Equity Financing Surged 251% In 2025; Hong Kong IPO Momentum Extends Into 2026

Following a dramatic 251% expansion in equity financing during 2025, the Hong Kong market remains highly active, with more than 300 companies currently in the IPO queue. Goldman Sachs Asia’s Head of Equity Capital Markets (Excluding Japan), Wang Yajun, described 2025 as a year of vigorous market activity and characterized the outlook for 2026 as one of continued strength; speaking on January 15, he noted an exceptionally busy start to the year and reported that participation by major international long‑term funds from the United States, Europe and Asia in Hong Kong IPOs has risen to roughly 85%–90%.

Market participants broadly expect elevated equity financing to persist. Observers emphasize the need to distinguish structural effects from short‑term pressures when assessing IPOs’ impact on secondary‑market liquidity, arguing that high‑quality listings are more likely to attract international capital than to drain market liquidity.

Data for 2025 illustrate the scale of the rebound. Wind figures show total equity fundraising reached HKD 612.2 billion, a year‑on‑year increase of 250.91%. The IPO market reclaimed the global lead, with 117 companies raising a combined HKD 285.8 billion, up 224.24% year‑on‑year. While 2026 may not match 2025’s extraordinary growth rate, industry leaders expect both IPO and refinancing volumes to remain at elevated levels, and several market watchers project 2026 IPO proceeds could exceed HKD 300 billion, supported by favorable listing rules, renewed interest from China‑listed companies, dual‑listing activity and growing demand for overseas expansion.

Although A‑share issuers accounted for a substantial portion of 2025’s Hong Kong IPO volume, Wang Yajun anticipates the 2026 mix may shift toward a larger share of first‑time listings, a development that will test market depth and valuation consensus because pricing differentials between buyers and sellers tend to be wider for newly listed companies. He also expects an increasing number of AI‑related and adjacent industry‑chain companies, including firms in communications, data centers and semiconductors, to pursue Hong Kong listings in 2026.

As of January 15, 327 companies were awaiting listing, nearly half of which are A‑share issuers and several of which are very large enterprises. Liu Guohua, Partner and Head of Financial Accounting Advisory Services at EY Greater China, observed that this pipeline provides a solid foundation for near‑term and future market activity.

Concerns that heavy IPO issuance could exert sustained downward pressure on the secondary market have been raised, particularly after a number of new issues traded below their offer prices late in 2025. GF Securities’ Chief Strategy Analyst Liu Chenming argued that IPO activity is unlikely to trigger a market downturn; he suggested that increased demand for Hong Kong dollars could prompt the Hong Kong Monetary Authority to inject liquidity, lower HIBOR and thereby support equity markets. Wang Yajun described post‑listing price weakness as a normal market adjustment rather than a structural reversal, noting Hong Kong’s deep capital pool and the capacity of strong IPOs to attract further international investment.

Liu Guohua emphasized the importance of separating short‑term issuance concentration from longer‑term structural benefits. While clustered offerings can temporarily strain liquidity, the medium‑ to long‑term effect of high‑quality A‑share listings is to enhance market depth and help international investors better understand the growth prospects of China’s leading companies. He added that post‑listing price trajectories reflect the interaction of IPO pricing, investor composition and sector cycles. Liu Chenming highlighted the role of cornerstone investor lock‑up expirations roughly six months after listing, noting that some stocks experience pre‑expiry pullbacks followed by rebounds, and that strong corporate performance can attract new index funds, southbound flows and foreign buyers to offset selling pressure. Wang Yajun concurred, observing that favorable market conditions and ample liquidity enable companies to navigate lock‑up periods smoothly and allow long‑term secondary‑market investors to replace early cornerstone holders.

International capital has returned in force. Public information indicates that several high‑profile Hong Kong IPOs, including those of major technology and healthcare names, attracted substantial allocations from global long‑term funds. Wang Yajun recalled that participation by top international long‑term investors rose markedly from roughly 10%–15% in early 2024 to about 85%–90% by early 2026, with further inflows expected.

Supported by the Hong Kong Exchange’s Chapter 18A and 18C listing regimes, the more than 300 companies in the queue are concentrated in technology sectors—software services, hardware, semiconductors—and healthcare, including biopharma and medical devices and services. Wang Yajun said international long‑term investors focus primarily on two criteria: whether a company has durable long‑term growth potential and whether current valuations can deliver sustainable returns. He identified consumer companies with clear business models and predictable profitability, as well as technology firms centered on AI and large‑model capabilities, as likely to remain attractive to global long‑term capital.

On biotechnology, Wang Yajun noted that the sector has undergone cycles since the introduction of Chapter 18A in 2018 and experienced a revival in 2025; the biotech segment in Hong Kong has now taken shape and will evolve according to its own dynamics, with some assets accessible only via the Hong Kong market and thus likely to retain the interest of specialized international biotech investors. Liu Guohua concluded that IPO momentum in 2026 will be driven by four principal categories: biotech companies sustaining 2025’s high activity; specialized technology leaders in AI, new energy and semiconductors; traditional industry leaders pursuing technology‑enabled upgrades; and mainland consumer brands using Hong Kong as a platform to expand their international presence.