How is first-day return calculated?

First-day return usually measures the first listing day's close relative to the final offer price.

Plain meaning

If the final offer price is HK$10 and the first-day close is HK$12, the first-day return is 20%. Page display generally uses this close-to-offer figure. Backtests also check whether the intraday path is clear, so a late bounce or fade from highs is not treated as a full-day trend.

Why it matters

It is an important outcome variable for backtesting IPO signals, but it is affected by market conditions, liquidity, grey market sentiment and stabilization.

How to read it

Read it with grey market return, turnover, liquidity, final offer price and fundamentals. First-day strength does not equal a long-term trend. Hit rate and average return on the backtest page should be read with trend confirmation.

How it appears here

The backtest page separates grey market and first-day targets, and marks deviation types so close-only moves are not mixed with clearer trends.

Common mistakes

Treating first-day return as a long-term investment conclusion.
Ignoring transaction cost, financing cost and actual allocated lots.
Using grey market price or a late bounce as a direct substitute for the full first-day result.