Robin Zeng, founder and chairman of Up to date Amperex Expertise Co. Ltd. (CATL), third proper, strikes a gong as Paul Chan, Hong Kong’s monetary secretary, second proper, and Bonnie Chan, chief government officer of Hong Kong Exchanges & Clearing Ltd. (HKEX), proper, applaud in the course of the CATL itemizing ceremony on the Hong Kong Inventory Trade in Hong Kong, China, on Tuesday, Could 20, 2025.
Paul Yeung | Bloomberg | Getty Pictures
Traders and companies’ enthusiasm for Hong Kong’s fairness capital markets is roaring again, as Chinese language firms flocked to the town for fundraising, sparking a frenzy out there that had been forsaken in recent times.
Outsized offers and a state-backed push for firms listed within the mainland exchanges to hunt a list in Hong Kong have thrust capital-raising quantity to the strongest first half-year since 2021, based on information from information supplier Dealogic.
New itemizing volumes on the Hong Kong Inventory Trade jumped round eight occasions to $14 billion within the first half of this yr, from simply $1.8 billion in the identical interval in 2024, based on Dealogic. That excluded SPAC listings, or particular goal acquisition firms established solely to lift capital by an IPO, with the intention of finally buying or merging with one other firm.
That places the town on monitor to develop into the world’s largest itemizing vacation spot this yr, surpassing the Nasdaq and the New York Inventory Trade. PwC projected up to 100 IPOs in Hong Kong this yr, with whole fundraising to exceed $25.5 billion.
The frenzy got here after years of lackluster IPO activity in the city amid post-pandemic risk-off sentiment and stuttering financial development.
Within the first half of this yr, there have been 43 new listings in Hong Kong, with proceeds topping $13.6 billion, surpassing the entire sum raised in 2024, information from monetary information platform Wind Data confirmed.
As compared, there have been solely 73 listings in 2023, elevating simply $5.9 billion, based on HKEX information.
The renewed curiosity is fueled by a confluence of things, together with Beijing’s regulatory tailwinds, the muted tempo of A-share listings, ample market liquidity, and delisting fears in U.S. markets, driving mainland firms to lift funds in Hong Kong, based on Steven Solar, head of China fairness technique at HSBC.
“The IPO increase within the Hong Kong market is definitely pushed by dual-listing of A-then-H [shares],” stated Solar. A-shares check with mainland-listed shares, whereas H-shares are these listed in Hong Kong.
“Increasingly more firms use the proceeds to fund their globalization technique,” Solar stated, because the Hong Kong greenback is extra fungible than the Chinese language yuan in international markets.
Beijing coverage tailwinds
A leap in Chinese language fairness costs last September, triggered by expectations of stronger financial stimulus, helped flip the tide on bearish narratives about China.
Initially of this yr, the discharge of DeepSeek’s low-cost however highly effective mannequin additional fueled a rally in Chinese language tech shares as traders started to reassess China’s capability for innovation, spurring a rerating of Chinese language equities.
“Market valuations broadly have improved again to historic common ranges, which supplies a greater backdrop for firms seeking to fundraise,” stated Eugene Hsiao, head of China fairness technique at Macquarie.
As of Wednesday’s shut, Hong Kong’s Dangle Seng index has gained a stellar 21% thus far this yr, making it one of many best-performing main markets globally.
Hopes that Chinese language authorities will probably unleash further fiscal spending to protect the financial system from any trade-related shock have additional underpinned enterprise and traders’ confidence.
In an obvious shift to assist the personal sector, Chinese language President Xi Jinping informed the nation’s top business leaders in February that the nation wants their assist to ship financial development.
That shift, coupled with the long-awaited approval by Beijing for mainland companies to record offshore, unleashed a wave of pent-up demand, notably for high-quality, consumer-facing firms which can be much less uncovered to geopolitical headwinds, stated Lorraine Tan, director of fairness analysis at Morningstar.
Chinese language securities regulator final yr issued a slew of measures aimed at fast-tracking approval for eligible mainland tech firms to record in Hong Kong. Hong Kong regulators additionally launched a so-called “Technology Enterprises Channel” in Could to facilitate IPO approvals for specialist expertise and biotech firms, notably these already listed within the mainland.
“Coverage encouraging main company residents to record in Hong Kong have supplied a much-needed shot within the arm” in reviving IPO exercise within the metropolis, stated Perris Lee, head of fairness capital market at Dealogic.
Mainland traders’ shopping for spree
One other driver for Hong Kong’s market rally has been the ample liquidity supplied by mainland traders piling into Hong Kong shares, chasing a man-made intelligence frenzy sparked by Deepseek’s breakthroughs and tapping into main capital-raising offers.
The southbound internet inflows, tracked by the cross-border hyperlink Stock Connect scheme, surged to a report excessive within the April-June quarter, for the reason that scheme was launched in 2014, based on Wind Data.
In stark distinction, China’s benchmark CSI 300 has barely budged this yr, up 0.2% yr thus far, based on LSEG information.
That has prompted onshore traders to shift cash to Hong Kong-listed equities, bolstering the Southbound inflows to account for practically half of Hong Kong’s day by day inventory turnover, based on Solar’s estimates.
A to H twin itemizing
These components helped push a flurry of mainland China-traded firms to hunt secondary itemizing in Hong Kong, together with battery maker Contemporary Amperex Technology.
Already listed in Shenzhen, the corporate raised more than $5 billion in a secondary listing in Hong Kong in Could, in what’s the world’s greatest such providing thus far this yr.
Moreover, Hong Kong’s market is extra “inclusive” of rising sectors, like AI, renewable power, digital consumption and biotech, which align with mainland companies’ wants, stated Wei Li, head of multi-asset investments for China at BNP Paribas.
Among the many over 200 lively IPO candidates within the pipeline to be listed on HKEX, over 40 are firms already listed on mainland inventory exchanges, Wind Data confirmed.
Different high-profile firms which have sought a main itemizing in Hong Kong this yr embrace bubble tea retailers Mixue Group, Guming Holding and ride-hailing platform operator Caocao Inc.
A Hong Kong itemizing for Chinese language firms would additionally assist their international enlargement plans.
Amid cutthroat competitors at residence and flared-up commerce tensions with the U.S., Beijing has referred to as on its main firms to develop globally and diversify their manufacturing areas.
“The urge for food to lift offshore funds, particularly in HKD, is a mirrored image of broader plans to develop into abroad markets,” stated Hsiao.
The heightened U.S.-China tensions have made Hong Kong a most well-liked IPO vacation spot for a lot of Chinese language companies, over considerations that the Trump administration might order a delisting from U.S. exchanges.
“A secondary itemizing basically supplies additional insurance coverage for U.S.-listed Chinese language firms in an unlikely occasion {that a} delisting turns into unnegotiable,” stated Lee, suggesting that firms are prone to have engaged monetary advisors to hammer out a “plan B,” with or with out delisting.