Morgan Stanley sees another record year for Hong Kong IPOs as pipeline hits 450

Cathy Zhang, head of Asia-Pacific equity capital markets at Morgan Stanley, sounded hoarse after a day of back-to-back meetings with companies keen to go public in Hong Kong. “It’s very possible that the value and number may exceed last year’s IPO figures, given the momentum we have seen in January,” Zhang said in an interview on January 30. Nearly 100 companies filed for stock offerings in the city last month, more than triple the same period in 2025, a year which saw Hong Kong crowned as the world’s top IPO venue. While that title was earned with 114 listings that raised US$37.2 billion over the whole year, more than 450 companies are already in the pipeline for 2026. “This year definitely has a stronger start. … [It] is the busiest ever when I compare it to the last 20 years in Hong Kong,” Zhang said. “The pipeline will be more diversified across different sectors compared with last year. Tech, healthcare and industrials are expected to be the three most active sectors.” Many artificial intelligence and robotics companies were also coming to the market, including humanoid and traditional industrial robot makers, alongside firms in industrial automation and players in clean and new energy, according to Zhang. “At the same time, healthcare issuance is broadening beyond traditional biotech to include more next-generation innovation – siRNA [small interfering RNA] therapies, bispecific antibiotics, AI-driven drug discovery and a new wave of innovative medical device players,” she said. More than 10 companies listed on the Hong Kong stock exchange in January, including Chinese AI start-up MiniMax’s HK$4.8 billion (US$614 million) offering, and graphics processing unit designer Biren Technology, which raised HK$5.58 billion. Morgan Stanley was a joint sponsor for advanced surgical robot maker Shenzhen Edge Medical, which listed under Chapter 18A – a special track for pre‑revenue biotech firms with strong growth prospects – after raising about HK$1.12 billion on January 8. Last year, Chinese companies that trade both as A shares on onshore exchanges and as H shares in Hong Kong accounted for almost half of total IPO volume. However, “in 2026 they will probably be less in terms of that percentage”, Zhang said. Issuers from mainland China would still dominate the city’s IPO market, she added, but companies from the US and Southeast Asia were also joining the pipeline. Driven by strong business performance in IPOs and follow-on offerings, Morgan Stanley last year topped the equity capital markets underwriting league table, with 8.5 per cent market share and US$22 billion in related proceeds in Asia-Pacific, excluding Japan. “Global investors are increasingly willing to invest in China. They want to place long-term bets on category leaders – not only because these companies represent the best of China, but because they have the potential to become global leaders in their fields,” Zhang said. “European investors have been pretty active recently. They are looking for growth. … another big trend is the Middle East. We are seeing more Middle Eastern money coming in. US investors remain highly selective on China, but engagement is rising for large-scale, innovation-led companies with clear leadership and proven execution.” Abu Dhabi Investment Authority took cornerstone stakes in MiniMax and Edge Medical, while Singapore sovereign wealth fund Temasek acted as a cornerstone investor in snack firm Busy Ming Group. Morgan Stanley is betting on healthcare and innovation sectors to fuel earnings growth. Zhang said last year’s record number of out-licensing deals – where firms grant the rights to develop their drugs to others – and a growing number of clinical data readouts in 2026 would underpin fundraising activities in China’s healthcare sector. “This year, many Chinese companies will continue to advance their clinical programmes, so there will be more data readouts, which I think will further validate the story,” she said. Chinese biotech and pharmaceutical companies would be “active” in follow-on offerings, according to Zhang. “We will see more convertible bonds issuance from bio firms, as it’s a less dilutive way to raise capital.” On January 27, Chinese drug maker Hansoh Pharmaceutical agreed to issue HK$4.68 billion of zero-coupon convertible bonds due 2033 to professional investors, with the notes convertible at an initial price of HK$57.39 per share, a roughly 43 per cent premium to the latest closing price. The supportive regulatory environment and “reasonable valuations” compared to many US‑listed companies meant that global investors “right now think China is definitely investible”, Zhang said.