Asrock Industrial (7710), a Pegatron Group affiliate focused on industrial computers and edge computing solutions, will open its pre-listing public share subscription from Oct. 14 to Oct. 16. Using the tentative underwriting price of NT$138 and a recent emerging-market price of about NT$200 cited in the source article, one board lot would imply a potential gain of more than NT$60,000, or about a 45% return, if that price gap holds.
What Asrock Industrial does
Asrock Industrial was established in 2018. The company was originally spun out from the industrial computer division of motherboard maker ASRock and operates within the Pegatron Group. Its core business centers on industrial PCs, embedded computing systems, and edge AIoT hardware solutions.
Its main product lines include industrial-grade motherboards, rugged fanless embedded systems known as Edge AI Box PCs, and industrial automation controllers. The source article says these products are used in smart manufacturing, production-line machine vision (AOI), smart retail, gaming machines, and smart transportation. After trading on Taiwan’s emerging stock market, the company received approval from the Taiwan Stock Exchange and has formally started its pre-listing cash capital increase and public underwriting process.
How the stock lottery works
In Taiwan, the so-called stock lottery is formally known as a public subscription. It is the mechanism through which a company issues new shares to the public in order to raise funds. When a company is conducting an initial public offering or a post-listing cash capital increase, a certain portion of shares must be allocated for public subscription under the rules described in the article.
Investors submit applications through their brokerage trading platform and must make sure there is enough money in the settlement account on the designated deduction date to cover the subscription payment and related fees. If the number of applicants exceeds the number of shares available, the Taiwan Stock Exchange uses a computerized random drawing system to determine allocation.
Costs and risks investors need to weigh
According to the article, most investors join these subscriptions because of the possible spread between the underwriting price and the market price. Lead underwriters usually leave some discount room in the offering price to attract demand. Even so, applicants face a capital lock-up cost. After the subscription deadline, the full payment is deducted in advance and frozen for several trading days until refunds are issued to those who do not win.
There are also direct transaction costs. Each application requires a NT$20 processing fee and a NT$50 mailing fee for the winning notice. If an investor does not win the draw, the share payment and the NT$50 postage fee are refunded, leaving NT$20 as the sunk cost.
The article also notes that Asrock Industrial is moving from the emerging stock market to a formal listing. Its current reference price comes from a market with relatively low liquidity and sharper price swings. Because there is still a time gap between subscription, drawing, and formal share allocation for listing-day trading, there is no certainty that the stock will remain at the current reference level once it officially lists.
Details of this share sale
The source says existing shareholders of Asrock Industrial have waived their priority rights to subscribe for the new shares in line with regulations and a shareholder meeting resolution, with all shares entrusted to securities underwriters for the pre-listing public underwriting process.
A total of 6,114 lots will be issued in this cash capital increase. Of that amount, 10%, or 612 lots, is reserved for employee subscription. The remaining 90%, or 5,502 lots, will be handled through a combination of auction bidding and public subscription. The bidding period runs from Oct. 8 to Oct. 13, followed by the public subscription window.
How to participate
The subscription window runs from Oct. 14 through Oct. 16. Investors can submit an application through the stock lottery section of their brokerage app before 1:30 p.m. to 2:00 p.m. during that period, according to the article. They must place NT$138,070 in the settlement account before the deduction date on Oct. 19. The drawing result will be announced on Oct. 20.