Analysis of the Historic Breakthrough in the 2025 Hong Kong Stock IPO Market and Global Capital Inflows

With sufficient data support, I will now provide you with a systematic and comprehensive analysis report.

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The 2025 Hong Kong stock equity financing market exhibited explosive growth. According to Wind data, the annual total financing reached

, a increase from HK$174.5 billion in 2024, achieving a historic leap in scale [1]. This growth rate is unmatched among major global capital markets, marking a significant consolidation of Hong Kong stocks’ status as a global new stock fundraising hub.

Specifically, IPO financing performance was particularly outstanding:

listed on the main board throughout the year, a increase from 70 in 2024; IPO fundraising reached , a substantial year-on-year rise of , allowing Hong Kong stocks to reclaim the top position in global IPO financing after four years [1][2].

In addition to IPOs, the refinancing market also showed strong vitality. The total amount of refinancing raised in Hong Kong stocks in 2025 reached

, a increase from HK$86.3 billion in 2024; the number of refinancing projects reached 574, a year-on-year growth of 43.50% [1].

Looking at the distribution of financing methods:

• Placement Financing
  : Raised HK$289.6 billion, with an increase of
  438.66%
• Consideration Issue
  : Raised HK$26.9 billion, a 41.33% increase from last year
• Public Offering
  : Scale grew significantly, expanding from less than HK$200 million to HK$2.3 billion
• Rights Issue
  : Scale decreased, with annual financing of HK$7.6 billion, a 43.33% decrease from last year

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The enthusiasm of international capital participating in Hong Kong Stock IPOs has undergone a fundamental transformation. Wang Yajun, Head of Equity Capital Markets at Goldman Sachs Asia (ex-Japan), pointed out that when the market had not yet recovered in early 2024, the participation rate of leading international long-term funds (including US, European, and Asian funds) in Hong Kong Stock IPO projects was only about

, but by early 2026, the average participation rate of these leading funds had surged to , an increase of more than [3].

The underlying reasons for this change include:

1. High-Quality Asset Aggregation Effect
   : Leading companies such as CATL (Contemporary Amperex Technology Co., Limited), Hengrui Medicine, and MiniMax listed in Hong Kong, significantly improving the quality and attractiveness of the Hong Kong stock asset pool [3]
2. Improved Geopolitical Expectations
   : Compared to early 2025, the market’s pessimistic expectations regarding geopolitical factors have eased
3. Dividends from Institutional Reforms
   : HKEX launched innovative institutional arrangements such as the “Tech Enterprise Fast Track,” providing more convenient listing channels for unprofitable biotech companies (Chapter 18A) and specialized tech enterprises (Chapter 18C) [2]

Among the 66 listed companies that completed Hong Kong Stock IPOs in the first three quarters of 2025,

[4]. Taking CATL’s Hong Kong listing as an example, the cornerstone investor list consists entirely of , with raised funds reaching HK$41 billion [4].

This phenomenon indicates that the trillion-level international funds that originally could only buy “China concept” stocks on Nasdaq or the NYSE are being substantially “transferred” to the “offshore RMB + Hong Kong dollar” system, forming a financial breakwater that weakens the ability of the United States to harvest Chinese assets through the US dollar tide [4].

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In 2025, the annual net purchase of southbound capital reached a record high of

, showing that mainland capital’s willingness to allocate to Hong Kong stocks remains strong [2]. In early 2026, southbound capital continued its net inflow trend, with a cumulative net inflow of from January 5 to 9, averaging HK$6.54 billion in daily net inflows [5].

In terms of capital flows, southbound capital mainly favors

, including:

• Internet platforms such as Alibaba-W, Tencent Holdings, and Meituan-W
• Tech targets such as SMIC (Semiconductor Manufacturing International Corporation) and XtalPi Holdings

The joint participation of southbound capital and foreign capital provides abundant and solid liquidity support for the market, forming a “dual-drive” pattern [2].

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Trading activity in the Hong Kong stock market remains at a relatively high level. From January 5 to 9, 2026, the average daily turnover reached

, a 51% month-on-month increase [5]. Throughout 2025, the Hang Seng Composite Index rose , and the market style showed obvious “dual-drive” characteristics:

• Hang Seng Financial Index
  led with a leapfrog increase of 39.26%, reflecting the stabilizer role of heavyweight sectors amid improved macro liquidity
• Hang Seng Tech Index
  and the Sustainable Development Enterprise Index rose 23.45% and 31.36% respectively, showing capital’s high recognition of new-quality productive forces and long-term ESG values [1]

Regarding Hong Kong dollar funding rates, short-term volatility has increased, showing range-bound fluctuations overall. As of January 9, 2026:

• Overnight HIBOR:
  2.88%
• 1-month HIBOR:
  2.86%
• 3-month HIBOR:
  2.91%

As the Spring Festival approaches, seasonal capital demand rises, and short-term HIBOR may continue to maintain slight range-bound fluctuations, forming a certain constraint on market liquidity [5].

Regarding the impact of IPOs on Hong Kong stock market liquidity, the industry generally believes that

:

1. Short-Term Impact
   : Large-scale IPOs will indeed withdraw market funds in phases, leading to short-term liquidity tightness
2. Medium-to-Long-Term Impact
   : High-quality IPOs will not only not drain liquidity but will attract more international capital to enter, promoting the activity of the entire market [3]
3. Response to Lock-Up Expiry Wave
   : The real pressure of IPOs on the market may lie in the lock-up expiry wave of cornerstone investors 6 months after listing on the main board. However, if the company’s operations exceed expectations, it will attract purchases from new index funds, southbound capital, and foreign capital. This new buying power can fully cover or even exceed the selling pressure [3]

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As of January 9, 2026, the valuation levels of Hong Kong stocks are as follows:

• Hang Seng Index PE
  : 11.99x, at the
  87.79%
  historical quantile
• Hang Seng Index PB
  : 1.23x, at the
  87.70%
  historical quantile

In a horizontal comparison, the valuation level of Hong Kong stocks is still significantly lower than that of major US stock indexes (S&P 500 PE is 29.52x, Dow Jones Industrial Average is 30.70x, Nasdaq Composite is 42.19x), giving it a certain valuation depression advantage [5].

