(Bloomberg) — Six months’ salary in a single day. That’s the kind of payoff China’s boom in initial public offerings is handing to a lucky few.
Seven new listings this year have generated profits of more than 100,000 yuan ($14,900) for retail investors who secured an allocation of 500 shares and sold on debut day, the most such windfalls in at least six years. Stacy Wei did even better: her winning bid for Unitree Robotics earned her about 380,000 yuan, enough to upgrade to her dream car.
Wei, who works in education in one of China’s biggest cities, beat odds of one in 5,525 to secure shares in the Unitree Robotics deal last month. She sold as the stock soared on its first day, pocketing enough to walk away from a deposit she had already paid on a cheaper car.
Chinese traders have a name for IPOs like Unitree: “big fat tickets,” referring to listings that can deliver more than 100,000 yuan from a single winning allocation. This year has produced an unusually large crop of them, fueling a rush for new shares even as soaring demand makes allocations increasingly difficult to secure.
For China’s roughly 250 million retail investors, winning an IPO allocation has long offered an unusually reliable route to quick profits. But 2026 is shaping up as an exceptional year. Enthusiasm for technology listings championed by Beijing has sent first-day returns to one of the highest on record: the 53 stocks that started trading in Shanghai and Shenzhen this year surged more than 350% on average on debut, weighted by deal size, according to data compiled by Bloomberg.
“Who would pass up on free cash?,” said Alice Wang, who won shares in the IPO of CXMT Corp. and is regularly bidding for new listings. “I’m not too worried about the performance after the first day, and I prefer companies in hard tech or in bio tech, as the chances of falling below the IPO price tends to be smaller.”
For small investors, winning the IPO sweepstakes is the surest way to make money on the world’s second-largest stock market, where picking shares is a far trickier proposition. The CSI 300 Index is flat this year, and traders who chased the AI hardware rally got caught out by a sharp downturn. Even before the volatility kicked in during the summer, gains had been concentrated in a narrow group of AI darlings, leaving little momentum elsewhere.
“Big fat tickets” also play an increasingly outsize role in the broader economy as China’s traditional avenues for wealth accumulation get clogged up. Home prices are still sinking years into a property slump, while repeated cuts to deposit rates have pushed savings yields to record lows, leaving investors with fewer compelling options.
The economic backdrop has only enhanced the appeal of new listings. Companies debuting on Shenzhen’s ChiNext and Shanghai’s Star board have dominated the ranks of the most lucrative IPOs in recent years. All of this year’s “fat tickets” came from industries Beijing considers strategically important, including semiconductors, robotics and advanced manufacturing.
This year’s frenzy stands apart from previous IPO rushes in China, such as in the 1990s when the economy started opening up and a new generation of investors emerged. As depicted in Wong Kar-wai’s hugely popular series Blossoms Shanghai, that first wave was characterized by news spreading by word of mouth and huge crowds descending on brokerage offices to secure subscriptions.
Now, the flow of information is closely regulated and standardized, while subscribing to an IPO requires little more than a few taps on an app — and there’s no a monetary obligation until the shares are actually awarded.
In that environment, a lot of retail investors see the IPO lottery as basically free cash. But that’s also fueling concern among money managers that the first-day pops are a symptom of speculative excess. The initial gains are driven less by fundamentals than by investors’ willingness to pay ever-higher prices, and offer some insight on the market’s appetite for risk, according to Dong Baozhen, partner at Lingtongshengtai Asset Management.
“A 10,000-yuan lottery win carries odds of roughly one in 110,000, but with Unitree, investors had a much better chance of landing a windfall multiple times that,” said Dong. “Both are essentially luck-based income, but when the easier bet pays far more than the lottery, that’s a sign a market has lost all sense of proportion.”
To be sure, a lot of the IPO allocation winners are also investors who have struggled elsewhere. Wei said her gains on Unitree barely balanced out some property losses and plans to put whatever she didn’t use to buy the car into safer wealth management products.
The outsize IPO pops also carry a risk in and of themselves, according to Morgan Stanley analysts including Chiyao Huang. While policy support and scarcity can help justify the premium valuations for new listings, they can also amplify the disappointment when companies fail to meet lofty expectations, Huang said.
The listings on the Star board this year are increasingly bets on the future. Only 46% were profitable at scale, down from 72% in 2022 peak in the number of listings, according to Morgan Stanley. The median return-on-equity for these new offerings was about 10 percentage points lower, suggesting many of the newcomers are earlier in their business cycle despite commanding rich valuations.
More such deals are on the horizon in industries central to policymakers’ objectives. China’s flash memory champion Yangtze Memory Technologies Co. is progressing forward with what will be another multibillion-dollar IPO, while others like LandSpace Technology Co. and Deep Robotics — formally known as Hangzhou Yunshenchu Technology Co. — are moving through the pipeline.
That could quickly divert investor attention from recently listed stocks, adding another risk to their performance. Though for now, it remains largely theoretical to the lucky retail investors. But even lottery winners are not all celebrating, when the IPO boom makes a market run low on momentum.
Wu Haiyan pocketed a windfall after receiving five lots each in CXMT’s near-record IPO and Tianjin Fuji-Ta Bicycle Industrial Co.’s listing this summer, his first stroke of luck in a year. Still, the payout brought little satisfaction, serving more as a cushion against losses elsewhere than a life-changing windfall.
Wu, who works at a technology firm in Beijing, said he used the proceeds to buy the dip as tech stocks were in free fall in July.
“You make money in one part of the market and lose it in another,” Wu said. “In the end, not a penny makes it home.”
–With assistance from Tao Zhang.
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