Amid global uncertainties, the Hong Kong Stock Exchange (HKEX) is witnessing a resurgence in its initial public offering (IPO) market, attracting Chinese companies seeking a stable listing environment. In 2024, HKEX experienced a significant upsurge with 71 new listings, raising $11.2 billion, marking an 88.9 percent increase from the previous year. This growth positioned Hong Kong as the fourth-largest IPO market globally.

Chinese law firms, notably Jingtian & Gongcheng, King & Wood Mallesons, and Commerce & Finance Law Offices, have been pivotal in facilitating these listings, with a positive outlook for further expansion. Predictions by PwC suggest that Hong Kong’s IPO fundraising could soar to $16-20 billion in 2025, potentially propelling the region into the top three global IPO destinations.

Eric Chow, managing partner at Commerce & Finance Law Offices, anticipates a resurgence in the Hong Kong IPO market in the upcoming year, driven by A-share listings and secondary offerings from Chinese companies previously listed abroad. The market has witnessed a notable interest from Chinese firms in key sectors like technology, healthcare, and consumer goods, buoyed by Beijing’s support for private enterprises and technological advancements.

The evolving market dynamics have introduced new listing mechanisms such as de-SPAC transactions and specialized technology company listings under Chapter 18C, necessitating legal advisors to stay abreast of regulatory changes. Noteworthy is the increasing role of PRC law firms in IPOs, leveraging their profound understanding of Mainland Chinese companies and extensive networks.

The current geopolitical landscape, marked by escalating U.S.-China tensions, has positioned Hong Kong as an appealing listing hub for Chinese companies, particularly those eyeing secondary listings post-U.S. listing. This trend, coupled with the city’s status as an international financial center, has steered many companies towards Hong Kong as their primary listing destination, avoiding the complexities of U.S. regulations.

For Chinese entities eyeing a Hong Kong listing, navigating both local listing rules and offshore listing requirements from the China Securities Regulatory Commission is imperative. While Hong Kong offers a streamlined IPO process with a 40-business-day review timeline, meticulous preparation is essential to meet regulatory standards.

Looking ahead, the HKEX’s initiatives to enhance global investor access to Chinese opportunities, especially in strategic sectors like AI, semiconductors, and new energy, are poised to benefit companies opting for a Hong Kong listing. Compliance with regulations and a clear growth strategy are crucial for attracting investors.

The future outlook underscores the importance of cross-border expertise, with A-share companies eyeing secondary listings in Hong Kong expected to create substantial opportunities for legal advisors with dual-market proficiency. The optimism surrounding these trends signals a promising trajectory for Hong Kong’s stature as a preferred IPO destination.