Following a 251% surge in equity financing scale in 2025, the Hong Kong stock market remains highly active, with over 300 companies currently queued for IPO listings.
"To summarize the performance of Hong Kong's stock market in 2025, one could use the phrase 'full of life and vigor,' while looking ahead to 2026, it is 'business as usual.'" On January 15, Wang Yajun, head of Goldman Sachs Asia (excluding Japan) Equity Capital Markets, told reporters from China Securities Journal and others that the beginning of the year has been exceptionally busy. He also mentioned that international capital has significantly flowed back, with leading international long-term funds (including U.S., European, and Asian funds) now participating in Hong Kong IPO projects at a rate of 85%-90%.
Currently, most institutions predict that the active trend in Hong Kong's equity financing will continue. Regarding the impact of IPOs on liquidity in Hong Kong stocks, interviewees pointed out that structural issues should be distinguished from temporary phenomena. A good IPO not only does not drain liquidity but instead attracts more international capital.
From 'full of life and vigor' to 'business as usual'
In 2025, Hong Kong's equity financing market achieved explosive growth. According to Wind data, the total financing reached HKD 612.2 billion, a year-on-year increase of 250.91%. The IPO market regained the top global position, with 117 companies raising a combined HKD 285.8 billion, a year-on-year increase of 224.24%.
"The momentum of Hong Kong stocks in 2025 will continue," said Wang Yajun. If we use 'full of life and vigor' to summarize the performance of Hong Kong stocks in 2025, then looking ahead to 2026, the phrase 'business as usual' applies. Although year-on-year growth may not match that of 2025, both IPOs and secondary offerings are expected to remain at high levels.
This is almost a consensus in the market. Especially for Hong Kong's IPO market in 2026, several market observers predict that fundraising will exceed HKD 300 billion. The driving forces mainly come from policy benefits by the Hong Kong Stock Exchange, the return of Chinese概念股 (Chinese concept stocks), dual listings in mainland and Hong Kong markets, and increasing overseas expansion needs. Senior investment banking professionals revealed that December 2025 once felt relatively cold, but January suddenly became very active again. Wang Yajun also stated that it had been exceptionally busy since the beginning of the year.
In 2025, A-share companies sparked a wave of listings in Hong Kong, and many institutions believe this will remain the main theme in 2026. However, Wang Yajun’s perspective differs slightly. He noted that, in terms of financing scale, about half of Hong Kong's IPO projects in 2025 came from A-share companies, but this proportion may decline in 2026, with more first-time listings. This means Hong Kong’s IPO market will once again face tests of market depth and resilience, as valuation gaps between buyers and sellers for such companies tend to be larger.
Additionally, Wang Yajun predicts that an increasing number of AI-related and supply chain enterprises will list in Hong Kong in 2026, covering sectors such as telecommunications, data centers, and semiconductors.
Data shows that as of January 15, there were 327 companies in the Hong Kong IPO pipeline, nearly half of which are A-share listed companies, including some large-scale enterprises. Liu Guohua, head of Financial Accounting Advisory Services for Greater China at EY, told reporters from China Securities Journal that this provides solid assurance for market activity in the near term and future.
High-quality IPOs will attract more international capital.
However, the strong demand for IPOs has sparked discussions about whether it will exert sustained pressure on the secondary market, especially as several newly listed stocks in the Hong Kong stock market at the end of 2025 experienced a rare decline below their issue price.
Liu Chenming, Chief Strategist at GF Securities, analyzed and pointed out that Hong Kong stock IPOs will not lead to a bearish market. On the contrary, due to a surge in demand for the Hong Kong dollar, the exchange rate may hit the strong-side convertibility guarantee, prompting the Hong Kong Monetary Authority to release liquidity in the interbank market, lower HIBOR rates, and boost the Hong Kong stock market.
Wang Yajun believes that the decline below the issue price is a normal adjustment mechanism in the capital market, rather than an indication of a market reversal. He stated that as an international capital market, Hong Kong theoretically has an immense capacity for funds. A good IPO not only does not drain liquidity but also attracts more international capital, thereby enhancing overall market activity.
