Exchange Square Complex will house the Hong Kong Stock Exchange on February 26th, 2025.
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BEIJING – Chinese companies are jumping at the window of opportunity to be made public in Hong Kong as global investors begin to return to the region following news of Deepseek’s artificial intelligence breakthrough in late January.
That’s a level of excitement that hasn’t been felt for more than three years despite the overflow of US trade tensions. Early public offerings are a lucrative way for early startup investors to leave and enjoy returns.
“Everyone works perfectly together. IPO candidates, investors, regulators,” said George Chan, EY’s global IPO leader. “All these three parties are working perfectly to actually cultivate a healthy Hong Kong IPO market at this time.”
“The US long-term fund is back, showing investors are more confident. [about] China added that post-IPO performances are also encouraging.
China’s Bubble Tea Giant Mix was published on March 3rd on a highly subscribed Hong Kong list. And with more indications going forward, Chinese battery giant Hyundai Amperex Technology (CATL) submitted in February when short video company Kuaishou listed it as it could be Hong Kong’s biggest IPO since 2021.
News from China-based Deepseek rivals Openai’s ChatGpt at a lower cost despite US restrictions on China’s access to advanced chips for training AI models. Hong Kong’s Hangsen index has skyrocketed to three-year highs.
Chinese President Xi Jinping also held a rare meeting with high-tech entrepreneurs in February, showing greater support for the private sector after Beijing took a more restrictive stance in recent years.
Six early public offers in Hong Kong raised over $1 billion in Hong Kong dollars ($130 million) in the first quarter, according to KPMG.
According to the consultant, Hong Kong saw 15 IPOs in all first quarters and raised HKD 17.7 billion, the best start of the year since 2021.
There’s still a long way to go before you can recover to that level. According to KPMG, Hong Kong saw 32 IPOs in the first quarter of 2021, raising a whopping 132.7 billion HKD.
The Hong Kong Stock Exchange has adjusted its listing rules interim, including companies that are already listed on mainland China, which support companies that provide stocks in Hong Kong.
In addition to CATL, other Chinese listed companies (Henglui Pharmaceuticals, Mabwell, Haiti Fragrances and Foods, Fortial Tech, Sanhua Intelligent Control) said Tiger Broker, an underwriter of IPOs for many Chinese companies in the US and Hong Kong.
“Chinese regulators are encouraging Hong Kong to expand its funding channels and list them in Hong Kong to support Chinese companies’ outbound mergers and acquisition needs,” the company said.
Not outside the forest yet
In the summer of 2021, a fallout against the IPO of US Chinese riding company Diddy urged regulators in both countries to scrutinise the waves of Chinese companies listed in New York.
The major issues have since been resolved, and Beijing has made clear rules for Chinese companies that they want to list outside the mainland. However, the Trump administration has shown that it could increase scrutiny of US capital flowing to China, in addition to rising tariffs.
The US and China have yet to show when the two leaders will meet in an attempt to build a deal. The surge in interest in AI and tech is also not yet sufficient to accelerate the recovery of China’s economy.
“At this point, all we can see is a good indicator,” said Chan of EY. But “there is one incident that could almost reverse the trend.”
“Things tend to have patterns,” he said. “If things can last for three or four months, then the rest of the year could last.”
