Hong Kong Exchange Listing Funds Nearly Match Three-Year Total in 10 Months

Select Language:

From January through October, companies that went public on the Hong Kong Stock Exchange have raised nearly as much as the total funding over the past three years. During this period, 81 firms completed their listings, accumulating approximately HKD 216 billion (around USD 27.8 billion). Over half of these listings were secondary offerings, involving 14 companies already listed in mainland China.

In comparison, total proceeds from listings on the Hong Kong exchange from 2022 to 2024 reached HKD 274.4 billion. The recent surge in listings can be attributed to several key factors.

First, new policies for initial public offerings in mainland China have caused a spillover effect, as lengthy waiting periods and stricter review processes have prompted some companies to seek more efficient fundraising opportunities in Hong Kong, which offers quicker procedures.

Second, Chinese companies listed overseas are increasingly cautious and risk-averse, now showing a preference for returning to Hong Kong for their listings.

Third, large transactions have concentrated this year’s activity, significantly boosting the overall amount raised.

Additionally, regulatory collaboration has improved. Recent updates involved the Chinese finance ministry and securities authorities jointly revising the list of approved accounting firms for companies listed in Hong Kong.

Hong Kong has also fine-tuned its listing policies to attract specialized tech firms, allowing unprofitable advanced manufacturing and green technology companies to go public. The city has further simplified its dual primary listing process to make it more accessible.

Another contributing factor is the widening valuation gap; Hong Kong stocks have become more attractive relative to mainland Chinese stocks. The Hang Seng Stock Connect China-AH Premium Index, which measures the price difference between mainland and Hong Kong shares, dropped nearly 23% in October, reaching 115.44 points from 149.88 at the end of last year. This indicates that the valuation premium of mainland shares over Hong Kong shares has narrowed considerably.

Dual listings in Hong Kong and mainland China are viewed as effective strategies for optimizing financing structures and boosting international presence. Experts believe that, supported by growing liquidity and Hong Kong’s strengthened position as an international financial hub, the trend of dual listings in both markets will continue.