[HONG KONG] A parade of China’s mega listings in Hong Kong since the turn of the year has helped restore some of the shine to the city as the world’s largest fundraising destination for initial public offerings (IPOs).
A significantly large number of Chinese firms seeking stock listings in Hong Kong, along with a rush of capital inflows from the mainland, has created a convergence of Chinese finance in the city.
Fundraising in Hong Kong through IPOs reached HK$107.1 billion (S$17.5 billion) from 44 listings in the first six months of the year, far surpassing both the Nasdaq and the New York Stock Exchange (NYSE), according to data from the Hong Kong Stock Exchange (HKEX).
This sent HKEX to the top of global exchanges for H1 2025, representing its best mid-year performance sine 2016.
A spokesperson for the exchange, citing confirmation from several data providers including Dealogic, KPMG and EY, told The Business Times that its IPO fundraising in H1 put it at the top of global IPO rankings.
The top listing on HKEX during this period was the US$5.3 billion IPO of China’s largest battery maker Contemporary Amperex Technology in May.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
This was followed by the HK$9.9 billion raised by Chinese drugmaker Jiangsu Hengrui Pharmaceuticals, which also took place in May, and the HK$9.4 billion IPO in June staged by China’s largest condiment maker, Foshan Haitian Flavouring & Food.
Hong Kong has long been in an intense tussle with Shanghai for the title of being China’s primary funding source, and it seems that Hong Kong has the upper hand for now.
As at Jul 8, Dealogic’s team counted 184 planned IPOs in Hong Kong, all of which were from the city and the mainland, with the exception of two from the Cayman Islands, and one each from Malaysia, Singapore and the United Arab Emirates. Of the planned IPOs, 49 belong to the technology sector.
Perris Lee, head of convertible bonds and Asia-Pacific equity capital markets at Ion Analytics, the parent company of Dealogic, said: “At this point, we can say with much certainty that technology stocks will be central to many of the Hong Kong IPOs in the queue, thanks in no small part to (Chinese artificial intelligence company) DeepSeek.”
He attributes the recent strong rally in Hong Kong stocks to a Deepseek-inspired optimism that may also spill over to industries such as healthcare and consumer-related businesses.
The hectic pace of fundraising is also supported by what analysts call “homecoming” listings by mainland Chinese companies with stocks already listed elsewhere outside the mainland, primarily in the US.
Lee said that, given a US-China relationship that has been “polite” at best in recent years, there have been many such homecoming listings in Hong Kong and China by US-listed Chinese companies.
“Many of the US-listed companies that should or could seek a secondary listing have done so,” he said. “Only a few remain on the drawing board.”
In particular, he named technology giant Alibaba and electric vehicle (EV) maker Xpeng.
“These two deals were significant in many ways. One key aspect is that they were doing a dual primary listing in Hong Kong, rather than a secondary listing. Dual primary listings subject the companies to strict regulations in both the US and Hong Kong.”
The immediate prospects are brightened by a long listing pipeline stretching well into the coming year. HKEX said it had given regulatory approval to 16 companies, with the applications of 176 companies currently “under processing” as at Jun 30.
Against this background, analysts said there is a far greater cascading of southbound net capital inflows into Hong Kong’s stock market.
James Wang, head of China strategy at investment bank UBS Global Research, said the total amount raised this year in IPOs was dwarfed when compared with its peak reached in 2020, as well as with the unprecedented southbound net inflows this year. In the first quarter alone, these hit HK$400 billion, the highest in history.
Wang attributed this to the improved quality and vintage of companies listed in Hong Kong, tighter IPO restrictions in mainland China, improved liquidity in Hong Kong and a greater appetite for core Chinese assets from foreign investors for stocks such as EV car leader BYD, Tencent and Alibaba – basically global champions and top AI players.
Southbound net inflows reached US$80 billion at the end of May, according to a chart released by Morgan Stanley. However, the pace had slowed down in that month, following a period of strong inflows from January to late April.
To put things into perspective, a survey released in June by Deloitte China’s Capital Market Services Group showed the IPO funds raised in Hong Kong this year exceeded those raised by Nasdaq and the NYSE by HK$31 billion and HK$43 billion, respectively.
Of the 40 listings tracked by Deloitte in Hong Kong in H1, only two IPOs were staged by companies from outside China: one from Singapore and the other from Indonesia.
“National support for and emphasis on developing the technology and innovative sectors will encourage new quality productivity forces such as technology and new energy companies to raise funds in the capital market and enter the market spotlight in the second half of 2025,” said Tony Huang, national A-Share offering leader, capital market services group, Deloitte China.
Deloitte expects companies to raise HK$200 billion in IPOs in Hong Kong by the end of the year, through 80 listings.
There are potentially 25 IPOs from companies whose stocks are already listed on the mainland’s A-shares market. Deloitte said that most of Hong Kong’s new listings will come from the technology, media and telecommunications sectors, as well as consumer companies.