Liu Guohua, citing A+H companies as examples, noted that discussions about liquidity and listing performance in the Hong Kong stock market should differentiate between structural issues and temporary phenomena. While concentrated issuance in the short term may exert some pressure on market liquidity, in the medium to long term, high-quality A-share listings in Hong Kong can improve the overall quality and depth of the Hong Kong stock market, enabling international investors to better understand the growth potential of China's leading enterprises and make long-term investment decisions. Moreover, post-listing stock price performance reflects the effective operation of pricing mechanisms in mature markets, which is more closely related to IPO pricing levels, investor structure alignment, and industry cycle fluctuations.
The real impact of IPOs on the Hong Kong stock market may lie in the wave of cornerstone investor lock-up expirations six months after the main board listing. According to Liu Chenming’s analysis, some individual stocks face significant pullbacks one week before the expiration, followed by a rapid bottoming out or rebound after the expiration. However, exceptions exist, as the lock-up expiration wave in the second quarter of 2025 did not lead to a decline in the Hong Kong stock market. Companies with better-than-expected operations attract new index funds, southbound capital, and foreign investments, which could fully offset—and even far exceed—the selling pressure from cornerstone investors exiting due to fund arrangements.
Wang Yajun holds a similar view. He stated that lock-up expirations are an inevitable phase after a company's listing. If market sentiment is positive and funds are abundant, companies can smoothly navigate through the lock-up period while replacing early cornerstone investors with secondary market funds that are optimistic about the company in the long term, achieving a win-win situation for both investors and the company.
International investors have significantly returned.
Among the many investors participating in Hong Kong stock IPO projects, the rush of international capital into Chinese assets has become a hot topic. Public information shows that several Hong Kong stock IPO projects, represented by CATL, Hengrui Pharma, and MiniMax, have been enthusiastically sought after by international long-term funds.
Wang Yajun expressed deep insight into this: 'We observed a substantial return of international funds in 2025.' He mentioned that when the market had yet to recover in early 2024, the participation rate of top-tier international long-term funds (including U.S., European, and Asian funds) in Hong Kong stock IPO projects was only around 10%–15%. However, by early 2026, the average participation rate of these top funds had surged to 85%–90%, and more international long-term funds are expected to return to the Hong Kong market in the future.
Benefiting from Chapter 18A and Chapter 18C of the Hong Kong Stock Exchange’s listing rules, among over 300 companies currently in line for Hong Kong listings, most are concentrated in technology (software services, hardware equipment, semiconductors, etc.) and pharmaceuticals (biopharmaceuticals, medical devices, and services). What types of enterprises will be more favored by international investors?
According to Wang Yajun, international long-term investors focus on two main aspects when selecting investment targets: whether the company has long-term growth potential and whether the current valuation can deliver long-term returns. Specifically, regarding sectors, he stated that consumer companies with clear business models, predictable profitability, and reasonable valuations, as well as technology enterprises in AI and large-scale models, will continue to attract international long-term capital.
For biotech companies, Wang Yajun noted that since the introduction of Rule 18A by the Hong Kong Stock Exchange (HKEX) in 2018, the biotech sector in Hong Kong has undergone a cycle from initial enthusiasm to market consolidation and is expected to rebound by 2025. The biotech sector in Hong Kong's stock market has now taken shape and will develop according to its own dynamics. Given that certain assets are only accessible through the Hong Kong market, some international investors specializing in biotech will remain invested in Hong Kong stocks.
Liu Guohua believes that the driving forces behind Hong Kong's IPO market in 2026 will come from four types of companies: first, biotech firms, which will sustain their strong momentum from 2025; second, specialized technology companies, including leading enterprises in artificial intelligence, new energy, and semiconductors; third, representatives of traditional industries undergoing upgrades and transformations, especially those with technological advantages and brand influence; and fourth, emerging consumer brands from mainland China, primarily leveraging the Hong Kong platform to expand their international presence.
Editor/Melody