Hanmi Testing System (Han Ce, 7856) is scheduled to list on Taiwan’s OTC market in late September. On the first day of its public subscription, the deal drew more than 140,000 applications and froze TWD 322.3 billion in capital, setting a new record in Taiwan’s stock market.
The public underwriting price was set at TWD 2,250. Against the company’s recent Emerging Stock Board trading price of about TWD 5,200, the potential paper spread per board lot was close to TWD 3 million. The company had already completed its institutional auction process before the retail subscription opened, and the weighted average winning bid in that auction came in at TWD 4,272.7.
The report said that while the regulatory framework allows retail investors to subscribe at a lower price, past IPOs with wide pricing gaps have also seen shares fall below their underwriting price. It said investors should still weigh capital costs and liquidity risk before joining the subscription.
Auction results showed institutions paying above TWD 4,100
Before the public subscription frenzy, Hanmi Testing System completed an auction aimed mainly at institutional investors earlier this week. Qualified bids totaled 18,232 lots, locking in TWD 41 billion in market funds ahead of time.
According to the auction results released by the Taiwan Stock Exchange, the key figures were as follows:
| Item | Price / Data | Note |
|---|---|---|
| Latest Emerging Stock price | About TWD 5,200 | Recent market trading level |
| Highest winning institutional bid | TWD 4,568.10 | Cost paid by the top bidder |
| Weighted average winning price | TWD 4,272.70 | Average institutional holding cost |
| Lowest winning price | TWD 4,138.00 | Effective clearing floor for successful bids |
| CTBC Bank winning price | TWD 4,174.13 | 23 lots bought with proprietary funds as a financial investment |
| Regulatory auction floor price | TWD 1,800.00 | Starting benchmark set by the underwriter |
| Public subscription price | TWD 2,250.00 | Retail lottery subscription price |
The lowest successful bid was TWD 4,138, while the weighted average winning price reached TWD 4,272.7.
The article cited CTBC Bank as an example. The bank previously disclosed that it bought 23 lots at TWD 4,174.13 per share, for a total transaction amount of TWD 96 million. Its bid was based on a price fairness opinion issued by Bosong CPAs and its internal valuation model.
In the report’s framing, institutional investors did not treat TWD 1,800 as a meaningful market price but as the legal starting point for the auction. The level that actually mattered was TWD 4,138, the lowest winning price formed by real supply and demand. With Hanmi Testing System trading above TWD 5,200 on the Emerging Stock market, bids at TWD 2,000 or TWD 3,000 would not have won any shares. A winning price around TWD 4,174 still left nearly a 20% buffer, or about TWD 1,000 per share, against the TWD 5,200 market price, according to the article.
Why retail investors can still subscribe at TWD 2,250
The gap between the institutional auction average of TWD 4,272.7 and the retail subscription price of TWD 2,250 comes from Taiwan’s IPO pricing rules.
The report said regulations stipulate that, in principle, a public subscription underwriting price cannot exceed 1.15 times the auction floor price in an initial listing process. Since Hanmi Testing System’s auction floor was set at TWD 1,800, the public subscription price remained capped at TWD 2,250 even as institutional bids climbed above TWD 4,200.
That rule is what created the widely discussed institutional-versus-retail price gap of nearly TWD 3 million per board lot.
Strong fundamentals, but risks remain
On fundamentals, the report said Hanmi Testing System is benefiting from business tied to TSMC, advanced packaging including CoWoS, and silicon photonics testing. Revenue for the first seven months of the year reached TWD 2.668 billion, up 128.18% year over year, while earnings per share in the first half stood at TWD 21.5.
The article also listed several risks that investors should watch:
- Liquidity in the Emerging Stock market: The Emerging Stock trading mechanism does not include the same stabilizing features available in listed markets, such as short-selling restrictions below the reference price and daily price movement limits. Between the subscription date and the formal listing in late September, sharp moves in the broader market or in major semiconductor names could push the Emerging Stock price lower and narrow the expected spread.
- Opportunity cost of capital: Each subscription freezes TWD 2.25 million. For retail investors, that is a large amount of money to lock up for several trading days, especially with an expected low winning rate, and it comes with funding and interest costs.
- Selling pressure on the first trading day: A total of 4,192 lots were released through the auction. Even with the weighted average winning price at TWD 4,272.7, the stock could still face short-term volatility if first-day demand is not strong enough and both auction winners and retail allottees move to take profits at the same time.
With the highest underwriting price on record and more than TWD 320 billion in one-day frozen subscription funds, Hanmi Testing System has set a new mark in Taiwan’s capital market. The report ended with a caution that investors should judge the deal through valuation and market volatility rather than treating the policy-driven paper spread as guaranteed profit.