Chinese investment banks compete for Hong Kong IPOs. China International Capital Corporation (CICC), Huatai Securities, CITIC Securities, and others are clearly leading. The number of companies submitting IPO applications this year has reached 171.

IPO is undoubtedly becoming an important area actively explored by Chinese investment banks. In the first five months of this year, a total of 29 enterprises have landed on the Hong Kong stock market, with 27 of them listing through IPO, an increase of 6 compared to the same period last year. The total amount raised is 77.346 billion Hong Kong dollars, close to the level of the whole of last year. In addition, there is 1 company listed through SPAC and 1 company transferred from GEM to the main board. It is worth mentioning that by 2025, Chinese securities firms are emerging as the absolute protagonists in the new stock issuance stage in Hong Kong. Wind data shows that in the first five months, a total of 23 securities firms participated in the new stock issuance in the Hong Kong IPO market, with over half of them being Chinese securities firms. Companies like CICC, Huatai International, and CITIC SEC have significantly more underwriting projects than foreign banks, completely changing the past dominance of foreign investment banks in the competition landscape. In addition to the warming trend of IPO listings on the Hong Kong stock market, the enthusiasm of enterprises to list in Hong Kong continues to rise, with many companies submitting applications to the Hong Kong Stock Exchange. According to Wind data, as of June 4th, a total of 171 companies have submitted applications, with 145 companies in the processing stage and 5 companies having passed the hearing. At the same time, Chinese securities firms have taken on the majority of the projects. While leading the IPO underwriting business in the Hong Kong stock market, Chinese securities firms are also accelerating their international expansion. Hong Kong, as an important bridge connecting the mainland and international capital markets, has become a key "bridgehead" for the internationalization layout of Chinese securities firms. Currently, 36 mainland securities firms have set up international business subsidiaries in Hong Kong, accounting for one-third of the total number of mainland securities firms. In addition to Hong Kong, Chinese securities firms are also expanding their focus to broader international markets, including Southeast Asia, the United States, and Europe. In the first five months, a total of 23 investment banks participated in the listing underwriting work of 27 Hong Kong IPOs. Chinese securities firms have dominated the underwriting projects in terms of market share and number of underwritings. Looking at the number of underwriting institutions, as far as IPOs in Hong Kong are concerned, CICC Hong Kong has underwritten 8 companies, accounting for over 29.63% of the market share. Huatai Securities International closely follows with 6 underwritten companies, accounting for 22.22% of the market share. Zhongyin International participated in the underwriting of 5 projects, accounting for 18.52% of the market share; CITIC SEC International underwrote 4 companies, accounting for 14.81% of the market share. Most investment banks underwrite in 1-2 projects. Morgan Stanley, Goldman Sachs underwrote 3 projects each; Citibank, Merrill Lynch, Jiabao International, China Securities Co., Ltd. International, Credit Suisse, and UBS underwrote 2 projects each, with market shares around 7%. Chao Yao Capital, Rijin Capital, Guangyin International, Caitong International, Puyin International, HAITONG INT'L, ICBC International, China Galaxy Securities International, Deutsche Securities, Oriental Finance, and JPMorgan each underwrite one project. In the past 12 months (June 2024 to May 2025), 79 new companies have been listed in Hong Kong, with 38 underwriting institutions participating in the underwriting. The investment bank with the most projects is CICC (19), with an underwriting participation rate of 24.4%. CITIC SEC ranks second with 14 projects and an underwriting participation rate of 17.9%; Huatai International ranks third with 13 projects and an underwriting participation rate of 16.7%; and Zhongyin International ranks fourth with 10 projects and an underwriting participation rate of 12.8%; UBS, Jiabao International, with 6 projects each tied for fifth place, with an underwriting participation rate of 7.7%. A total of 171 companies submitted applications this year, highlighting the advantage of Chinese investment banks. Amid the continued warming of the Hong Kong IPO market, mainland enterprises' enthusiasm for listing in Hong Kong has increased, with Chinese investment banks playing an increasingly critical role. According to the latest data, as of June 4th, 171 companies have submitted applications, with 145 companies in the processing stage. As of May 31st, a total of 162 companies have submitted listing applications to the Hong Kong Stock Exchange, with 141 in the processing stage. Overall, Chinese investment banks still have a higher proportion of projects among the participating institutions. In terms of the number of underwriting projects, CITIC SEC International, CICC, Huatai International and other institutions have