Mainstream international long-only funds have returned to participating in equity financing and issuance projects for Chinese companies. Goldman Sachs recently noted that the participation rate of international long-term capital in Hong Kong IPO deals has surged dramatically from a low of 10%-15% to a recent range of 85%-90%.
Wang Yajun, Head of Equity Capital Markets for Goldman Sachs Asia (ex-Japan), revealed at a recent media briefing that approximately 50-60% of the overseas capital that had previously withdrawn has now returned, and mainstream long-term international investors have come back to the market.
Against this backdrop, the Hong Kong stock IPO and follow-on financing markets are expected to remain highly active through 2026. Wind data shows that the scale of follow-on financing in the Hong Kong stock market surged by over 278% year-on-year in 2025. Wang Yajun forecasts that the scale of follow-on financing will remain high in 2026, while the number of primary IPO listings is also set to increase significantly.
In Wang Yajun's view, the market structure is poised for a subtle shift: the share of "A+H" listings, which accounted for half of the market by scale in 2025, is expected to decline. There will be more standalone Hong Kong primary listings, which will once again test the depth and resilience of the Hong Kong market.
Alongside the rise in activity, the impact of upcoming waves of share lock-up expirations is also drawing attention. GF Securities predicts that the market may face new peaks of lock-up expirations for mid-to-large cap companies (with market caps above HKD 30 billion) in March and September 2026. However, analysis generally suggests that an expiration does not equate to immediate selling, and high-quality companies are fully capable of attracting new long-term capital to take over the positions. Wang Yajun also emphasized that an orderly handover process could potentially lead to a win-win situation for both listed companies and investors.
Overall, driven by the dual forces of the sustained return of international long-term capital and robust corporate financing demand, the Hong Kong stock capital market is demonstrating strong resilience and appeal.
Recently, Hong Kong-listed companies have seen intensive positioning by several major foreign institutions. MiniMax, which listed on January 9, brought in renowned investors such as the Abu Dhabi Investment Authority (ADIA), Eastspring Investments, and Mirae Asset Securities. On January 8, both Zhipu AI and Jingfeng Medical debuted on the Hong Kong stock exchange on the same day; Zhipu AI attracted interest from international long-term funds like 3W Fund Management, while Jingfeng Medical drew in institutions including the Abu Dhabi Investment Authority (ADIA) and UBS Global Asset Management (Singapore) Ltd.
In fact, international capital had already shown a significant trend of returning to the Hong Kong IPO market in 2025. According to Goldman Sachs' observations, when the market was at a low point in early 2024, the participation rate of major international long-only funds in IPO projects by Chinese issuers was only 10%-15%; recently, this rate has climbed to 85%-90%.
"Of the overseas long-term capital that withdrew between 2022 and 2024, roughly 50-60% has currently returned, and further return is expected, with more international long-term capital coming back to Chinese issuer projects," Wang Yajun stated, adding that only a small number of non-mainstream funds have not returned due to factors like their own capital contraction, implying that the mainstay of the market has already returned.
Discussing investment preferences, Wang Yajun pointed out that international long-only funds primarily focus on two aspects: first, the long-term development potential of a company, not judging by short-term profit scale but valuing the long-term growth trajectory and sustainable profitability; second, the alignment between valuation and long-term returns. As long as both conditions are met, regardless of the industry sector, the company possesses long-term investment value.
"The Hong Kong IPO and follow-on financing markets are expected to maintain an active trend in 2026, with the overall fundraising scale likely to be above the historical average," Wang Yajun said.
According to Wind data, the total scale of follow-on financing in the Hong Kong stock market reached HKD 326.4 billion in 2025, a year-on-year increase of 278.15%. Wang Yajun believes that the scale of follow-on financing in Hong Kong will continue to remain high and maintain a growth trajectory in 2026, although the rate of growth will not see a dramatic leap. He noted that, accompanied by an acceleration in companies' overseas expansion, rising demand for foreign capital, and the characteristic high capital expenditure needs of recently listed sectors like new energy and AI, the willingness for follow-on financing among market participants will remain at a high level.
The path for follow-on financing in Hong Kong is very clear, as companies can initiate such fundraising just six months after listing. "Technology companies generally have large capital expenditures and high funding needs, making this path particularly attractive for them," Wang Yajun commented.
As of January 16, there were still over 300 companies in the pipeline for Hong Kong IPOs, primarily concentrated in the technology and pharmaceutical sectors. Wang Yajun expects that as these pipeline projects gradually come to market, the fundraising scale for primary IPOs in Hong Kong will see a significant increase in 2026.
In this context, the structure of Hong Kong IPO fundraising may undergo an adjustment: the share of fundraising from "A+H" listings, which contributed half of the market by scale in 2025, is expected to decline, while the number and fundraising share of companies opting for standalone primary listings in Hong Kong will grow simultaneously.
"This change will test the market's strength, resilience, and depth," Wang Yajun said. He explained that A-share companies listing in Hong Kong already have an anchor price, so even if there is a discount, market divergence is relatively limited; whereas for unlisted companies conducting a Hong Kong IPO, the lack of a clear valuation anchor makes pricing negotiations more complex.
With the increase in IPO supply, concerns have been raised about whether capital raising in the primary market will put pressure on the performance of the broader Hong Kong stock market. On this point, Wang Yajun believes that IPOs do not squeeze liquidity out of the Hong Kong market. On the contrary, the listing of high-quality companies can attract incremental capital into the market, boosting the overall capital pool and trading activity.
The wave of lock-up expirations is also being closely watched by the market. GF Securities estimates that new peaks of lock-up expirations for mid-to-large cap companies (market cap above HKD 30 billion) may occur in March and September 2026. GF Securities research points out that historically, several waves of cornerstone investor lock-up expirations have coincided with periods of decline in the Hong Kong market, such as mid-2011, the second half of 2015, March 2019, Q2 2021, and mid-2022. However, the two are not necessarily correlated, as the lock-up expiration wave in Q2 2025 did not trigger a market downturn.
GF Securities explains that an expiration merely means cornerstone investors "can sell," not that they "must sell" or "will sell immediately." Better-than-expected operational performance can attract new buying from index funds, southbound capital, and foreign investors; this new buying power can fully cover, or even far exceed, the selling pressure from cornerstone investors exiting due to their own capital allocation plans.
Analyzing this issue further, Wang Yajun noted that facing lock-up expirations is an inevitable test for listed companies. When market sentiment is strong and capital is abundant, if the handover process is managed properly, a smooth transition between secondary market investors and early investors can achieve a win-win outcome for both the listed company and its investors.