Hong Kong's IPO fundraising this year has topped global rankings, accompanied by robust activity in the RMB bond market and mergers and acquisitions. Shi Qi, Managing Director and Head of Capital Markets at CICC, stated at a media workshop on Tuesday (November 11) that Hong Kong IPO financing has exceeded $30 billion this year, nearly tripling year-on-year. Compared to last year's $10 billion and the previous year's under $6 billion, the scale, themes, and participation levels have been highly encouraging.

Shi revealed that CICC currently has over 100 Hong Kong IPO pipeline projects, including plans for leading A-share companies to list in Hong Kong. She expressed confidence that the strong IPO momentum will persist into 2026.

This year, international long-term investors and sovereign wealth funds have become notably more active, even taking on rare roles as cornerstone investors. Total cornerstone investments reached approximately $12 billion, with foreign capital accounting for 42% by region. For instance, in the international placement of CATL (03750), foreign funds represented over 60% of participation.

Shi highlighted that "A+H" listings have been a key theme in Hong Kong's IPO market this year. Among the 85 IPO projects, 17 were A+H listings, accounting for 20% in number but raising over $18 billion—60% of Hong Kong's total IPO proceeds this year.

Regarding the sustainability of the A+H trend, Shi noted that many leading A-share companies are still preparing for Hong Kong listings. With A-share IPO pacing gradually easing, she believes this will not significantly divert companies from Hong Kong, ensuring the A+H wave continues. More A-share firms, particularly in high-tech sectors like semiconductors and robotics, are expected to list H-shares in Hong Kong next year.

The trend of U.S.-listed Chinese companies returning to Hong Kong for dual-primary listings is also set to continue, providing additional support to the local IPO market. Such moves help mitigate delisting risks while boosting investor confidence.

However, some recent IPOs have underperformed post-listing. Shi attributed this to sector positioning, noting that certain stocks lacked scarcity in Hong Kong. Still, she emphasized that long-term performance ultimately reflects fundamentals.

Unprofitable biotech IPOs have seen frenzied oversubscription, sometimes by thousands of times. While this reflects the sector's rising global competitiveness and valuation reassessment, Shi cautioned that early-stage companies may vary in quality. She warned that internal due diligence remains stringent, and such exuberant subscription sentiment may not last, with rationality likely to return.

The new Hong Kong IPO mechanism, effective in August, has also revitalized the market. Addressing retail investor concerns over the non-mandatory clawback under "Mechanism B," Shi explained that the fixed 10%-60% public offering allocation actually benefits institutional investors, easing post-listing sell-side pressure and improving pricing stability. Scarcity has also spurred retail interest.

Market data supports this view: of the 25 IPOs since the reform, 22 opted for Mechanism B, with 21 closing higher on debut. DEEPEXI TECH (01384) and BAMA TEA (06980) surged 150.56% and 86.7%, respectively.

According to Ryanben Capital, CICC has sponsored 50 out of 173 IPOs (29.1%) over the past 24 months (as of October 2025), 31 out of 98 (32.0%) in the last 12 months, and 27 out of 81 (33.8%) this year.