Can China reclaim its IPO crown?
中国能否重新夺回 IPO 王冠？

One after another, blockbuster Chinese listings are coming to Hong Kong. In May Hengrui Pharmaceuticals, a drug manufacturer, and CATL, a battery-maker, sold $5.3bn-worth of shares between them. Seres, which makes electric vehicles, hopes to raise $2bn in the coming weeks. Shein, a fast-fashion firm, may abandon plans for an offering in London for one in Hong Kong. All told, in April more than 130 applications were under consideration by the local exchange, up from fewer than 60 at the start of 2024. On current trends, the city will be the world’s largest stock-debut venue this year.
一波接一波的大型中国 IPO 正在香港进行。5 月，制药公司恒瑞医药和电池制造商 CATL 共出售了 53 亿美元的股份。生产电动汽车的 Seres 公司希望在未来几周内筹集 20 亿美元。快时尚公司 Shein 可能放弃在伦敦的上市计划，转而在香港上市。总的来说，4 月当地交易所收到的超过 130 份 IPO 申请，而 2024 年初这一数字还不到 60 份。按照当前的趋势，今年这座城市将成为全球最大的首次公开募股地。

For Chinese firms, this is an exciting but incomplete turnaround. Although their country is in the midst of a tech boom, last year they raised just $20bn in IPOs at home and abroad. Only twice in the past two decades have public share sales yielded so little. Although $9.8bn has been raised in Hong Kong so far this year, only $3.9bn has been drummed up on the mainland. Stock exchanges in Shanghai and Shenzhen are “barely functioning” as a destination for IPOs, says a banker. And not all Chinese companies will be able to go public in Hong Kong, either because of political constraints or because they are insufficiently prominent. A healthy domestic market is crucial to China’s tech future.
对于中国企业来说，这是一个令人兴奋但不完整的转变。尽管他们的国家正处于科技繁荣期，但去年他们在国内外通过首次公开募股（IPO）筹集的资金仅为 200 亿美元。在过去二十年中，公开募股筹集的资金量如此之少的情况仅出现过两次。尽管今年迄今在香港已有 98 亿美元的资金通过 IPO 筹集，但内地市场筹集的资金量仅为 39 亿美元。一位银行家表示，上海和深圳的证券交易所作为 IPO 目的地几乎无法正常运作。而且，并非所有中国公司都能在香港上市，因为存在政治限制，或者它们不够显赫。一个健康的国内市场对中国科技未来至关重要。

Reviving Hong Kong is a welcome start. Covid-19 and China’s sluggish economic growth caused valuations to slump in 2021; they stayed low into 2024, making listings unappealing. Firms such as Hengrui and CATL, listed on mainland exchanges, had been exploring Hong Kong, but permission from the China Securities Regulatory Commission (CSRC) was hard to obtain. It feared secondary listings in Hong Kong would drag down Chinese valuations.
重启香港是一个受欢迎的开始。新冠疫情和中国经济增长缓慢导致 2021 年估值大幅下滑；2024 年估值仍然较低，使得 IPO 变得不那么吸引人。恒瑞和宁德时代等在内地交易所上市的公司曾考虑过在香港上市，但中国证监会（CSRC）很难获得批准。它担心在香港进行二次上市会拉低中国公司的估值。

Rising tensions with America then provided another barrier. The Biden administration’s restrictions on American investment in Chinese companies working on sensitive technologies, such as artificial intelligence or semiconductors, made the country’s tech firms seem like risky bets.

Since September, when China became more serious about tackling its economic woes, investment has begun to trickle back. In January a mini tech-boom inspired by DeepSeek, an AI startup, added to optimism. With the Hang Seng China Enterprise Index, which tracks Chinese firms in Hong Kong, now 50% higher than at the start of 2024, opposition to secondary listings has weakened. Bankers report approvals from Beijing are flowing more freely.

Hong Kong has even found ways around America’s rules. Bankers now massage the language in IPO sales materials. Horizon Robotics, which went public in October, was a test case. The autonomous-driving firm also designs semiconductors and develops its own AI models. But such words were mysteriously absent from the description of its business in the share prospectus. These sorts of changes, bankers say, make foreign investors less wary.

Could a Chinese restart follow? Shanghai and Shenzhen have deep-rooted problems that lead to exuberance followed by languor. In 2022 Chinese IPOs raised a world-beating $81bn, reflecting a government plan that encouraged tech firms, especially in favoured fields such as chipmaking, to list at home. Leaders’ enthusiasm then waned in 2023 as stocks tumbled. They focused instead on liquidity in existing listings, fearing new offerings might reduce it. In 2024 only 100 firms went public, the fewest for at least a decade.

Regulators are now more sensitive than ever about leading stockmarket indices. The CSRC is said to have a lower bound of 3,300 points for the Shanghai Composite. To preserve liquidity, entire sectors, including the cosmetics and spirits industries, have been unofficially banned from listing. Only firms in critical tech industries are allowed to apply.

Instead of focusing on IPOs, the CSRC is pushing long-term reforms it hopes will stabilise prices, such as making state-owned companies more accountable to shareholders. If prices remain stable, more firms will gradually be allowed to go public. The CSRC has started contacting local regulators to spread the message that “the market is not closed”, an insider says. But because preparing an offering in China takes 12-18 months, a healthy flow of local share sales may start in earnest only in 2026, even if companies apply in droves.

For firms thirsty for funds, that is a long wait. Hong Kong will not suit them all. Seres, the EV-maker, is backed by Huawei, a telecoms giant and perhaps the main target of American sanctions. Its prospectus will test investors’ risk appetite and bankers’ creative-writing skills. The CSRC’s growing sway over IPOs in Hong Kong is another worry. And though China’s economy is showing signs of progress, growth may worsen as the trade war begins to hurt. That could harm valuations—and again make IPO approvals harder to obtain. ■

For more expert analysis of the biggest stories in economics, finance and markets, sign up to Money Talks, our weekly subscriber-only newsletter.