With China Gaoxian (I4U.SG) down 20.5% at $0.350 after its KDR (950070.SE) opened lower on its debut in Korea this morning, falling to a low of KRW5,360 (equivalent to $0.307 per share), CIMB warns investors “make your investments based on company’s fundamentals; do not chase dual-listing themes blindly.” 

It says current investors in China Gaoxian could take advantage of this opportunity to buy its KDR and sell SGX shares (in equivalent amount) to make the spread (+12% before transaction costs). 

CIMB adds, “traders playing the dual listing theme will be better off taking profits on announcement of dual listing offer price,” noting China Gaoxian’s shares fell 5.6% (to $0.42) on the next trading day after it announced its KDR pricing at $0.405 per share (a discount to its last transacted price on the SGX of $0.445) after it had rallied +134% from $0.19 (last closing price before the KDR plans were revealed) to $0.445 (just before KDR pricing announced).