Robin Zeng, founder and chairman of Modern Amperex Know-how 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 throughout the CATL itemizing ceremony on the Hong Kong Inventory Trade in Hong Kong, China, on Tuesday, Might 20, 2025.
Paul Yeung | Bloomberg | Getty Photos
Traders and companies’ enthusiasm for Hong Kong’s fairness capital markets is roaring again, as Chinese language firms flocked to town for fundraising, sparking a frenzy out there that had been forsaken lately.
Outsized offers and a state-backed push for firms listed within the mainland exchanges to hunt an inventory in Hong Kong have thrust capital-raising quantity to the strongest first half-year since 2021, in response to knowledge from knowledge supplier Dealogic.
New itemizing volumes on the Hong Kong Inventory Trade jumped round eight occasions to $14 billion within the first half of this 12 months, from simply $1.8 billion in the identical interval in 2024, in response to Dealogic. That excluded SPAC listings, or particular objective acquisition firms established solely to boost capital via an IPO, with the intention of finally buying or merging with one other firm.
That places town on monitor to turn into the world’s largest itemizing vacation spot this 12 months, surpassing the Nasdaq and the New York Inventory Trade. PwC projected up to 100 IPOs in Hong Kong this 12 months, with complete 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 progress.
Within the first half of this 12 months, there have been 43 new listings in Hong Kong, with proceeds topping $13.6 billion, surpassing the full sum raised in 2024, knowledge from monetary knowledge platform Wind Data confirmed.
As compared, there have been solely 73 listings in 2023, elevating simply $5.9 billion, in response to HKEX knowledge.
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 boost funds in Hong Kong, in response to Steven Solar, head of China fairness technique at HSBC.
“The IPO growth within the Hong Kong market is definitely pushed by dual-listing of A-then-H [shares],” mentioned 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 mentioned, because the Hong Kong greenback is extra fungible than the Chinese language yuan in world 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.
Firstly of this 12 months, the discharge of DeepSeek’s low-cost however highly effective mannequin additional fueled a rally in Chinese language tech shares as buyers 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 offers a greater backdrop for firms trying to fundraise,” mentioned 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 12 months, 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 buyers’ confidence.
In an obvious shift to help the non-public sector, Chinese language President Xi Jinping informed the nation’s top business leaders in February that the nation wants their assist to ship financial progress.
That shift, coupled with the long-awaited approval by Beijing for mainland corporations to listing offshore, unleashed a wave of pent-up demand, notably for high-quality, consumer-facing firms which can be much less uncovered to geopolitical headwinds, mentioned Lorraine Tan, director of fairness analysis at Morningstar.
Chinese language securities regulator final 12 months issued a slew of measures aimed at fast-tracking approval for eligible mainland tech firms to listing in Hong Kong. Hong Kong regulators additionally launched a so-called “Technology Enterprises Channel” in Might to facilitate IPO approvals for specialist know-how and biotech firms, notably these already listed within the mainland.
“Coverage encouraging main company residents to listing in Hong Kong have offered a much-needed shot within the arm” in reviving IPO exercise within the metropolis, mentioned Perris Lee, head of fairness capital market at Dealogic.
Mainland buyers’ shopping for spree
One other driver for Hong Kong’s market rally has been the ample liquidity offered by mainland buyers 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 web inflows, tracked via the cross-border hyperlink Stock Connect scheme, surged to a file excessive within the April-June quarter, for the reason that scheme was launched in 2014, in response to Wind Data.
In stark distinction, China’s benchmark CSI 300 has barely budged this 12 months, up 0.2% 12 months up to now, in response to LSEG knowledge.
That has prompted onshore buyers to shift cash to Hong Kong-listed equities, bolstering the Southbound inflows to account for almost half of Hong Kong’s each day inventory turnover, in response to 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 Might, in what’s the world’s largest such providing thus far this 12 months.
Moreover, Hong Kong’s market is extra “inclusive” of rising sectors, like AI, renewable vitality, digital consumption and biotech, which align with mainland corporations’ wants, mentioned Wei Li, head of multi-asset investments for China at BNP Paribas.
Among the many over 200 energetic 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 major itemizing in Hong Kong this 12 months 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 help their world enlargement plans.
Amid cutthroat competitors at residence and flared-up commerce tensions with the U.S., Beijing has known as on its main firms to increase globally and diversify their manufacturing places.
“The urge for food to boost offshore funds, particularly in HKD, is a mirrored image of broader plans to increase into abroad markets,” mentioned Hsiao.
The heightened U.S.-China tensions have made Hong Kong a most popular IPO vacation spot for a lot of Chinese language corporations, over considerations that the Trump administration may order a delisting from U.S. exchanges.
“A secondary itemizing basically offers additional insurance coverage for U.S.-listed Chinese language firms in an unlikely occasion {that a} delisting turns into unnegotiable,” mentioned Lee, suggesting that firms are prone to have engaged monetary advisors to hammer out a “plan B,” with or with out delisting.
