Hong Kong’s IPO Market Surges
Hong Kong’s equity markets are witnessing a major resurgence, driven by a wave of Chinese companies turning to the city for fundraising. This renewed interest has sparked a significant rebound in initial public offerings, reviving a market that had experienced years of stagnation.
In the first half of this year, listing activity on the Hong Kong Stock Exchange soared. According to data from Dealogic, IPO volumes excluding special purpose acquisition companies reached 14 billion US dollars, a dramatic increase from just 1.8 billion dollars during the same period in 2024. This performance positions Hong Kong to become the leading global IPO destination in 2025, ahead of Nasdaq and the New York Stock Exchange. PwC estimates up to 100 IPOs will take place in the city this year, with total fundraising expected to exceed 25.5 billion dollars.
The number of listings also rose sharply. There were 43 new IPOs in the first half of the year, raising over 13.6 billion dollars—surpassing the full-year total for 2024. In comparison, there were only 73 listings in 2023 that raised 5.9 billion dollars.
Several factors are fueling this surge. Supportive regulatory policies from Beijing, reduced A-share listing activity, abundant liquidity, and growing concerns over delistings from US exchanges have all contributed to the rush of mainland companies seeking dual listings in Hong Kong. Analysts highlight the strategic value of raising capital in Hong Kong, where the local currency is more easily deployed internationally compared to the Chinese yuan.
A sharp rise in Chinese equity prices last September boosted sentiment, aided by expectations of further government stimulus. Early in 2025, Chinese technology stocks rallied again following the release of a powerful low-cost artificial intelligence model from DeepSeek, helping to reshape investor confidence in China’s innovation potential.
This more favorable market environment has encouraged companies to tap the equity markets. The Hang Seng Index has gained 21 percent so far this year, making it one of the best-performing stock markets worldwide. Investor optimism has also been supported by expectations of additional fiscal spending to cushion the economy against external risks.
In February, Chinese President Xi Jinping urged top business leaders to play a more active role in driving growth. This marked a shift toward greater support for the private sector, which, combined with new listing approvals for mainland firms, unlocked a surge of IPO activity. High-quality consumer-focused firms with limited geopolitical exposure are particularly well-positioned to benefit.
Regulators have introduced specific pathways to facilitate listings. The China Securities Regulatory Commission launched measures to speed up approvals for eligible mainland tech companies to list in Hong Kong. In May, Hong Kong also introduced a fast-track channel for tech and biotech firms already listed in mainland markets.
Investor inflows from mainland China have further boosted demand. Southbound investment via the Stock Connect scheme hit a record in the second quarter, accounting for nearly half of daily turnover in Hong Kong equities. Mainland investors are increasingly drawn to opportunities in Hong Kong amid a stagnating domestic market, where the CSI 300 index has barely moved.
A number of mainland-listed firms are now pursuing secondary listings in Hong Kong. In May, battery giant Contemporary Amperex Technology raised over 5 billion dollars in what is the world’s largest secondary listing so far this year. Among over 200 active IPO applicants on the HKEX, more than 40 are already listed in mainland exchanges.
Well-known consumer companies such as Mixue Group, Guming Holding, and Caocao Inc. have also chosen Hong Kong for their primary listings. Analysts say these listings reflect broader strategies to expand globally and raise capital in a currency that offers greater international flexibility.
The city’s market has become particularly appealing for sectors such as artificial intelligence, renewable energy, digital consumption, and biotechnology. This inclusiveness has attracted mainland companies seeking to diversify operations and reduce dependence on US markets. Concerns over potential delistings from US exchanges under the Trump administration have only accelerated this shift.
Industry experts suggest that many firms are preparing contingency plans to maintain market access regardless of political developments. A secondary listing in Hong Kong offers a safeguard for Chinese companies with US listings, ensuring they can continue raising capital even if delisting becomes unavoidable.