Jacky Lai, EY Hong Kong Capital Market Services Spokesperson, said in a news release: “The Federal Reserve's interest rate cuts and reforms by HKEX to enhance market efficiency, including streamlining the listing application process and allowing trading during bad weather, have vitalized the Hong Kong market. It is further supported by Chinese mainland regulators introducing initiatives to facilitate the listings of numerous leading companies, prominent enterprises, and unicorns in Hong Kong.”
A key trend in Hong Kong’s IPO market this year has been the presence of Chinese cornerstone investors with a state-owned enterprise (SOE) background. In 2024, about 70% of cornerstone investors had an SOE background, up 10% over 2023. These investors favor the technology sector, biotechnology and healthcare, and retail and consumer products.
EY expects the Hong Kong IPO market to perform well in 2025, “potentially reclaiming a leading position globally.” It believes that the streamlined IPO vetting process in Hong Kong and the introduction of allowing A-share companies with a market value of over HK$10 billion to undergo expedited vetting will augur well for the market.
The South China Morning Post reported in early December that Tencent-backed WeDoctor has revived its plan for a Hong Kong stock listing. The company plans to submit its application at the end of December and hopes to complete the IPO by June. It expects to raise US$400 million to US$500 million, according to sources cited by SCMP.
The question now is if Hong Kong’s IPO market has entered a genuine recovery period or if this is just a temporary uptick. From 2003 to 2019, it was frequently among the best performing exchanges in the world, but its fortunes have waned in tandem with economic travails on the Chinese mainland. The sustained growth in China’s consumer technology sector drove much of the Hong Kong IPO boom in the aughts and 2010s. However, since late 2020, the central government has been cracking down on Chinese consumer tech giants while favoring so-called “hard technologies” in strategic areas like semiconductors, the new-energy vehicle ecosystem, and aeronautics. Many of these companies prefer to list on mainland exchanges where they can focus on domestic investors.