A SLEW of companies have announced plans to list shares in Hong Kong over the next month in a further sign the city’s initial public offering (IPO) market is reviving.
At least six firms have said they intend to hold IPOs in the city by late January, raising a combined HK$3.3 billion (S$578 million), based on exchange filings on Tuesday (Dec 31). These include Chinese toy maker Bloks Group and autonomous vehicle tester Beijing Saimo Technology.
The rush of filings comes as the Hong Kong bourse has been taking steps to relax IPO requirements for mainland-listed companies to sell shares in the city. China’s securities regulator has also been encouraging the nation’s firms to list in Hong Kong, unveiling a package of measures to bolster the city’s position as an international financial hub.
Investors say the timing of the surge is not unusual given financial statements are only valid for six months, meaning listing announcements tend to peak in June and December. There’s an extra incentive this year too, as many firms may want to complete their listings before Donald Trump is inaugurated on Jan 20.
“From an investor’s viewpoint, I would say it’s a wise decision to get IPO before Trump administration because who knows what he is going to say with his tariff implementation or policy,” said Ronald Chan, chief investment officer at Chartwell Capital in Hong Kong. “That could shake up the economy for China and could create unnecessary volatility and that could also be valuation-destructive.”
Proceeds double
Hong Kong’s IPO proceeds have nearly doubled in 2024 to about US$10 billion, but that’s still below the annual average of about US$30 billion for the 10 years preceding the Covid-19 pandemic, according to data compiled by Bloomberg.
Among other companies filing IPO plans on Tuesday were Anhui Conch Material Technology, a subsidiary of Chinese cement giant Anhui Conch Group, ContiOcean Environment Tech Group, a provider of maritime environmental protection solutions mainly to shipowners, and recreational vehicle manufacturer New Gonow Recreational Vehicles.
The benchmark Hang Seng Index gained almost 18 per cent this year, helped by a blitz of stimulus measures announced by China from September. The Hang Seng China Enterprises Index, a gauge of Chinese stocks listed in Hong Kong, climbed 27 per cent – its best year since 2009.
“Sentiment is good now – you can be listed with higher valuations, and stock performance will be better,” said Kenny Wen, head of investment strategy at KGI Asia. “It’s a good motivation to hold an IPO.” BLOOMBERG
