Hong Kong Stock Exchange: The IPO market welcomed 17 listed companies to raise approximately HK$17.7 billion in the first quarter of 2025

The Zhitong Finance App learned that on May 2, Xu Jingwei (Johnson), head of global listing services at the Hong Kong Stock Exchange (00388), shared the latest growth trends and appeal of Hong Kong as a leading IPO market. Xu Jingwei said that in terms of the Hong Kong IPO market, the amount of capital raised in initial public offerings has also risen sharply. After last summer, the IPO market was very lively; by the first quarter of 2025, the IPO market welcomed 17 newly listed companies, raising about HK$17.7 billion (about US$2 billion), more than double the amount raised in the same period last year. More importantly, in terms of the number of IPO applications, I saw that many large and high-quality companies have submitted listing applications or announced their intention to go public in Hong Kong.

What is even more gratifying is that Hong Kong's subsequent distribution market is more active. In the first quarter of this year alone, the subsequent market raised more than 18 billion US dollars, an increase of 20 times over the same period last year. Among them are two large-scale follow-up releases, including BYD's $5.6 billion placement and Xiaomi Group's $5.5 billion financing. In fact, these two deals are two of the world's top three subsequent releases so far this year. As far as different fund-raising structures are concerned, the Hong Kong market also recorded the largest issuance of convertible bonds in the Hong Kong stock market. Baidu issued 2 billion US dollars of bonds exchangeable for Ctrip shares. Finally, Hong Kong has the Shanghai-Shenzhen-Hong Kong Stock Exchange. Through this mechanism, issuers can connect with Chinese investors' funds, which is a very attractive market channel in Hong Kong.

Xu Jingwei pointed out that there are several obvious trends in the 2025 IPO market. The first is the A+H listing. A-shares listed in mainland China chose to be listed in Hong Kong. This boom began with the US listing in September last year, after which SF Holdings went public in Hong Kong. Currently, as far as applications have been submitted or publicly announced listing intentions, there are about 30 companies planning to go A+H listing in Hong Kong. Second, companies listed through sections 18A and 18C of the listing rules, more generally speaking, are companies that focus on development in the field of technology, including new economy and biotechnology companies. So far, three companies have been listed under Chapter 18C, and we look forward to seeing more specialty technology companies listed in the future.

Overall, the main trends in the IPO market include the new economy, artificial intelligence, new energy, and technological unicorns. The Hong Kong market provides a very good listing platform for these companies, and it is hoped that the Hong Kong market will welcome more companies from these fields.

It is particularly worth mentioning that there has been a marked increase in dialogue between Hong Kong and Asian (especially ASEAN) issuers, and several companies considering public listing are studying the benefits of going public in Hong Kong. For example, in the past few months, several ASEAN companies have successfully listed in Hong Kong. Meanwhile, in the fourth quarter of last year, an e-commerce company headquartered in Singapore successfully listed in Hong Kong through a “special purpose acquisition company merger and acquisition transaction” (de-SPAC). Looking back at the first season, in March, an aluminum company headquartered in Indonesia was also successfully listed in Hong Kong.

As we all know, ASEAN and Hong Kong have always been very close partners within the Asian region. Meanwhile, the Hong Kong Stock Exchange has recently implemented a number of other measures. The first was to add the Stock Exchange of Thailand to the list of authorized stock exchanges in Hong Kong, and then a Thai beverage company has submitted an official application.

Furthermore, in addition to Asia, the Middle East is also a market that Hong Kong is committed to developing. Hong Kong announced the opening of an office in Riyadh, Saudi Arabia within this year, and has signed a Memorandum of Cooperation with the Saudi Stock Exchange Group, hoping to strengthen the cooperative relationship between Hong Kong and the entire Middle East region.

Furthermore, Xu Jingwei also said that Hong Kong also hopes to help more overseas listed companies return to Hong Kong for listing. There are two main categories of overseas listed companies that Hong Kong has been working with. The first category is Chinese ADR (American Depositary Receipts) listed in the US and then returned to Hong Kong. Starting with Alibaba in 2019, five or six years later, more than 30 ADR companies of this type have now returned to Hong Kong for listing. The second category is an overseas company that has itself listed on an international exchange. What the Hong Kong market and the Hong Kong Stock Exchange can provide is another listing platform other than their local market that can complement each other. Because there are many international investors in the Hong Kong market, and Chinese onshore investors can be reached through an interconnection mechanism, their dual listing in Hong Kong can bring a larger base of potential investors to international companies. Furthermore, especially for companies that do not trade in the Asian time zone themselves, dual listing allows their shares to have a slightly longer trading period on any day, which is quite an advantage.

Hong Kong is committed to continuously optimizing the listing environment to benefit issuers. First, Hong Kong has just completed an initial public offering market pricing consultation. The scope of this consultation was quite broad, covering pricing procedures, sale structures, different distribution structures, and even different types of investors. The consultation period has ended. I believe the results of the consultation will be announced soon and optimization measures will be launched. Second, the Hong Kong Securities Regulatory Commission and the Hong Kong Stock Exchange jointly announced the schedule for optimizing the new listing application approval process last year, with the aim of further improving the transparency of the new listing application approval process. There is also a “Technology Enterprise Hotline”, which Hong Kong is already preparing. Finally, Hong Kong previously mentioned “REIT Connect,” which is currently being studied.