The initial public offering market is back, and its centre of gravity is China. The enthusiasm for mainland-related IPOs is such that people are reaching for comparisons to the 1997 'red chip' frenzy and the 2000 dotcom stock mania that peaked in Hong Kong with the much-hyped, retail-investor-friendly tom.com offering. The newest darling on the IPO scene is mainland insurer China Life, which began inviting retail investor applications yesterday. Enough forms have been printed for one out of every three Hong Kong residents. This offering has already received an enthusiastic response from institutional investors, many of whom see China Life and similar consumer-oriented stocks as a way to profit from continuing economic growth in China. Hong Kong's retail investors, however, are driven by a different desire. Many of those lining up for forms and prospectuses make no bones about the speculative nature of their interest. They have seen the recent momentum behind China-related shares, they know the IPO is backed by some of Hong Kong's richest tycoons, and they have added it all up to reach the understanding that only a fool would miss out on such a sure bet. Hence, the scenes being splashed across televisions yesterday of long lines snaking around buildings where applications were being issued. If anything, the keen interest in China Life's offering is an indication of an appetite for risk not seen since the end of 1999 and early 2000, in Hong Kong and around the world. Chinese companies in search of capital - and their underwriters - have no intention of letting the opportunity slip by, so it would be reasonable to expect some frenzied activity on the IPO front well into the first quarter of next year. Also making their debut this month in Hong Kong are Great Wall Automotive, Fujian Zijin Mining Industry and Chia Hsin Cement. The four are expected to raise US$3.44 billion in total; others are already queueing up, including several regional banks and SMIC, China's largest maker of microchips. There are some salient differences between the current IPO mania and those of previous years. China Life, for instance, commands 45 per cent of the mainland insurance business and expects to see a rise in profits this year. Tom.com's listing cohorts, however, included many 'vapourware' companies, full of promise but lacking management expertise or useful technologies. Many of them had slim chances of ever making a profit and have since folded. Tom.com, still a going concern but now more of a traditional media company, could itself serve as a cautionary tale. It has fulfilled nowhere near the potential once ascribed to it, and now trades at closer to its offering price than to the levels it shot up to on its first day. China Life is clearly a different story. Yet it will nonetheless be interesting to see just how high its share price is pushed on its debut and how quickly it will take to find a stable valuation. The same goes for the other mainland plays that come in its wake. If interest in these stocks is driven more by short-term liquidity than by fundamentals, there could be some painful experiences ahead for those who are unable to know when it is the right time to get out. It should be hoped that the lessons of recent years were learned well, especially by retail investors who were commonly left holding the bag after sudden, swift rallies ran out of steam. In many cases, issues were suspected of having been deliberately underpriced so that their shares would spike once trading began, allowing key insiders to cash in quickly. This time around, discretion on first trading days might well be the better part of valour. And a deeper think about price-earnings ratios wouldn't hurt anyone.