CICC: Over 100 Hong Kong Stock IPO projects in hand, strong IPO momentum expected to continue next year

Since the beginning of this year, the amount of funds raised in Hong Kong's IPO market has ranked first globally, trading volume in the RMB bond market has increased significantly, and mergers and acquisitions activities are active. Shi Qi, Managing Director and Head of Capital Markets at CICC, stated at a "Media Workshop" held on Tuesday, November 11th, that the fundraising scale of Hong Kong's IPO market has surpassed 30 billion US dollars, nearly doubling year-on-year. Comparing to the 10 billion US dollars from last year and less than 6 billion US dollars from the year before, it is exciting in terms of scale, theme, and participation. Shi Qi disclosed that CICC currently has a pipeline of over 100 Hong Kong IPO projects, including plans for A-share leading companies to list in Hong Kong, believing that the strong momentum of IPO can continue into 2026. Shi Qi emphasized that this year, international long-term investors and sovereign funds have been more active, even becoming cornerstone investors, with a total of about 12 billion US dollars in cornerstone investments this year. In terms of regional breakdown, foreign investments accounted for as high as 42%. She gave an example that in the international allocation of Contemporary Amperex Technology (03750), foreign funds accounted for over 60%. Shi Qi believes that the theme of "A+H" has been prominent in the Hong Kong IPO market this year. Among the current 85 IPO projects, even though A+H accounts for 17 projects, it only represents 20% in terms of quantity. However, the fundraising scale has exceeded 18 billion US dollars, accounting for 60% of the total fundraising amount in Hong Kong IPOs this year. Regarding the sustainability of the popularity of A+H listings, Shi Qi stated that many top A-share companies are preparing for Hong Kong IPOs, as the pace of A-share IPOs is gradually increasing. She believes that the trend of A+H listings will continue, with more A-share companies coming to Hong Kong for H-share listings next year, including high-tech companies like semiconductor and Siasun Robot&Automation. Furthermore, the trend of Chinese concept stocks returning to Hong Kong will continue to provide additional support to the Hong Kong IPO market. Many Chinese concept stocks listed in the US are dual-listing in Hong Kong, which not only boosts the companies themselves but also helps alleviate the risk of delisting. However, there have also been recent cases of new listings breaking below the IPO price. Shi Qi believes this may be due to the lack of uniqueness in the industry in the Hong Kong stock market, but ultimately, the stock price performance will reflect the company's performance. Regarding the hot demand for biotech IPOs this year, which often resulted in oversubscription of "thousands of times," Shi Qi stated that while the international competitiveness of this sector has increased, leading to a revaluation of related stocks' valuations, there might also be instances of mixed quality because many companies are still in their early stages. Therefore, she reminded that companies will be very strict in their internal evaluations of such new stocks, and this subscription sentiment may not necessarily be sustainable, and may return to rationality in the future. The new IPO mechanism introduced in August injected vitality into the market. Addressing concerns from retail investors about the non-mandatory clawback under the new "Mechanism B," Shi Qi explained that by fixed public subscription ratios of 10%-60%, allocating more shares to institutional investors effectively relieved future selling pressure, contributing to better pricing and performance in the aftermarket, while stimulating retail investors' enthusiasm due to the scarcity factor. This viewpoint has been supported by market data. Since the implementation of the new rules, 22 out of 25 IPOs chose Mechanism B, with 21 of them closing higher on the first day, with DEEPEXI TECH (01384) and BAMA TEA (06980) having price increases of 150.56% and 86.7%, respectively. According to previous statistics by CICC, as of October 2025, out of a total of 173 newly listed projects in the past 24 months, CICC has sponsored 50, with a participation rate of 29.1%; out of 98 in the past 12 months, CICC has sponsored 31, with a participation rate of 32.0%; in the 81 projects so far this year, CICC has sponsored 27, with a participation rate of 33.8%.