HK's ongoing IPO boom highlights potential for second and dual listings
Hong Kong Roars Back as Global IPO Hub
Hong Kong has once again established itself as a leading destination for initial public offerings (IPOs), attracting top-tier Chinese companies and global investors alike. In the first half of 2025, Hong Kong Exchanges and Clearing Limited (HKEX) hosted 42 companies that raised a total of US$13.5 billion, according to recent reports.
The resurgence of Hong Kong's IPO ecosystem can be attributed to a series of key changes and factors. Regulatory reforms have been instrumental in attracting a broader range of companies, including mainland Chinese enterprises and high-growth firms like technology startups. HKEX has implemented adjustments to listing rules and procedures, offering flexibility on financial requirements and listing criteria tailored for innovative sectors.
The market capitalization and number of mainland Chinese companies listed on HKEX have grown substantially, boosting Hong Kong's market depth and liquidity. This trend has reinforced Hong Kong's position as the primary gateway for Chinese companies to access international capital markets.
Advanced market infrastructure has also played a significant role in Hong Kong's revitalization. HKEX is actively integrating cutting-edge technologies, such as AI, to enhance trading efficiency, transparency, and market operations, thereby improving its competitive edge and attractiveness to issuers and investors.
International collaboration and regulatory alignment have also been crucial in addressing investor confidence issues and facilitating smoother cross-border listings. Efforts to improve cooperation and regulatory alignment across jurisdictions, especially with mainland China, have helped mitigate earlier concerns around audit inspections and regulatory access.
Leading Chinese firms like CATL and Midea continue to attract institutional investors, with CATL boasting major US investment banks and the Kuwait Investment Authority among its H-share holders. Average daily trading volume has surged to over HK$240 billion, reflecting strong investor demand for IPOs in Hong Kong.
Investor demand remains high, with an average return from IPO price to August 1st being 31%. Some of the money coming into Hong Kong is from mainland China, due to low interest rates there.
A new initiative to streamline the listing process for specialist tech and biotech companies has been introduced, further bolstering Hong Kong's appeal to innovative firms. Among recent rule changes is the easing of minimum public offering requirements for large Chinese firms listing in Hong Kong.
The number of active main board listing applications in Hong Kong exceeded 200, a record high, indicating a robust pipeline of upcoming listings in 2025 and beyond. The Hang Seng Index has bounced back to late 2021 levels, rising by 2.9% in July.
Listed issuers from Europe, the Middle East, and Southeast Asia should consider seeking a secondary listing in Hong Kong, as it could open doors to bond issuance and additional equity offerings within Asia. A dual listing may be the best option for companies coming to market for the first time.
Organizations such as Invest Hong Kong, the Hong Kong Trade Development Council, the Financial Services Development Council, and HKEX have been working tirelessly to update listing frameworks and ensure Hong Kong's competitiveness in the global IPO market.
In June, Thai coconut water brand IFBH Limited raised US$1.16 billion in its Hong Kong debut, demonstrating the city's broad appeal to companies from beyond mainland China. As Hong Kong continues to innovate and adapt, it remains poised to maintain its position as a global IPO hub for years to come.
- The surge in investor demand for IPOs in Hong Kong, as evidenced by an average return of 31% from IPO price, is driving the interest of businesses, particularly those in the technology and biotech sectors, to pursue listings in the city.
- To strengthen its position as a leading business hub, Hong Kong is actively inviting firms from Europe, the Middle East, and Southeast Asia to consider secondary listings in the city, which could offer benefits like access to bond issuance and additional equity offerings within Asia.
