Momentum in the Hong Kong fundraising market that comes after initial public offerings (IPOs) is set to continue, senior investment bankers said, driven by the robust capital needs of mainland firms and global investors reorienting their portfolios towards Chinese assets.
The amount raised using follow-on offerings – including share placements and equity-linked debt issuances like convertible bonds after IPOs – reached US$31.4 billion in the first half of this year, according to data compiled by Dealogic. The full-year figure for 2024 was US$27.9 billion and the record was US$83.9 billion, set in 2021.
A growing number of listed companies, seeking to expand their businesses and fund research and development (R&D), combined for a positive outlook for capital markets, bankers said.
“The current wave of A-to-H IPOs creates a substantial opportunity for most listed companies to consider follow-on offerings to enhance their liquidity,” said Jacky Leung, head of Hong Kong coverage at Goldman Sachs. The A-to-H trend refers to a slew of mainland-traded firms selling H shares in Hong Kong, including electric vehicle (EV) battery maker Contemporary Amperex Technology, which completed the world’s largest IPO this year.
CATL founder and chairman Robin Zeng (fifth right) strikes the ceremonial gong to mark the start of trading at the HKEX Connect Hall on May 20. Photo: Sun Yeung
“Hong Kong’s role as a gateway for Chinese technology, media and telecoms (TMT) and industrial companies to access global capital, particularly amid a complicated geopolitical landscape”, was a key factor that drove companies to seek follow-on offerings, added Leung, who also serves as Goldman’s co-chief operating officer of the TMT group for Asia, excluding Japan.
