A slew of companies have announced plans to list shares in Hong Kong over the next month in a further sign the territory’s initial public offering (IPO) market is reviving.
At least six firms have said they intend to hold IPOs in Hong Kong by late this month, raising a combined HK$3.3 billion (US$424.94 million), based on exchange filings yesterday. They include Chinese toy maker Bloks Group Ltd (布魯可集團) and autonomous vehicle tester Beijing Saimo Technology Co (北京賽目科技).
The rush of filings comes as the Hong Kong board has been taking steps to relax IPO requirements for mainland-listed companies to sell shares in the territory. Chinese securities regulator has also been encouraging the nation’s firms to list in Hong Kong, unveiling a package of measures to bolster the territory’s position as an international financial hub.
Photo: Bloomberg
Investors say the timing of the surge is not unusual given financial statements are only valid for six months, meaning listing announcements tend to peak in June and December.
There is an extra incentive this year too, as many firms might want to complete their listings before US president-elect Donald Trump is inaugurated on Jan. 20.
“From an investor’s viewpoint, I would say it’s a wise decision to get IPO before Trump administration because who knows what he is going to say with his tariff implementation or policy,” said Ronald Chan (陳惠仁), chief investment officer at Chartwell Capital Ltd (大正資本) in Hong Kong. “That could shake up the economy for China and could create unnecessary volatility and that could also be valuation-destructive.”
Hong Kong’s IPO proceeds nearly doubled last year to about US$10 billion, but that is still below the annual average of about US$30 billion for the 10 years preceding the COVID-19 pandemic, data compiled by Bloomberg showed.
Among other companies filing IPO plans yesterday were Anhui Conch Material Technology Co (安徽海螺材料), a subsidiary of Chinese cement giant Anhui Conch Group (安徽海螺集團); ContiOcean Environment Tech Group Co (匯舸環保科技), a provider of maritime environmental protection solutions mainly to shipowners; and recreational vehicle manufacturer New Gonow Recreational Vehicles Inc (新吉奧房車).
The benchmark Hang Seng Index gained almost 18 percent this year, helped by a blitz of stimulus measures announced by China from September. The Hang Seng China Enterprises Index, a gauge of Chinese stocks listed in Hong Kong, climbed 27 percent, its best year since 2009.
“Sentiment is good now — you can be listed with higher valuations, and stock performance will be better,” KGI Asia Ltd (凱基亞洲) head of investment strategy Kenny Wen (溫傑) said. “It’s a good motivation to hold an IPO.”
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