Guotai Junan Securities has received a relatively cautious response from retail investors for its HKD16.47 billion initial public offering (IPO), the biggest one in Hong Kong this year. “The IPO came at a challenging time for the brokerage industry,” said Linus Yip, Chief Strategist for First Shanghai Securities. “After the stock market turbulence from 2015 to 2016, the industry is still recovering.” Guotai Junan Securities, China’s third largest broker by assets, is looking to raise HKD16.47 billion through the sale of 1.04 billion shares. 5% of the shares are for public offering in Hong Kong, while the rest are in the international placing tranche, largely targeting institutional investors. Shares are scheduled to begin trading on April 11. The retail tranche received bids for two times the number of shares on offer, according to Infocast. The international placing tranche has been oversubscribed by more than three times. “Retail investors are reluctant to bet big on brokerage firms which are not doing quite well in the current market environment,” said Kenny Tang, Chief Executive for Jun Yang Securities. After the stock market turmoil, China’s securities industry has seen a sharp drop in profitability in 2016. Total net profits for the country’s 129 securities firms decreased 50% to CNY123 billion in 2016, according to the Securities Association of China. Guotai Junan Securities’ revenues fell 31% in 2016 to CNY25.8 billion while its net profit declined 37% to CNY9.8 billion, the South China Morning Post reports.