Surge in A-share companies seeking Hong Kong listings: Over 80 applications filed this year

ZC Asia has learnt that the fervour among A-share companies to list in Hong Kong continues to intensify, with several industry leaders formally submitting listing applications to the Hong Kong Stock Exchange recently. Following the application by Sinovac Biotech, a leading A-share recombinant protein drug manufacturer, medical device pioneer Mindray Medical has also formally initiated its Hong Kong listing process. According to incomplete statistics, over 80 A-share companies have submitted listing applications to the Hong Kong Stock Exchange this year, forming a significant wave of ‘A+H’ listings.

Number of A-share listings in Hong Kong hits record high

The pace of A-share companies listing in Hong Kong has accelerated markedly this year. With companies such as Seres and Joyson Electronics successively listing on the Hong Kong stock exchange, the number of enterprises achieving dual ‘A+H’ listings this year has reached 16, surpassing the total number of listings over the past five years.

In terms of fundraising scale, leading enterprises in various sub-sectors have performed particularly well. CATL raised nearly HK$40 billion in its Hong Kong listing, while Seres, Sany Heavy Industry, and Haitian Flavouring all exceeded HK$10 billion in fundraising. Market performance shows that approximately 70% of newly listed companies have seen their share prices rise since listing, with Chifeng Gold and CATL both doubling in cumulative gains.

Currently, a substantial number of A-share companies are queuing to list on the Hong Kong stock market. Beyond Mindray Medical and Sinovac Biotech, which have already submitted applications, companies including Proya, Tianwei Food, and Fuhuan Microelectronics have formally filed their applications this year. Companies such as Anker Innovation and Daotong Technology have explicitly disclosed their plans to list in Hong Kong. By sector, biopharmaceuticals, technology, and consumer goods have emerged as the most popular avenues for Hong Kong listings.

Market Rationality Returns Amidst the Boom

The surge in A-share companies listing in Hong Kong stems from the combined effects of the Hong Kong Stock Exchange's ongoing regulatory enhancements and enterprises' global expansion needs. Yang Delong, Chief Economist at Qianhai Kaifu Fund, noted: ‘The pricing of A-share companies' offerings in Hong Kong is typically lower than on the A-share market, which helps attract southbound capital while also driving more foreign investment into Hong Kong's stock market.’ Zhuang Yan, President of the Hong Kong Science and Technology Innovation Integration Association, stated: ‘The Hong Kong SAR government has recently established a dedicated task force and service centre for mainland enterprises going global, explicitly supporting and assisting mainland companies in expanding overseas.’

Policy support continues to be rolled out. Li Ming, Vice Chairman of the China Securities Regulatory Commission, stated at the recent International Financial Leaders Investment Summit that cooperation between mainland and Hong Kong capital markets would be further strengthened. This includes measures such as improving the efficiency of overseas listing filings and expanding the scope of stocks eligible for the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect programmes.

However, against this backdrop of market fervour, Hong Kong stocks have recently shown signs of rational correction. Some newly listed stocks have underperformed expectations, with some even experiencing price drops on their first trading day. Baili Tianheng announced on 12 November its decision to postpone the global offering and listing of its H-shares, citing ‘current market conditions’ as the reason. This phenomenon reflects investors' growing caution regarding IPO pricing, with expectations that offering prices should allow reasonable upside potential post-listing.

Overall, the trend of A-share companies listing in Hong Kong is expected to persist. However, all market participants should maintain rationality amidst their enthusiasm to collectively uphold a healthy and orderly market environment.

Disclaimer: The content herein is for reference only and does not constitute any form of investment advice. Should any information contained herein prove inaccurate, incomplete, or potentially misleading, please refer to the company's official announcements. Market risks exist; investment requires caution.