Hong Kong's Reform-Driven IPO Boom Outpaces Global Rivals

Hong Kong's initial public offering (IPO) market has surged as the preferred capital-raising hub for Chinese tech companies, outpacing the U.S. and other global exchanges. In the first half of 2025, the Hong Kong Stock Exchange (HKEX) raised HK$107.1 billion (US$13.7 billion) through IPOs, a sevenfold increase compared to the same period in 2024, positioning it as the global leader in fundraising for the period . This boom is driven by a record 219 active IPO applications, with 44 companies listing in the first half of 2025-a 47% increase year-on-year .

A key driver is the rise of , where mainland Chinese firms list both on the Shanghai or Shenzhen exchanges (A-shares) and Hong Kong (H-shares). Four of the world's top 10 IPOs in H1 2025 were A+H listings, including Contemporary Amperex Technology (CATL), Jiangsu Hengrui Medicine, and Foshan Haitian Flavouring. These companies collectively raised over HK$93 billion, accounting for 72% of Hong Kong's total IPO proceeds . KPMG estimates that up to 60–70% of the 200+ pending A+H applications could debut in 2025, with two to three deals potentially exceeding HK$10 billion each .

Regulatory reforms have further incentivized Hong Kong as a destination. The , launched in May 2025, streamlines IPO processes for tech and biotech firms, offering confidential filings and expedited approvals. This initiative, coupled with reduced public float requirements (from 15% to 10%) and retail allocation caps (from 50% to 35%), has accelerated deal execution . PwC forecasts 90–100 IPOs in 2025, with total fundraising exceeding HK$200 billion, while KPMG and EY predict proceeds of HK$250 billion to HK$220 billion .

The mainland's regulatory tightening and slower IPO approvals contrast sharply with Hong Kong's openness. In H1 2025, mainland exchanges raised only HK$4.7 billion (US$600 million) through IPOs, down 83% year-on-year, as the China Securities Regulatory Commission (CSRC) imposed stricter rules on unprofitable firms . Meanwhile, Hong Kong's flexible capital flows and global investor access have attracted firms seeking international exposure. For instance, CATL's HK$4.6 billion H-share IPO-priced at a premium to its A-shares-highlighted robust demand from global investors .

Tech and healthcare sectors dominate the pipeline. The Hang Seng Biotech Index surged 60% year-to-date, reflecting investor appetite for innovation-driven firms . Meanwhile, AI, semiconductors, and electric vehicle (EV) firms are leveraging Hong Kong's ecosystem. Horizon Robotics, a Chinese autonomous driving chipmaker, plans a HK$5.4 billion (US$696 million) IPO in October, backed by Alibaba, Baidu, and Volkswagen .

Despite the optimism, risks persist. The concentration of Hong Kong's market in mainland-linked firms exposes it to geopolitical and regulatory shifts. KPMG notes that 80% of HKEX's capitalization is tied to Chinese issuers, amplifying volatility . Additionally, reduced retail allocations and faster approvals may compromise pricing transparency and long-term liquidity .

[1] Hong Kong IPO Frenzy Sets Sights on Record HK$250 Billion Fundraising in 2025 (https://www.businesstimes.com.sg/international/global/hong-kong-ipo-frenzy-sets-sights-record-hk250-billion-fundraising-2025)

[2] Hong Kong's IPO Boom: Gateway or Risk Trap for Investors? (https://blogs.cfainstitute.org/investor/2025/10/08/hong-kongs-ipo-boom-gateway-or-risk-trap-for-investors/)

[4] Hong Kong Leads Global IPO Fundraising in 2025 as Reforms and A-H Listings Draw Capital (https://hubbis.com/news/hong-kong-leads-global-ipo-fundraising-in-2025-as-reforms-and-a-h-listings-draw-capital)

[10] Horizon Robotics' US$700 Million IPO Boosts Hong Kong's Market After Beijing's Stimulus (https://www.scmp.com/business/banking-finance/article/3282572/horizon-robotics-us700-million-ipo-boosts-hong-kongs-market-after-beijings-stimulus)