The Hong Kong stock market, which had stalled due to uncertainties such as geopolitical tensions, is regaining its status as Asia's financial hub. This year, Hong Kong overtook the U.S. Nasdaq and the New York Stock Exchange to reclaim the top spot worldwide for IPO funds raised. According to the Hong Kong Exchanges and Clearing (HKEX), there were a total of 119 initial public offerings (IPOs) on the Hong Kong market this year, raising about HK$285.8 billion (about 53 trillion won). That's more than triple the HK$87.5 billion raised last year.
According to the South China Morning Post (SCMP), the Financial Times (FT) and other foreign media on the 30th, six Chinese corporations went public in Hong Kong in a single day, closing out the year. On the same day, a wave of new listings came from diverse industries such as artificial intelligence (AI), Robotics, and consumer goods. In particular, the AI drug discovery corporation Insilico Medicine and 51World, which has virtual simulation technology, each jumped more than 45% and 20% from the first day of listing, drawing strong interest. Experts said the Hong Kong market has fully established itself as a strategic stronghold that goes beyond a simple fundraising venue, allowing corporations to avoid strict listing regulations in mainland China while achieving immediate consolidation with international capital.
A look at the six corporations that listed that day offers a glimpse into the future the Hong Kong market is aiming for. The most notable corporation is Insilico Medicine, an AI-based drug developer. The corporation listed at an offering price of HK$24.05 and surged intraday by 45.5% to HK$35 on the first day. Its market capitalization quickly surpassed HK$19.5 billion (about 3.6 trillion won). It also recorded a high subscription ratio of 1,427.37 to 1 among retail investors. It was a rare heat in Hong Kong's biotech sector in recent years. Insilico Medicine said it plans to invest about HK$2.28 billion raised through this listing into advancing its AI models and clinical studies across some 30 pipelines.
51World, a leader in the Digital Twin field, also made a successful market debut. The company has technology that replicates real-world cities identically in the virtual world and conducts real-time simulation, analysis, forecasting, and optimization while exchanging data. On the day, 51World rose more than 20% intraday, pushing its market capitalization past HK$15 billion.
In addition, household robot specialist corporation Yuan Robotics, real-time data infrastructure corporation Xunshi Communication, natural cosmetics brand Lim Mok Cho, and prefabricated steel structure corporation USAS joined the year-end listing lineup. Yuan Robotics raised about HK$1.8 billion by highlighting its high proportion of overseas sales in markets such as Japan and Europe. Xunshi Technology secured HK$1.24 billion by emphasizing its No. 1 market share in data solutions specialized for the asset management industry.
The recovery of the Hong Kong market is supported by indicators beyond the number of listings. This year, there were eight so-called mega IPOs exceeding HK$10 billion (about 1.86 trillion won) on the Hong Kong market. A representative case is CATL, the world's largest electric-vehicle battery maker. CATL completed a secondary listing in Hong Kong in May, marking the largest IPO of the year. Mixuebingcheng, the world's largest ice dessert franchise, also made its first appearance on the Hong Kong market this year. Citing experts, the FT said such large listings have supplied liquidity across the market and created a trickle-down effect that lifted valuations of subsequent small and mid-cap tech stocks.
Global investment banks (IBs) also reallocated funds to the Hong Kong market in line with the U.S. interest rate cut cycle. Consulting corporation Deloitte Touche Tohmatsu Limited (DTTL) said in a September report this year that "Hong Kong is strengthening its role as a 'super connector' and 'super value adder' that connects mainland China with global markets," adding, "As diverse investors return to Hong Kong, the market appears to be forming a structure for sustainable growth."
The Hong Kong market, once driven by real estate and finance, has now reshaped itself with new corporations such as AI, semiconductors, and biotech. Citing experts, PwC Hong Kong noted, "Hong Kong has evolved beyond a simple fundraising venue into a financial center that best recognizes the value of future technology."
After the 2019 Umbrella Movement, pessimism spread that the Hong Kong market had lost its status as a financial hub. Since the Chinese government swiftly implemented the National Security Act in 2020, concerns have spread that the freedom and autonomy Hong Kong enjoyed were severely undermined. However, as U.S.-China tensions intensified this year, the situation changed. Compared with mainland China's A-share market, Hong Kong's flexible listing regime and global funds sensitive to geopolitical instability began flowing into Hong Kong instead of the mainland.
In mainland China, the pace of IPO approvals is often adjusted at the discretion of regulators. Since last year, the mainland market has significantly tightened reviews of new listings in the name of market stability. According to Deloitte Touche Tohmatsu Limited (DTTL), hundreds of corporations are currently stuck on the waiting list. Hong Kong, by contrast, maintains a review system based on registration. Citing experts, Deloitte Touche Tohmatsu Limited (DTTL) said, "While the mainland market has strong regulation and high uncertainty, Hong Kong has introduced streamlined review procedures for large listings, enabling corporations to accurately predict the timing of fundraising."
Since 2023, the Hong Kong exchange has operated the specialized 'Chapter 18C' and 'Chapter 18A' regimes to encourage listings by innovative corporations. The two regimes were designed to open the door to listings even without revenue, as long as corporations related to AI, next-generation information technology, renewables, and biotech can prove their technological capabilities. It is a measure to increase the number of corporations settling into the market by creating channels to inject large-scale funds even at the no-sales stage.
Investment experts added that while individual investors account for a high share in the mainland market, leading to emotional trading, Hong Kong is driven by global institutional investors and hedge funds. For corporations, it means that if they maintain international management standards, they can be valued accordingly.
Of course, risks remain. If geopolitical risks in mainland China flare up more than now, foreign funds could exit in an instant. If the mainland's economic growth slows, it could weigh on the entire Hong Kong market index. Still, among experts, the view is gaining ground that the Hong Kong market has already passed the worst slump and regained its strength. In a recent report, investment firm Allianz Global Investors said, "China H-shares (Chinese stocks listed in Hong Kong) have begun to show markedly better performance than A-shares," adding, "From the perspective of global portfolio diversification, the Hong Kong market has once again become an essential investment destination."