The fourth quarter has seen a sharp cooling in the momentum of initial public offerings in Hong Kong.
Only three new listings have occurred since October, marking a significant deceleration for the market. Each of these three new listings closed at a price lower than their initial offer on debut. Two additional candidates for initial public offerings withdrew their applications after completing the necessary procedures.
Bookbuilding has commenced for six firms, including Hosin Global Electronics, Sichuan Neautus Traditional Chinese Medicine, Ganzhou Hemay Pharmaceutical, Jiangsu Xinde Semiconductor Technology, Suzhou Denglin Technology, and RelyEZ Energy Storage Technology. These six entities are seeking to raise a combined total of up to HK$6 billion.
Nip Chun-pong stated that the mood has been further dampened by growing investor concerns regarding mainland China’s tax rules on overseas investment and a regulatory crackdown targeting artificial demand and IPO rigging. Nip Chun-pong noted that firms in the hard-tech sector requiring large amounts of research and development funding still feel a strong pressure to list before the year ends, even if they must accept lower valuations.
He observed that most issuers are currently in a wait-and-see stance, predicting that deal volume in the fourth quarter might drop below third-quarter levels unless market sentiment improves significantly.
Nip Chun-pong stated, “In contrast, consumer companies constrained by low valuations are choosing to wait.” The Securities and Futures Commission has intensified its oversight of the IPO market over several months. Hong Kong is currently experiencing its most active year for initial public offerings since 2020.
A total of 118 companies had listed by the end of September, raising HK$388 billion. Edward Au Chung-hing, southern region managing partner at Deloitte China, said the traditional peak issuance window ran from mid-November to mid-December, meaning the current consolidation was normal and there was no need to revise down annual projections yet.
Deloitte projects that Hong Kong’s IPO fundraising will reach HK$480 billion in 2026. Michael Yu said Hong Kong could see another wave of listing applications in the first half of 2027. Yu said quality start-ups, especially in high-barrier tech and biotech sectors that originally raised high-profile US dollar funds, could return to the market by June next year.