Hong Kong stocks still have a structural discount relative to A-shares. As of January 9, 2026, the

, which is in a historically high range, indicating that Hong Kong stocks are still undervalued relative to A-shares [5].

By industry, valuation divergence is obvious:

• Relatively Undervalued Sectors
  : Valuation quantiles of sectors such as healthcare, consumer discretionary, and information technology are still below 40%, with relative attractiveness
• Relatively Overvalued Sectors
  : Valuations of sectors such as real estate construction, raw materials, and financials have reached historically high ranges [5]

Although Hong Kong stock valuations have significantly recovered from lows, they still face certain constraints:

• High US Treasury Yields
  : The 10-year US Treasury yield reaches 4.18%, and the Hang Seng Index risk premium has fallen to a historically low range
• Limited Risk Premium Compensation
  : The ERP measured based on the 10-year US Treasury bond is approximately 4.2%, and the ERP based on the 10-year Chinese Treasury bond is approximately 6.5%. Hong Kong stocks’ compensation advantage relative to risk-free assets is not prominent [5]

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Most institutions judge that the active trend of Hong Kong stock equity financing will continue. Market observation institutions predict that the 2026 fundraising scale is expected to exceed

[3]. Goldman Sachs described the 2025 performance of Hong Kong stocks as “gaining strong momentum” and expects the momentum to “remain robust” in 2026. While the year-on-year growth rate may not match that of 2025, both IPO and refinancing scales will stay at a high level [3].

The main drivers supporting the continuation of the Hong Kong Stock IPO boom include:

1. Continuous Release of Policy Dividends
   :
   • Innovative institutional arrangements such as HKEX’s “Tech Enterprise Fast Track” continue to take effect
   • Listing rules for Chapter 18A (biotech) and Chapter 18C (specialized tech) are further optimized

2. Boom in Chinese Concept Stock Return and AH Dual Listings
   :
   • As of the end of December 2025, 111 mainland enterprises completed IPOs, with a total post-issue market value of US$562.3 billion
   • 19 A-share companies listed in Hong Kong through the “A+H” model, with total financing of US$17.95 billion, accounting for nearly half of the total Hong Kong Stock IPO financing scale [2]

3. Sufficient Reserve of Queuing Enterprises
   :
   • Currently, there are over
     300 enterprises queuing for IPOs
   • Nearly half of them are A-listed enterprises, including some super-large enterprises [3]

4. Optimization of Industry Structure
   :
   • The tech industry ranks first in terms of IPO quantity with 29 listings
   • The healthcare industry has seen a strong rebound, with 22 listings and a financing scale of US$3.79 billion [2]

Despite optimistic expectations, the following potential challenges need to be monitored:

1. Valuation Divergence
   : As more newly listed enterprises enter the Hong Kong stock market in 2026, the valuation divergence between buyers and sellers for these enterprises may widen [3]
2. International Capital Flows
   : Changes in expectations of the Federal Reserve’s interest rate cuts may affect international capital allocation decisions
3. Seasonal Factors
   : Seasonal factors such as the Spring Festival may cause disturbances to short-term liquidity

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Dimension	Conclusion
International Capital Inflows	Strong sustainability, with the participation rate of leading international long-term funds surging from 10-15% to 85-90%, and there is still room for growth in the future
Market Liquidity	Short-term phased pressure exists; high-quality IPOs will attract more capital in the medium to long term, forming a positive cycle
Valuation Level	Has significantly recovered from historical lows, but still attractive relative to US stocks, with structural opportunities available

1. Focus on High-Quality Leading IPOs
   : Benchmark projects such as CATL and Hengrui Medicine show that high-quality assets can attract international capital attention
2. Deploy in Tech and Healthcare Tracks
   : New economy fields such as AI, large models, and biotech will continue to be favored by capital
3. Seize AH Share Premium Opportunities
   : The valuation discount of Hong Kong stocks relative to A-shares provides potential opportunities for value investors
4. Focus on Layout During Lock-Up Expiry Periods
   : The 6-month lock-up period after listing may provide a buying window for high-quality targets

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[1] Investing.com - Wind: 2025 Hong Kong Stock Equity Financing Market Reaches HK$612.2 Billion, Up 250.91% (https://cn.investing.com/news/stock-market-news/article-3151222)

[2] Sina Finance - Hong Kong Stock Market Maintains High Activity, 11 Enterprises Listed in the First 16 Days of the Year (https://www.xincai.com/article/nhhpwhf2177531)

[3] Securities Times - 2025 Equity Financing Scale Surges 251%! 2026 Hong Kong Stock IPO Boom Continues (https://www.stcn.com/article/detail/3598542.html)

[4] ChinaVenture - Flocking to Hong Kong Stock IPOs, A Deliberate Strategy (https://www.chinaventure.com.cn/news/80-20260113-389734.html)

[5] Investing.com - AH Premium Hovers at High Levels, Which Hong Kong Stock Sectors Still Have “Valuation Depression” Potential? (https://cn.investing.com/news/stock-market-news/article-3166663)