Hong Kong’s IPO market accelerates amid tariff uncertainty, China stimulus optimism

[SINGAPORE] Companies have been flocking to file applications for initial public offerings (IPOs) in Hong Kong amid uncertainty surrounding trade tariffs, and optimism on China’s stimulus measures.

As at Apr 30, a total of 115 IPO applications has been submitted – more than double the 55 applications recorded during the same period in 2024.

According to Dealogic data, IPOs in Hong Kong have raised US$2.4 billion from 16 deals for 2025 as at May 6 – more than twice the US$1 billion raised from 15 IPOs over the same period in 2024. Hong Kong currently ranks fifth globally in IPO funds raised this year.

Elaine Tan, senior manager, LSEG Deals Intelligence, said: “This marks the strongest year-to-date performance since 2021.”

“A surge in both the numbers and size of IPOs has fuelled the activity to date, building on renewed activity during the second half of 2024, driven by the US$4.6 billion listing by Midea Group last September,” she added.

Chinese fresh-beverage brand Mixue Group made headlines with the city’s biggest IPO of the year so far, pulling in US$510.8 million. When shares opened to retail investors in February, demand surged, drawing over HK$1.6 trillion (S$268.2 billion) in subscriptions.

Besides Mixue, this year saw strong showings by other IPOs in Hong Kong, including Duality Biotherapeutics which saw shares gain more than 115 per cent, and beverage company Auntea Jenny that started trading on Thursday (May 8) after raising HK$273 million.

The IPO scene in Hong Kong looks more vibrant compared to the past few years when there were policy risks, but sentiment has improved due to more expected China policy support, said Francis Tan, Asia chief strategist at Indosuez Wealth Management.

With companies turning away from the US due to market uncertainty, they are seeking opportunities in China, he added.

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“There are whispers of potential delisting of those listed in the US, with companies perhaps deciding to list in Hong Kong instead,” said Tan.

US President Donald Trump unveiled tariffs on trading partners on Apr 2, and eventually hiked those on China to 145 per cent. They were met with retaliatory rates of 125 per cent.

But top Chinese and US officials held trade talks at the weekend. Both sides agreed to suspend part of their tariffs on their respective exports for 90 days, they said in a joint statement on May 12.

Hong Kong’s strong IPO pipeline and repricing of Chinese equities will continue to attract capital inflows, says ANZ Research.

“The strong capital inflow started from Q4 2024 when Chinese authorities stepped up efforts to stimulate the economy with measures to boost the equity market,” the analysts added.

The Chinese authorities announced another slew of fiscal stimulus measures on Wednesday, to cushion economic damage caused by the US trade war. The measures included interest-rate cuts by 10 basis points to 1.40 per cent and a major liquidity injection of one trillion yuan (S$178 billion).

Tan of LSEG highlighted that a robust pipeline of upcoming listings – including Contemporary Amperex Technology (CATL), Jiangsu Hengrui Pharmaceuticals and Foshan Haitian Flavouring & Food – suggests the potential for 2025 IPO activity to surpass that of 2024. It was previously reported that CATL and Chery Automobile could raise at least US$5 billion and US$1.5 billion, respectively.

She said key sectors that will drive this momentum include energy, technology, healthcare, industrial and consumer.

“With strong regulatory support, improving market liquidity, and continued easing of the interest rate cycle, Hong Kong’s IPO market appears well-positioned for sustained recovery,” she says.