become the undisputed "main force" in underwriting projects for submitting companies. They have underwritten 44, 40, and 17 IPOs respectively. In addition, China Securities Co., Ltd. International, Haitong International, GTHT International and other Chinese investment banks have underwritten more than 10 IPOs. In sharp contrast, the market share of foreign investment banks in the Hong Kong IPO underwriting business is gradually being squeezed by Chinese securities firms. The data shows that the foreign investment banks with the most underwriting projects are Goldman Sachs, Morgan Stanley, and JPMorgan, with 7 projects each. The three firms together only account for 21 projects, less than the business volume of a single leading Chinese securities firm. Known foreign investment banks such as Citibank, UBS have underwritten only 2 projects each, with a significantly decreased market share. Further deepening of the international layout of Chinese investment banks It is worth mentioning that while leading the underwriting business of Hong Kong IPOs, Chinese investment banks are also accelerating their international layout. Since the 1990s, Chinese investment banks have been expanding internationally for more than 30 years, and Hong Kong, with its superior geographical location and status as an international financial center connecting the mainland with the world, has become the preferred route for Chinese investment banks to "go global". For securities firms, the pursuit of overseas market development has evolved from "icing on the cake" to a "must-win battlefield", and it is also an essential step for Chinese investment banks to move towards world-class status. In order to expand into overseas markets, in addition to Hong Kong, Chinese investment banks are also looking towards broader international markets, expanding to Southeast Asia, the United States, and Europe. Chinese investment banks are deploying their resources worldwide with unprecedented intensity. In terms of the international business development strategy of leading securities firms, Chinese investment banks are moving towards a full chain, cross-bordeMarket services are advancing.CICC is headquartered in Hong Kong and has also extended its operations to New York, London, Singapore, and other seven major international financial centers, forming a business network covering major global markets. CICC leverages the expertise of Chinese experts in promoting financial connectivity in the "Belt and Road" initiative, deepening its support for Chinese companies in cross-border investments, attracting foreign investments into China, promoting industrial chain collaboration and capital market connectivity. In May of this year, CICC's branch in the Dubai International Financial Centre (DIFC) officially opened. According to CICC, the DIFC branch will serve as a two-way investment bank hub and strategic bridge connecting China and the Gulf region. It will assist UAE and Gulf region institutions in expanding their business presence in China, facilitate two-way investments between companies in both regions, collaborate with local sovereign funds, financial institutions, and key companies, assist them in actively participating in Chinese capital market projects, and support business cooperation between China and the Gulf region. CITIC SEC operates its European business hub in London, offering leading stock brokerage services to the European market, covering more than twenty countries in Europe. It continues to increase its investment in Southeast Asia, India, Japan, among other markets, with the aim of building a comprehensive overseas business system offering "full range, full business lines, full licenses." Galaxy Securities completed its full acquisition of Galaxy-Uni-Chang Securities in 2023, expanding its business network to Singapore, Malaysia, Indonesia, Thailand, and other regions. Huatai has established a global value chain system that links mainland China with China's Hong Kong, Singapore, the United States, the United Kingdom, and other regions. It is actively expanding into mature markets such as Japan, as well as emerging markets in Southeast Asia and the Middle East, constructing an integrated comprehensive financial service system. Huatai points out that the international business of securities firms is gradually entering a period of harvest, with international subsidiaries continuing to expand their balance sheets and make an increasingly significant contribution to performance, becoming an important source of growth. In terms of expansion models, organic growth, as well as mergers and acquisitions, moving from traditional brokerage to building comprehensive financial systems, advancing in developed markets and emerging markets simultaneously. Experience from overseas investment banks suggests that internationalization should be based on local strengths, focus on key business breakthroughs, exercise caution in cross-border mergers and acquisitions, considering valuation and synergy, and avoiding rushing into decisions. Given the complex macroeconomic environment both domestically and internationally, securities firms' international business is still exploring opportunities and facing challenges. This article is reprinted from CAILIAN PRESS, GMTEight Editor: Chen Wenfang.