "prada" at this moment.

    I am not into Prada bags or luxury goods, I just use this as an example as this is the one happening right now. I might buy a few shares if I figure out how to... but it depends.

    They are talking about price ranges, filings, and even a stock code (1913) in the following article. No idea where this info is from.

    FT.com / Retail & Consumer - Prada looks to raise up to $3.1bn in HK listing

    If anyone has experience with past IPO's it would be nice if you could shed some light on it.

    Thanks!


  2. #2

    Join Date
    Jan 2011
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    Hi, you can apply for upcoming IPO shares through the bank. With HSBC this is the case anyway. You probably won't get the full amount you requested as something like Prada will no doubt be oversubscribed.

    100LL likes this.

  3. #3

    Join Date
    Jun 2005
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    In fact you will probably get a tiny proportion of what you asked for. But when you apply you need to include the funds needed for whatever you applied for. So this means that you generally need to take out margin financing, which all just a big scam to make more money for the banks.

    100LL likes this.

  4. #4

    Join Date
    Feb 2010
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    I really think their branding is terrible but if you can buy a bag for 30% off than the main stores then why not.

    Their financials look OK but not sure but not sure of comparison to other fashion retailers and there is little information except some over zealous reporters beating up an amazing story. But in saying that it might be worth the initial investment to get an allocation but then take profits quickly.

    I am sure there are others that have a better educated opinion than mine.


  5. #5

    Join Date
    Oct 2006
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    Quote Originally Posted by PDLM:
    In fact you will probably get a tiny proportion of what you asked for. But when you apply you need to include the funds needed for whatever you applied for. So this means that you generally need to take out margin financing, which all just a big scam to make more money for the banks.
    Quite true... Often you need to request for at least a million dollars worth of shares and you often end up with 10 or 20K but if you don't have the million to cover it then you pay charges. You also run the risk of getting more than you bargained for if it doesn't subscribe as much as expected. I have a friend who ended up with 200K worth of AIA which was more than expected however it turned out OK since it's gone up quite a bit so far.

  6. #6

    Join Date
    Dec 2010
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    I don't think Milan Station is going to do well, simply because their margins are going to get squeezed with overheads going up (mainly rent). They are planning to expand their operations in China, but in my view the Chinese market is all about prestige. Half the reason people buy LV & Prada is for the experience of walking into the store. Milan Station can't recreate that prestige selling second-hand bags.

    There's also the question of inventory. Milan Station pays cash for the bags they buy, they need to ensure a fast turnover of inventory for sufficient cash flows. That's something that other retailers don't have to worry about as much, because they buy on credit.

    If you had bought at the IPO and exited at the peak (2.77), that would have been a tidy profit of 65%. I don't see the stock moving north anytime soon, it's definitely not a value buy IMHO.

    virago likes this.

  7. #7

    Join Date
    Feb 2010
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    Oh, they are second hand bags! I didn't realise that. I really buy bags so didn't know!

    If that's the case forget China. It will never take off.