As Hong Kong stock investment sentiment warms and the money-making effect of new listings rebounds, some recent IPOs have attracted over 300,000 subscription applications. Goldman Sachs China equity strategist Fu Si noted in a media interview that this year's Hong Kong IPO cornerstone investors show a significant increase in foreign participation compared to the previous two years, rising from less than 20% to 28%. While still below the levels seen during the 2020-2021 boom period, the positive development is the increased participation of long-term allocation-oriented funds such as overseas pension funds and sovereign wealth funds.

Fu Si believes that relatively speaking, these investors maintain more stable positions and make judgments based on medium to long-term fundamentals. Consequently, many companies in this IPO cycle have demonstrated relatively stable performance after listing, which may signal a distinctive characteristic of the current IPO round.

"Competition in these industries is now very intense, but there will ultimately be a consolidation trend. During this consolidation process, industry leaders will prevail due to their more abundant capital, better resources, and slightly higher operational efficiency, thereby capturing larger market share," Fu Si explained.

Fu Si indicated that long-term funds focus more on long-term trends, which is why some leading H-shares in industries facing intense competition or even "involution" competition trade at smaller discounts to their A-share counterparts compared to other Hong Kong stocks, and may even trade at premiums.

Fu Si pointed out that excluding SPAC (Special Purpose Acquisition Company) listings, Hong Kong's IPO fundraising in the first half of the year reached $14.1 billion, ranking ahead of the US NASDAQ and New York Stock Exchange. Although CATL (03750) raised a total of HK$41 billion, and Hengrui Medical (01276) and Haitian Flavouring (03288) each raised over HK$10 billion, the average scale of Hong Kong IPOs this year still falls short of the period between 2019 and 2021 when mega IPOs appeared intensively.

"Among currently applying companies, there are no particularly large ones. Total fundraising may be gradual and progressive, unlike the explosive growth from large IPOs in 2021. This is actually a good thing, as it won't create such large immediate pressure on market liquidity. The current state is relatively healthy," Fu Si commented.

Fu Si believes this is actually beneficial for the overall market. As of mid-July, more than 50 Hong Kong new stocks this year raised a total of HK$125 billion, representing less than 1% of total market capitalization.