Payoff rate of nearly 70%? Shenda’s “golden chick,” Shen Shu (7821), has opened public subscription—what should you watch for when stocks are allocated by lot drawing?

Recently, Taiwan’s stock capital market has seen a new wave of IPO listings, including a listing-heat story about a subsidiary incubated by Synnex Group: “Synsmart (7821)” will move from the over-the-counter (OTC) market to the main board, drawing market attention. If we estimate based on its offering price of 38.5 yuan and the latest closing price of 65.2 yuan, being allocated one share could yield a potential profit of up to 26k yuan, with a return rate of nearly 70%. Along with Innovative Services (7828), it is one of this week’s stock lottery picks with the widest price gap and the brightest return profile.

(Winning 680k on the spot? Innovative Services (7828), a semiconductor equipment company, opens for public subscription—what should you watch for when applying for stock lottery draws?)

Synsmart (7821), Synnex Group’s “small golden hen”

Synsmart (7821)’s core business focuses on two major areas: “smart in-vehicle telematics” and “smart IoT.” In vehicle applications, the company not only provides hardware such as dash cams, but also expands into end-to-end software and hardware integration services for fleet management, thereby improving gross margin and customer stickiness. At the same time, demand for industrial-grade POS machines remains stable amid the trend of corporate digital transformation. This dual-engine operating structure can effectively diversify risks from volatility in a single market, providing real support for steady revenue growth in recent years.

What is a stock lottery?

The official name of a stock lottery is “public subscription.” It is a mechanism through which companies issue new shares to the public in order to raise funds. When a company conducts an initial public offering (IPO) or a cash increase after being listed or OTC listed, regulations require that a certain proportion of shares be set aside for public subscription. Investors must submit applications through a broker’s trading platform and, on the designated debit date, ensure there is sufficient subscription funds and related processing fees in their settlement account. If the total number of subscribers exceeds the number of shares available for allocation, the Taiwan Stock Exchange will use computer-generated random draws to ensure the allocation mechanism is fair and transparent.

If we estimate based on its offering price of 38.5 yuan and the latest closing price of 63.8 yuan, being allocated one share could yield a potential profit of up to 26k yuan, with a return rate of nearly 70%. Along with Innovative Services (7828), it is one of this week’s stock lottery picks with the widest price gap and the brightest return profile.

Buy a lottery for 20 yuan? What risks are involved in stock lotteries?

For most investors, the core motivation for participating in a stock lottery lies in the potential spread between the “offering price” and the “market price.” To attract subscriptions, lead brokers typically provide a discount space at the offering price. However, participating in the subscription also means facing the cost of having funds frozen. On the debit date after the subscription deadline, the full amount is pre-debited and frozen for several trading days, until the refund date for unsuccessful applicants when funds are released.

In practical terms, investors also need to consider implied transaction costs. Each time you participate, you must pay a processing fee of 20 yuan in New Taiwan dollars and a postage fee of 50 yuan for mailing the notice of winning. If you do not win, your subscription funds are refunded along with the 50 yuan postage; in other words, the 20 yuan is a sunk cost.

Since Synsmart (7821) offers only 2,625 shares for public subscription, the estimated allocation rate is less than 1%. You must deposit 38,570 in advance into your securities account. Even after winning, you would have to wait until after the share payout date on 4/20 before you can sell the shares, during which there is some price risk. Moreover, because Synsmart (7821) is moving from the OTC market to the main board, the reference price is based on an OTC price with relatively low liquidity and greater likelihood of price deviation. Whether the price can hold up to the same high level once listed is a key test. Before applying for the lottery, investors must make sure the price gap is sufficient.

The process is simple: by no later than 2:00 p.m. on 4/10, open your securities APP, click on stock lottery subscription, and deposit 38,570. The results will be announced on 4/14.

This article Reporting a return rate of nearly 70%? Synnex’s “small golden hen,” Synsmart (7821), opens for public subscription—what should you watch for when applying for stock lottery draws? first appeared on Lian News ABMedia.