Chinese Listings Spark Hope for Hong Kong Stock Revival

A Surge in IPO Activity Signals a Market Turnaround

A wave of Chinese company listings is breathing new life into Hong Kong’s stock market. Investors are increasingly optimistic that this robust pipeline of initial public offerings (IPOs) will help drive broader market gains.

IPO fundraising in Hong Kong reached HK$77 billion (US$9.9 billion) in the first five months of 2025 — the highest since 2021 — led by battery giant Contemporary Amperex Technology Co. (CATL). More major listings are on the horizon, including Will Semiconductor Co. and Seres Group Co., reflecting China’s industrial ambitions and growing tech prowess.

Market Still Recovering Despite Growing Listings

While trading turnover hasn’t picked up significantly yet, the increase in high-quality listings is a positive shift for a market long affected by weak liquidity and a lack of prominent new entrants. The Hang Seng Index, despite a 16% gain this year, still lags 25% below its 2021 peak.

Chen Da, founder of Dante Research, said the influx of major IPOs could make Hong Kong “China’s Nasdaq,” especially when compared to mainland growth boards.

Hong Kong’s Evolving Role as a Global Gateway

Mainland Chinese firms make up around 70% of the Hang Seng Index, reinforcing Hong Kong’s role as a vital entry point for global investors. Though this has made the market sensitive to China-US tensions, recent success stories suggest investors are willing to accept volatility in exchange for access to China’s “new economy.”

Companies like Mixue Group, Guming Holdings Ltd., and Bloks Group Ltd. have seen their shares more than double since listing this year, reflecting strong investor appetite.

Strategic Shift Toward a New Market Identity

Yang Ruyi of Shanghai Prospect Investment Management said the new listings are “reshaping the DNA of the market,” transitioning Hong Kong from a China-offshore hub to a “globally watched benchmark for the new economy.” She predicts that tech and consumer trends could make up half the exchange’s weighting in coming years.

Echoes of Past Booms

Some analysts are drawing comparisons to the early 2000s IPO boom that sparked a 300% rally in the Hang Seng Index by 2007. Zeng Wenkai of Shengqi Asset Management believes current momentum mirrors the post-Tencent 2004 IPO era and forecasts a 20% rise in valuations over the next year.

In a further boost, Shein Group Ltd. may opt to list in Hong Kong instead of London. Meanwhile, Hong Kong Exchanges & Clearing Ltd. has surged 36% in 2025, reflecting the bullish mood.

IPO Market Poised for Global Comeback

Analysts at CGS International estimate IPO proceeds could reach HK$160 billion (US$20 billion) this year, potentially placing Hong Kong atop global IPO rankings.

Bing Yuan of Edmond de Rothschild Asset Management said the success of firms like CATL and Jiangsu Hengrui Pharmaceuticals Co. shows that international investors favor companies with global reach and sound governance.

Optimism Tempered by Risks and Timeframes

Despite the upbeat sentiment, analysts warn that it may take time for these listings to shift broader market liquidity and global fund flows. There is also a concern that new IPOs could cannibalize demand from existing stocks.

Nevertheless, the Hang Seng Index is one of Asia’s top-performing benchmarks this year. Its valuation — currently 10.3 times forward earnings — is above the three-year average of about 9.

A Path to Global Capital Flows

Gary Tan of Allspring Global Investments pointed out that the inclusion of H-share listings in MSCI indexes could become a major driver for capital inflows, especially into underrepresented sectors like tech and consumer.